Manchin Drops a Bomb on Dem Spending Plans

U.S. Senator Joe Manchin faces reporters at the U.S. Capitol in Washington
LEAH MILLIS
By Yuval Rosenberg

Will they or won’t they? It’s still not clear
whether Democrats will vote tonight on a $1 trillion bipartisan
infrastructure bill. Progressives are still threatening to block
the legislation as they look for assurances that centrists will
support a larger package focused on liberal priorities. House
Speaker Nancy Pelosi has reportedly been
working furiously to secure votes for the
infrastructure bill and she
insisted Thursday that her plan was still to hold
a vote on the legislation as promised. But when House Majority
Leader Steny Hoyer (D-MD) was asked if he's confident the bill
would be able to pass later on, he told reporters, "Nope."

If a vote does happen, it will likely come
late. But the chances of getting enough progressives on
board may have been complicated by comments earlier in the day from
Sen. Joe Manchin, a key centrist. Here’s what you need to know.

Manchin Drops a Bomb on Dem Spending
Plans

Democratic Sens. Joe Manchin and Kyrsten Sinema dug in Thursday
in opposing their party’s proposed $3.5 trillion budget
reconciliation bill focused on expanding the social safety net and
combating climate change. They also pushed back strongly against
progressives who have accused the pair of being cagey about
detailing what they would accept in the legislation.

Democrats need all 50 of their members in the evenly divided
Senate to support the legislation as they look to pass it via the
budget reconciliation process they want to use to avoid a
Republican filibuster.

Manchin told reporters that he wants to limit the topline
spending in the package to $1.5 trillion, some $2 trillion less
than President Joe Biden and congressional Democratic leaders are
seeking. In a scrum outside the Capitol —
check out this picture! — Manchin provided reporters
with an outline of what he would be willing to vote for, but made
clear that it falls far short of what his party has proposed.

“My topline has been $1.5” trillion, Manchin said, adding that
he doesn’t want “to change our whole society to an entitlement
mentality.” Manchin also noted that he’s never been a liberal and
suggested that if those further to the left want to enact their
agenda, they should win more elections. “I guess for them to get
theirs, elect more liberals,” he said. “I'm not asking them to
change. I'm willing to come from zero to $1.5.”

Sinema followed Manchin by releasing a
statement saying that she had “shared detailed concerns
and priorities, including dollar figures, directly with Senate
Majority Leader Schumer and the White House” in August.

What Manchin wants: Manchin’s comments Thursday were his
most expansive public explanation of his position — but Democratic
leaders have apparently been aware of the senator’s thinking for
quite some time.


Politico reported Thursday morning that Manchin
suggested a deal to Senate Majority Leader Chuck Schumer this
summer limiting the total spending in the budget bill to $1.5
trillion. The
agreement, dated July 28 and signed by both
Manchin and Schumer, reportedly was reached in return for Manchin’s
supporting the budget resolution passed in early August. Besides
the topline figure, it also lays out a host of specifics Manchin
wanted in the budget bill, including:

* A top individual tax rate of 39.6%;

* An “all-in” capital gains tax rate of 28%;

* A corporate tax rate of 25% and a domestic corporate minimum
tax of 15%;

* Means testing to limit new family and health spending programs
to lower-income people;

* “Targeted spending caps on existing programs” and “No
additional handouts or transfer programs”;

* A requirement that any revenue from the bill exceeding $1.5
trillion should go to deficit reduction.

Manchin also proposed that debate on the package start no
earlier than October 1 and that funds from the bill not be
disbursed until all funding from Covid rescue packages have been
spent. “This is a very difficult condition to meet, as the CBO
scoring of that legislation suggests spending in FY2022 of more
than $600bn, and smaller amounts for several years after that,”
analyst Alec Phillips of Goldman Sachs said in a note to
clients.

As chair of the Senate Energy Committee and a representative of
coal-producing West Virginia, Manchin also sought jurisdiction over
clean energy standards in the legislation and protection of tax
credits for fossil fuel producers if credits for wind and solar
energy are enacted. And he proposed that the Federal Reserve end
its quantitative easing program, which lawmakers don’t control.

The agreement also warns that "Senator Manchin does not
guarantee that he will vote for the final reconciliation package if
it exceeds the conditions outlined in this agreement." And Schumer
added a note below his signature: “I will try to dissuade Joe on
many of these.” A spokesman for Schumer reportedly explained that
the majority leader’s signature was merely an acknowledgment of
Manchin’s positions, not a binding agreement on them.

The bottom line: Manchin’s $1.5 trillion figure shows
just how wide a gap Democrats will have to try to bridge if they
want to enact their plans for health care, child care, paid leave,
education and climate change.

“I could see myself coming below $3.5 trillion but we shall see
how far $1.5 trillion goes,” Sen. Mazie Hirono (D-HI) said,
according to
Politico. “He’s confirmed that’s as far as he’ll
go, which is pretty sad if you ask me.”

Congress Avoids Shutdown With Hours to Spare

You can’t accuse lawmakers in Washington of being boring.

Facing a midnight deadline to avoid a partial shutdown of the
federal government, Congress on Thursday passed a short-term
measure that will fund the government through December 3. President
Joe Biden is expected to sign the bill before the end of the
day.

The legislation, known as a continuing resolution, also provides
$28.6 billion in relief funds for communities experiencing natural
disasters, and $6.3 billion to help cover the cost of resettling
refugees from Afghanistan in the U.S.

The bill passed the Senate in a 65-35 vote, with 50 Democrats
and 15 Republicans voting yes; the 35 no votes all came from
Republicans. The House vote was 254-175, with 220 Democrats and 34
Republicans voting in favor and 175 Republicans voting against.

“This is a good outcome, one I’m happy we are getting done,”
Senate Majority Leader Chuck Schumer (D-NY) said. “With so many
things to take care of in Washington, the last thing the American
people need is for the government to grind to a halt.”

House Appropriations Committee Chairwoman Rosa DeLauro (D-CT)
reminded lawmakers that the funding bill is short-term and that
there’s more work to be done. “This bill is not a permanent
solution,” she said. “I look forward to soon beginning negotiations
with my counterparts across the aisle and across the Capitol to
complete full-year government funding bills that reverse decades of
disinvestment,” she added.

Debt Limit Still Looms

Responding to Republicans’ refusal to vote to raise or suspend
the federal debt ceiling, Schumer cleared the way for Thursday’s
successful vote on the continuing resolution by eliminating a
provision from an earlier version of the bill that would have
suspended the debt limit, leaving open the possibility that the
U.S. could default on its debt payments in mid-October if Congress
fails to act before then.

Calling the passage of the continuing resolution a “glimmer of
hope” for the country, Schumer chided Republicans for refusing to
support efforts to address the debt limit. “I wish my colleagues on
the other side of the aisle saw the debt ceiling as equally
important and equally requiring bipartisan cooperation,” he said on
the floor of the Senate. “They don't, and we are willing to move
forward on the debt ceiling ourselves.”

Details on how Democrats plan to move forward on the debt
ceiling remain unclear. Schumer plans to hold a vote in the Senate
next week on a bill passed by the House that would suspend the debt
ceiling until December 16, 2022, but it is expected to fail due to
Republican opposition.

Another option for raising the debt limit, and the one that
Republicans are loudly calling for, is for Democrats to use the
budget reconciliation process to get it done. But Schumer has
called that a “non-starter,” though his comment about Democrats
doing the job themselves suggests that he may have changed his
mind.

Quote of the Day

“It would be catastrophic for the economy and for individual
families. Nearly 50 million seniors could stop receiving Social
Security payments or receive them delayed. Our troops would not
know when they would get their next paycheck. We have 30 million
families who rely on the monthly child tax credits and they would
not receive that relief, at least not on time.”

—Treasury Secretary Janet Yellen, speaking at a House Financial
Services Committee
hearing Thursday about the potential effects of a
debt default if Congress fails to raise or suspend the federal
borrowing limit.

Asked if she would support eliminating the debt ceiling, Yellen
said yes. “I believe when Congress legislates expenditures and puts
in place tax policy that determines taxes, those are the crucial
decisions Congress is making,” she said. “And if to finance those
spending and tax decisions, it’s necessary to issue additional
debt, I believe it’s very destructive to put the president and
myself, the treasury secretary, in a situation where we might not
be able to pay the bills that result from those past
decisions.”

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