As Democrats look to pass their roughly $2 trillion plan for social spending and environmental programs, discussions between President Joe Biden and Sen. Joe Manchin (D-WV) are foundering.
The talks “have been going very poorly,” one unnamed source briefed on the conversations told Politico. “They are far apart.” And The Washington Post reports that the talks have “soured” over the size and scope of the legislation, as Manchin continues to press for cuts to the proposed spending. “The gaps between the two sides remain immense,” the Post’s Tony Romm and Seung Min Kim write.
The continuing impasse with Manchin likely means that Democrats will have to delay any Senate vote on the package until next year.
Expanded child tax credit on Manchin’s chopping block? Democrats expanded the child tax credit as part of the American Rescue Plan Act passed in March, boosting the benefit and allowing monthly payments of up to $300 per child under age 6 and $250 per child ages 6 to 17. Those payments, which studies have found help reduce child poverty and hunger, are set to expire at the end of the year but would be extended through 2022 under the Build Back Better Act.
Manchin reportedly has some issues with the tax credit — the Post notes he “has expressed general skepticism about approving aid that sends more checks directly to Americans.” At the very least, he has issues with the way the credit is structured and financed in the Build Back Better Act. “One person familiar with the matter said Wednesday that Manchin essentially seeks to zero-out the program in the bill,” Romm and Kim report. “A second person familiar with his thinking — also speaking on the condition of anonymity — said the senator is not opposed to the child tax credit specifically but rather the fuller measure’s construction and price tag.”
Democrats had scaled back their initial plans to extend the credit through 2025, instead opting to keep it going for one year, at a cost of about $130 billion over 10 years. The House version of the Build Back Better Act would also make the tax credit fully refundable on a permanent basis, at a cost of $55 billion over 10 years.
Manchin has criticized Democrats’ use of temporary programs and artificial sunsets to lower the official cost of their plan, reportedly arguing that any program in the package should extend for the full 10 years. But extending the expanded credit for 10 years would cost about $1.4 trillion more — which wouldn’t leave much room for anything else in the bill given that Manchin has insisted on a $1.75 trillion ceiling for the spending in the bill.
Manchin told reporters Wednesday that he is “not opposed” to the child tax credit, and he angrily brushed off one reporter’s questions about whether he wanted the credit out of the bill.
The IRS has told lawmakers that they would need to extend the tax credit by December 28 to ensure that the monthly payments don’t lapse, and some Democrats are pressing to ensure the payments aren’t interrupted. “We would not tolerate an interruption of a Social Security payment for vulnerable elderly people,” said Sen. Ron Wyden (D-OR).
Manchin reportedly suggested extending the credit outside the Build Back Better bill, but any such plan would be unlikely to pass the Senate, where it would need at least 10 Republican votes. House Speaker Nancy Pelosi (D-CA) shot down the idea of extending the credit separately, telling reporters that it provides “really important leverage” for passing the full Build Back Better bill.
The bottom line: Manchin has long called for a “pause” on Democrats’ tax-and-spending plan. Now it appears he’s forcing that pause — though he is not the only holdup, as Democrats still need to resolve some other differences on the legislation, finalize the legislative text and have the Senate parliamentarian complete a review of the bill.
Frustrations with Manchin are reportedly running high, but his continued objections don’t mean that the bill is dead. Politico reports that Manchin’s friends in the Senate say he’s not looking to derail Biden’s agenda. And, according to Politico, Rep. James Clyburn (D-SC) insisted that the Build Back Better bill will still pass, eventually: “We’re just not gonna pass it on the time frame that some people would like to see.”