The Fallout From Manchin’s Big Balk

The Fallout From Manchin’s Big Balk

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President Joe Biden and Senate Democratic leaders are prepared to take whatever win they can get and move on.

When Sen. Joe Manchin (D-WV) pulled the plug on Democrat’s Build Back Better package late last year, the White House responded with fury. The tone this time has been much different — in fact, the statement released by Biden last week after talks between Manchin and Senate Majority Leader Chuck Schumer fell apart did not mention the West Virginia senator at all. Instead, the White House and Senate Democrats are looking to press ahead with a budget reconciliation package that aims to lower prescription drug prices and extend increased Affordable Care Act subsidies for two years. And for all their fury, Democrats recognize that they still need Manchin’s vote on this and other legislation.

“While a slimmed-down version of a slimmed-down version of a slimmed-down version of the original vast reconciliation proposal isn’t what Democrats wanted, prescription drug reform is something the party has been promising for years and is, crucially, popular with just about everyone in the party,” Politico’s Eugene Daniels and Ryan Lizza note.

The Senate parliamentarian is expected to hear so-called Byrd bath arguments on Thursday to determine whether Democrats’ plan to allow Medicare to negotiate some drug prices complies with the special rules for the budget reconciliation process.

Democrats are still fuming at Manchin: Of course, Democrats’ willingness to move on — and set aside a long list of progressive climate and social priorities — doesn’t mean the frustrations with Manchin will be forgotten, or forgiven. Appearing on ABC’s "This Week" on Sunday, Sen. Bernie Sanders (I-VT) blasted the senator from West Virginia and accused him of “intentionally sabotaging the president’s agenda, what the American people want, what a majority of us in the Democratic caucus want.”

Sanders went on to say there was nothing new in Manchin’s latest actions. “And the problem was that we continue to talk to Manchin like he was serious,” Sanders added. “He was not. This is a guy who is a major recipient of fossil fuel money, a guy who has received campaign contributions from 25 Republican billionaires."

Moving forward with CHIPs bill, too: Manchin’s torpedoing of a broader reconciliation bill may have opened the door to faster action — and Republican support for — a bill to provide $52 billion in aid for the U.S. semiconductor industry. “This will green light proceeding this week to shore up the dangerous vulnerability of US supply chain for advanced semiconductors,” Sen. John Cornyn (R-TX) tweeted Sunday about Manchin’s move.

Schumer is reportedly hoping to launch the floor process on the bill as soon as Tuesday, potentially setting up final passage next week. “In addition to the $52 billion in chipmaker subsidies, the bill is also expected to include an investment tax credit that was initially part of the bipartisan FABS (Facilitating American Built Semiconductors) Act,” Punchbowl News reported Monday morning. “This provides a tax credit for building or modernizing semiconductor fabrication facilities, the real cornerstones of the industry.”

Democrats have failed to reverse the Trump tax cuts: “Despite a full Democratic-controlled Washington, the Trump tax code architecture from 2017 will hold in place,” notes analyst Chris Krueger of the Cowen Washington Research Group.

David Dayen of liberal magazine The American Prospect notes that Democrats in recent years had put forth a slew of grand policy proposals that they promised would be fiscally responsible because they would be paid for by rolling back or repealing the 2017 Republican tax cuts. Only the party couldn’t hold together and follow through on those tax hikes, with Manchin’s rejection of tax hikes last week

“There are many implications to the failure of talks on what was once the Build Back Better Act and what is now the Negotiate Prices on Ten Drugs Starting in 2026 Act of 2022 (working title),” Dayen writes. “But one of the biggest is that the Trump tax cuts will make it through the first two years of the Biden administration unscathed—and could very well become permanent, a symbol of the one-way ratchet in favor of the top 1 percent that characterizes U.S. policymaking.”

Dayen suggests that failure points to a larger problem with the Democratic Party: “If you have unanimous opposition to a bad policy with no real political proponents and then can’t get a single thing done about it in the space of five years, it speaks to an essential malfunctioning at every level of the party and the process. Nobody should get a pass for it. It's nothing short of an embarrassment.”

The bottom line: Despite their numerous failures, Democrats still appear poised to pass the most significant healthcare legislation in years before lawmakers leave for their August recess. That would be a big win for Biden and his party — even if it doesn’t exactly feel like it given the other big agenda items that have been dropped from Democrat’s legislation.

“Drug pricing has been the Democratic policy Moby Dick for generations,” writes Krueger. “Layer in preventing health insurance premium shocks… and make the GOP vote against both. Then add a likely Trump 2024 Presidential announcement in October, Roe v Wade, poor GOP Senate candidates & you (Democrats) have a decent little midterm message to run on.”

At the same time, Krueger notes that “execution risk remains quite high” given the “general disorder/malpractice” among Democrats and the narrow margins they have in Congress. So stay tuned.