President Biden and White House officials reportedly spent part of the holidays talking to Senate Democrats, including Sen. Joe Manchin (D-WV), about how to get their stalled Build Back Better Act through the upper chamber.
You’ll recall that Manchin effectively scuttled the most recent version of the bill a couple of weeks ago when he declared in a Fox News interview that he was a “no” on the legislation. Manchin’s announcement drew an angry initial reaction from the White House, but it didn’t kill the bill.
Instead, Biden and Democrats have been scrambling to salvage what they can — and Axios’s Hans Nichols reports that Manchin himself is “open to reengaging on the climate and child care provisions … if the White House removes the enhanced child tax credit from the $1.75 trillion package — or dramatically lowers the income caps for eligible families.”
Manchin reportedly remains concerned about the overall size and substance of the legislation and its potential effects on inflation — a worry that many economists have said is misplaced. But the extension of the expanded Child Tax Credit included in the House version of the bill is apparently of particular concern to the senator, who has insisted that the credit should come with work requirements and be more narrowly targeted to low-income families. He has also reportedly raised concerns that the benefit as structured drives opioid use.
The cost of the credit was also a problem. Manchin has criticized the House bill’s use of budget gimmicks to lower the official cost of the package. The House bill would keep the expanded credit in place for one more year (and it would make the credit fully refundable on a permanent basis). But many Democrats want to make the expanded credit permanent, which would cost an estimated $1.6 trillion over 10 years. Manchin, who wants to cap the total costs in the package at $1.75 trillion, had reportedly offered the White House a plan last month that included universal preschool and some climate programs but left out the expanded child tax credit.
As Manchin and Democrats failed to come together on the Build Back Better plan, the expanded credit expired at the end of 2021.
“Economists warn that the one-two punch of expiring aid and rising [Covid] cases could put a chill on the once red-hot economic recovery and cause severe hardship for millions of families already living close to the poverty line,” Ben Casselman writes at The New York Times. “To supporters of the child benefit, the failure to extend it is especially frustrating because, according to most analyses, the program itself has been a remarkable success. Researchers at Columbia University estimate that the payments kept 3.8 million children out of poverty in November, a nearly 30 percent reduction in the child poverty rate. Other studies have found that the benefit reduced hunger, lowered financial stress among recipients and increased overall consumer spending, especially in rural states that received the most money per capita.”
What’s next: Axios’s Nichols reports that one possible solution to Democrats’ conundrum would be to remove the Child Tax Credit from their bill and then have a separate debate about making the credit permanent. Democrats have also talked about breaking the whole package into smaller pieces. “The biggest problem with such strategy,” The Washington Post’s Theodoric Meyer and Jacqueline Alemany note, “is that Senate rules limit the number of bills that can be passed via reconciliation, and there's little to no appetite among Republican senators to support any elements of BBB.”
The bottom line: Manchin isn’t the only hurdle Democrats face as they look to pass their social spending plan. Sen. Kyrsten Sinema (D-AZ) notably hasn’t yet said she’s a firm “yes” and there are other intraparty differences on the legislation that need to be resolved. But Manchin may drive the action as fellow Democrats try to figure out what he can support. “You should anticipate talks that could drag on for weeks,” Punchbowl News suggested Monday morning. “Remember what people say about Manchin – he can change his mind on how he’s voting between the elevator and the Senate floor. So this is someone who may be hard to pin down for some time.”
