Democrats Try to Get Manchin to Yes

Democrats Try to Get Manchin to Yes

By Yuval Rosenberg and Michael Rainey
Monday, January 3, 2022
Happy New Year! As we try to ease into 2022, snow is blanketing Washington, D.C., and Omicron is engulfing the capital, New York and much of the rest of the country, with the 7-day average of daily Covid cases surging more than 200% over the past two weeks to top 400,000. Hospitalizations are growing, too, but at a much slower rate of 35%.

The House is still out this week, but the storm in D.C. gave the federal government a snow day and forced the Senate to postpone its first scheduled vote of the year until Tuesday.

Don’t expect Capitol Hill to stay quiet for long, though. Senate Democrats are still planning votes on voting rights legislation and working toward a new version of their Build Back Better Act. As the negotiations play out behind the scenes, we’re likely facing weeks of rumors and speculation about just what that bill might look like — with all eyes once again on Sen. Joe Manchin (D-WV).

Here’s the latest.

Democrats Scramble to Salvage Build Back Better Plan

President Biden and White House officials reportedly spent part of the holidays talking to Senate Democrats, including Manchin, 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.”

Number of the Day: 12.5%

Sometimes described as “the world's greatest deliberative body,” the U.S. Senate has been spending a lot less time debating the finer points of legislation recently. According to C-SPAN data analyzed by The Washington Post, the upper chamber spent just 12.5% of its time in debate while in session in 2021, a big decline from the better than 50% it recorded from 2013 to 2019. The same trend holds in the House, where debate time has fallen from a peak of 40% to just 8.6%.

The “decline of legislating in Congress” may be one reason so many senior lawmakers are either retiring or thinking about it, says the Post’s Aaron Blake.

To Fight Inflation, the White House Offers $1 Billion to Independent Meatpackers

As part of an effort to combat inflation by fostering increased marketplace competition, the federal government will spend $1 billion to support independent producers of meat and poultry, the Biden administration said Monday.

In a statement announcing the move, the White House said the meatpacking industry is a “textbook example” of the market concentration that has contributed to the sharp increase in prices throughout the U.S. economy in recent months, with middlemen jacking up prices at the expense of both producers and consumers. According to data provided by the administration, four large meatpackers control 85% of the beef market, while the top four pork processors control about 70%.

“Capitalism without competition isn’t capitalism, it’s exploitation,” President Joe Biden said at a virtual meeting with farmers Monday. “That’s what we’re seeing in poultry and those industries now. Small independent farmers and ranchers are being driven out of business.”

Where the money will go: Under the terms of the plan, the U.S. Department of Agriculture will provide grants totaling $375 million to help diversify the meatpacking sector, and the agency will work with lenders to provide an additional $275 million in loans to finance expansion. About $100 million will go toward workforce development, $50 million will be spent on technical assistance, and $100 million will target reduced inspection costs for small producers. The funding will come from the $1.9 trillion American Rescue Plan signed into law last March.

Yes, but: With food prices rising more than 6% on annual basis – and beef prices up a remarkable 21% – the White House is anxious to get inflation under control. But experts are divided on whether market concentration and price gouging are really to blame for the recent burst of inflation.

Former Obama administration economist Larry Summers, who has been critical of the Biden administration’s spending plans, says that focusing on market concentration will have little effect on prices. “There is no basis whatsoever thinking that monopoly power has increased during the past year in which inflation has greatly accelerated,” he told The Washington Post.

Others are more optimistic about the plan. Scott Blubaugh, president of the Oklahoma Farmers Union, told Bloomberg News that he was happy to see the government taking on growing monopoly power. “Not since Teddy Roosevelt have we had a president that’s willing to take on this big issue,” he said.

Still, whatever role market concentration may play in the current jump in inflation, few experts think the Biden administration’s move will push prices much one way or another, especially in the short run. Don Close, an analyst at Rabobank, told the Post that the meatpacking industry is like much of the rest of the economy, with a reduced labor pool playing a big role in price increases. According to Close, entry-level wages in the industry have increased by about 50% since the beginning of the pandemic.

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