Manchin Rejects Scaled-Down BBB in Major Blow for Democrats’ Aspirations

Manchin Rejects Scaled-Down BBB in Major Blow for Democrats’ Aspirations
Sen. Joe Manchin (D-W. Va.) speaks in Washington on June 16, 2020. (Toni L. Sandys/Pool/AFP via Getty Images)
Joseph Lord

Late in the evening on July 14, Sen. Joe Manchin (D-W. Va.) reportedly killed any hope for a scaled down version of the Build Back Better (BBB) social spending package, which had picked up steam in closed-door inter-party negotiations among Democrats in the Senate.

According to reports, Manchin told party leadership that he would not accept any package that creates new climate spending or raises taxes from their post-2017 levels, the two main pillars of Democrats’ hopes for the renewed BBB.

Though the move is a major blow for Democrats, who were hoping to use the package as a campaign point during a season expected to go heavily in Republicans’ favor, it is not entirely surprising.

On July 11, Manchin spokesperson Sam Runyon rejected any reports that a deal on a scaled-down BBB was close, saying that many of Manchin’s concerns about the proposals remained “unresolved.”

“Suggestions that a reconciliation deal is close are false. Sen. Manchin still has serious unresolved concerns, and there is a lot of work to be done before it’s conceivable that a deal can be reached he can sign onto,” Runyon said.

Then, on July 14, the Department of Labor released (pdf) its latest Consumer Price Index (CPI), which showed that consumer prices had continued to rise, exceeding expectations and averaging an increase of 9.1 percent across the board over the past 12 months.

The CPI showed that energy has been the hardest hit, with costs rising by around 41.6 percent across the board for all types of energy. Gasoline prices have risen by a staggering 98.5 percent.

Other essentials have also been hard hit: in the past 12 months, the cost of food has gone up an average of 10.4 percent.

In a July 13 statement, Manchin, who has long been vociferous in calling for his party to do more to combat inflation, said, “Today’s inflation data illustrates the pain families across the country are feeling as costs continue to rise at a historic rate. 9.1% is cause for serious concern.

“Items like chicken, eggs, and lunchmeat have increased to all-time highs, while energy costs rose more than 40% in June with those that can least afford it suffering the most. It is past time we put our country first and end this inflation crisis.

“For more than a year, leaders in Washington have ignored the serious concerns raised by myself and others about the rising cost of inflation,” Manchin continued. “While Washington seems to now understand this reality, it is time for us to work together to get unnecessary spending under control, produce more energy at home, and take more active and serious steps to address this record inflation that now poses a clear and present danger to our economy.

“No matter what spending aspirations some in Congress may have, it is clear to anyone who visits a grocery store or a gas station that we cannot add any more fuel to this inflation fire,” he concluded.

Manchin’s reported refusal to support the package came less than 24 hours after the CPI was released.

In December, Manchin refused to support the $1.75 trillion iteration of the bill over similar concerns about rising inflation.

Prior to the inflation report, Democrats—led by Senate Majority Leader Chuck Schumer (D-N.Y.), who threw his support behind the renewed push—were hopeful that the three main climate policies in the proposed BBB revision would have Manchin’s support.

Many Democrats have pushed for tax credits for clean energy manufacturing, taxing methane emissions, and a new tax on carbon-intensive imports such as steel.

The first of the three climate policies indeed appeared to have Manchin’s support.

In one piece of legislation he sponsored with Sen. Debbie Stabenow (D-Mich.), the duo called for providing incentives to manufacture clean energy, with a focus on rural communities.

Senate Environment and Public Works Committee Chairman Tom Carper (D-Del.) has also worked with Manchin on a proposal to tax methane emissions, another good sign for Democrats rallying behind the policy.

Finally, the proposal to tax carbon-intensive imports, led by Sen. Sheldon Whitehouse (D-R.I.) has garnered some praise from Manchin, who, in a recent appropriations committee hearing, praised the proposal as a way to increase U.S. manufacturers’ competitiveness with China.

To pay for these policies, Democrats have pushed for a repeal of several provisions of the 2017 Tax Cuts and Jobs Act—a proposal that moderate Sen. Kyrsten Sinema (D-Ariz.) isn’t enthusiastic about.

During the last round of BBB negotiations, several sources reported that Sinema—who generally declines to comment on her policy positions during negotiations—was opposed to re-hiking the corporate and income tax rates from their post-2017 levels.

It isn’t clear if Sinema maintains her opposition on this front, but if she does, it could further put a kink in Democrats’ aspirations to fund the measure.

The legislation also faces potential challenges from Republicans.

On July 7, Senate Minority Leader Mitch McConnell (R-Ky.) renewed an earlier threat to tank the bipartisan United States Innovation and Competition Act (USICA), a measure designed to increase U.S. competitiveness with China.

The House and Senate have each passed their own versions of the legislation, and bicameral committees are currently working to hammer out the differences between the versions passed by each chamber.

The White House and Senate alike are anxious to see the competitiveness legislation passed, further heightening the challenges that Democrats could face in moving ahead with a scaled-back BBB.

Regardless of challenges from Sinema or Republicans, the measure now seems condemned to failure in the evenly-divided Senate, where it would have required Manchin’s support to pass. It remains unclear whether Democrats will push to further scale down the BBB or let the effort die.

Related Topics