Manchin Dashes Democrats’ Plans … Again

Manchin Dashes Democrats’ Plans … Again

Sen. Joe Manchin
By Yuval Rosenberg and Michael Rainey
Friday, July 15, 2022

A dour day for Democrats as Sen. Joe Manchin has once again spoiled their plans to enact their economic agenda. Here’s what’s happening.

Manchin Dashes Democrats’ Plans … Again

Seven months ago, Sen. Joe Manchin (D-WV) dashed Democrats’ hopes of passing a sweeping package of climate change and economic programs, forcing them to dial back their ambitions and craft a narrower bill. Now he’s done it again.

Manchin told Democratic leaders late Thursday that, as of now, he isn’t willing to support the major climate provisions in their plan, or their proposed tax hikes on the wealthy and corporations. With that, Manchin — who holds a key vote in the evenly divided Senate — effectively derailed Democrats’ plan to advance their economic agenda via a party-line vote before lawmakers leave for their August recess.

Instead, Manchin said he is open to passing a bill lowering prescription drug prices and extending Affordable Care Act subsidies to prevent health insurance costs from surging for millions of Americans next year.

“Senator Manchin believes it’s time for leaders to put political agendas aside, reevaluate and adjust to the economic realities the country faces to avoid taking steps that add fuel to the inflation fire,” a Manchin spokeswoman told The Washington Post, which first reported Manchin’s latest position.

Manchin says he didn’t blow up negotiations: The senator on Friday pushed back strongly on the reports that he was torpedoing the climate and tax portions of the reconciliation package.

In an interview with a West Virginia radio station, Manchin said he told Senate Majority Leader Chuck Schumer (D-NY) that, in the wake of Wednesday’s report showing inflation rising to a 9.1% annual rate, he wanted to wait and see another month of inflation data and how the Federal Reserve adjusts its interest rates. “Let’s wait until that comes out so we know that we’re going down a path that won’t be inflammatory, to add more to inflation,” Manchin said he told Schumer, adding that he felt that passing the climate and tax provisions now would be “wrong” and “not prudent.”

“They all knew exactly where I stood when we saw 9.1%,” Manchin said.” That was an alarming figure to me, higher than anything in 40-plus years. I said, ‘Oh my goodness, let’s wait now. This is a whole new page.’”

In his radio interview, Manchin noted that the prescription drug reforms would raise $288 billion over 10 years and suggested that $40 billion of that could be used to extend the Affordable Care Act subsidies, with the remaining $248 billion used to reduce the deficit.

Manchin said Friday he still wants climate and energy legislation — though he said moving quickly away from fossil fuels would be “crazy” — and he still thinks corporations should have to “pay their fair share.” But, he said, he worried about the potential economic effects of raising taxes right now. “I’ve got to be careful that corporations aren’t basically stymied to where they won’t invest, they won’t hire, they start laying off,” he said.

Consistently inconsistent: This isn’t the first time Manchin has moved the goalposts on Democratic negotiators. He urged the party’s lawmakers to “pause” on their Build Back Better bill last year, and later reportedly backed away from an offer he had made to the White House. “To win over Manchin, Democrats already had agreed to surrender their most prized spending proposals, from offering paid family and medical leave to providing child care, free prekindergarten and tax benefits to low-income Americans,” the Post’s Tony Romm and Jeff Stein note. Now, after having won numerous additional concessions from Democrats on the climate and energy provisions under consideration, Manchin has again upended the party’s plans.

Manchin had also repeatedly called for tax reform and had reportedly agreed to a tax hike on some top earners to be used to extend the solvency of Medicare before saying he couldn’t back tax hikes right now. And while the senator last year had objected to Democrats’ use of artificial sunsets to keep down the nominal cost of the Build Back Better package, he is apparently now willing to support a two-year extension of increased Affordable Care Act subsidies, even though Democrats would surely look to keep those higher tax credits in place for longer.

Democrats and climate advocates are furious: Manchin’s position left Democrats and environmentalists seething.

* Sen. Martin Heinrich (D-NM), who sits on the Energy and Natural Resources Committee that Manchin chairs: “We have an opportunity to address the climate crisis right now. Senator Manchin’s refusal to act is infuriating. It makes me question why he’s chair of ENR.”

* Sen. Tina Smith (D-MN): “It’s infuriating, and nothing short of tragic, that he appears to be walking away again from taking action on climate and energy.”

* Rep. Pramila Jayapal (D-WA), the leader of the Congressional Progressive Caucus: “Senator Manchin has said a lot of things. Every time, what he makes clear over and over again, is he can’t close a deal and that you can’t trust what he says.”

* John Podesta, who served as chief of staff under President Bill Clinton and was a senior counselor to President Barack Obama: “It seems odd that Manchin would choose as his legacy to be the one man who single-handedly doomed humanity.”

What’s next: In theory, Manchin’s latest turn left Democrats with a choice. “The challenge is, do we take the short term and not get anything bigger?” asked House Ways and Means Committee Chairman Richard Neal (D-MA), according to The Washington Post. “Or do we hold out for the possibility of bringing Joe into the fold?”

In reality, Democrats have little choice if they want to ensure they can pass something — anything — before November’s midterm elections. The inflation numbers Manchin wants to see are due to be released August 10, after lawmakers have started their five-week summer recess. And Democrats can’t possibly trust that Manchin will back the climate and tax provisions once Congress returns in September. Any reconciliation bill would have to pass by September 30.

Coral Davenport and Lisa Friedman of The New York Times note that Manchin has taken more campaign money from the oil and gas industry than any other senator and became a millionaire from his family’s coal business. And David Dayen of liberal magazine The American Prospect snarked: “In the end, having to negotiate with a coal baron on transitioning away from fossil fuels was not the most reliable option.”

Biden calls on Congress to pass health care bill: In a statement Friday afternoon, President Joe Biden said he would press forward with executive actions on climate change and called on lawmakers to pass the health care legislation Manchin said he will support. “Families all over the nation will sleep easier if Congress takes this action. The Senate should move forward, pass it before the August recess, and get it to my desk so I can sign it,” Biden said. “This will not only lower the cost of prescription drugs and health care for families, it will reduce the deficit and help fight inflation.”

Biden thanked Schumer “for his dogged and determined effort” — and didn’t mention Manchin’s name.

The bottom line: Democrats can still secure some landmark health care reforms, including empowering Medicare to negotiate some drug prices for the first time, but it sure won’t feel like much of a victory after the tortuous 18-month path they’ve taken — and it won’t be anywhere close to the sweeping and transformative package they had originally envisioned.

House Passes $840 Billion Defense Bill

In a 329-101 vote, the House on Thursday evening approved the annual National Defense Authorization Act, which calls for $840 billion in defense spending for fiscal year 2023.

As we noted yesterday, the House bill adds $37 billion to the funding request for defense from the Biden administration, and the top defense appropriator in the House noted that fact after the vote.

“Some will say the bill authorizes too much money for the Department of Defense. They’re right,” House Armed Services Chairman Adam Smith (D-WA) said in a statement. “I supported President Biden’s original budget request and I staunchly opposed efforts to allow further increases in defense spending. But we don’t always win every vote, even in a functioning democracy. And we shouldn’t let the results of one vote outweigh all of the worthwhile things in this bill that we fought for.”

The bill would allocate $808.4 billion for the Pentagon, $30.5 billion for the Department of Energy, and $400 million for other agencies within the federal government. It includes:

* Support for President Joe Biden’s request to maintain a military with 2.1 million personnel;

* A 4.6% pay raise for service members and civilian personnel, with an additional 2.4% for those earning less than $45,000 per year;

* $1 billion in additional aid for Ukraine, with a requirement for an inspector general to oversee the distribution of weapons;

* Limitations on how many F-15 fighter gets the Air Force can retire;

* A requirement that the Air Force to upgrade older F-22 stealth jets rather than retire them as the service has proposed;

* A requirement that the Navy maintain five of its littoral combat ships rather than retiring all of them, as requested;

* A requirement for the military to keep working on a nuclear cruise missile that defense officials wanted to abandon;

* A prohibition on selling F-16 fighter jets to Turkey unless Congress determines that the country has not violated Greek sovereignty;

* An authorization for the mayor of Washington, D.C., to take control of the D.C. National Guard;

* A requirement for federal buildings to provide free menstrual products in all restrooms.

What’s next: The Senate needs to pass its own version of the NDAA, followed by reconciliation of the two bills, which likely won’t happen before autumn.

US Can’t Stop Russian Cruise Missiles: Report

The U.S. military is not currently capable of intercepting the kind of cruise missiles that Russia has been firing into Ukraine, according to a new report from the Center for Strategic and International Studies, a nonpartisan think tank in Washington that focuses on security issues. The U.S. military has focused on high-flying missiles that move along predictable trajectories, but Russia’s cruise missiles fly low and are highly maneuverable, creating a hole in America’s defense network. “The near-complete lack of homeland cruise missile defense and related forms of air defense more broadly has created a deterrence problem,” the report says.

The analysts recommend focusing on a multi-layer defense against cruise missiles, including “over-the-horizon radars, towered sensors, an aerostat, three types of interceptors, command and control operation centers, and a mobile airborne asset.” Building such a defense system could cost $32.7 billion over 20 years. 

Congress has approved $273 million to start building a cruise missile defense system on the island of Guam, which the analysts say could serve as a starting point for a larger system that covers the whole country. “While protection of the continental United States poses a different problem, the efforts for the defense of Guam will be especially instructive for element selection, system integration, and command and control development,” the report says. “In this sense, the road to homeland cruise missile defense for North America will go through Guam.” (h/t Marcus Weisgerber of DefenseOne)

Number of the Day: 1%

Nominal retail sales rose by 1% from May to June, the Commerce Department announced Friday. While the numbers are not adjusted for inflation, and therefore may simply reflect higher prices, they suggest that consumers aren’t pulling back on spending in the face of price hikes throughout the economy, reducing fears of a developing recession.

“People did not fold in the face of the Ukraine shock and the subsequent surge in food and energy prices,” economist Ian Shepherdson of Pantheon Macroeconomics said. “Instead, they ran down a small part of their pandemic savings in order to keep up their discretionary spending.”


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