A couple weeks after announcing that he couldn’t support a narrow resurrection of a Build Back Better bill that raised taxes and addressed climate change, Sen. Joe Manchin declared to the world on Wednesday afternoon: Eh, what the hell. He and Senate Majority Leader Chuck Schumer had reached a deal on it after all.
The announcement was a true shock, as these last-last-last minute negotiations had been successfully kept secret from people as high ranking as Schumer’s deputy.
Now we’ll see if it can navigate the thorny path it faces to President Joe Biden’s desk.
In addition to the policies Manchin had already agreed to—allowing Medicare to negotiate prescription drug prices and an extension of enhanced Affordable Care Act subsidies—the deal would institute a 15 percent minimum tax on large corporations, beef up IRS tax enforcement, and close the carried interest loophole beloved by hedge fund managers. On the spending side, a $369 billion pot will be devoted to “energy security and climate change.” Per Democrats’ estimates, the bill would raise $300 billion more than it would spend for deficit reduction.
In exchange, Manchin appears to get two substantial victories.
First, he gets to continue claiming that he killed “Build Back Better,” because this sucker is called the Inflation Reduction Act of 2022. You can hear the kids chanting it in the streets!
Second, as Manchin and Schumer announced in a joint statement, “we have reached agreement with President Biden and Speaker Pelosi to pass comprehensive permitting reform legislation before the end of this fiscal year.” (Manchin wants a shale gas pipeline.)
Unlike the Inflation Reduction Act of 2022, this sort of legislation can’t be done under reconciliation rules, so Manchin’s beautiful fossil fuel bill will have to wait until the fall. (Longer refresher here, but: Bills passed under reconciliation, which allows Democrats to bypass the 60-vote filibuster, must consist only of tax and spending fixes.)
The timing of the announcement, and the secrecy with which the talks were being kept, is raising some eyebrows about whether Senate Minority Leader Mitch McConnell, well, got played.
McConnell had tried to take a hostage earlier in the summer by saying that a long-simmering bipartisan industrial policy bill wouldn’t pass if Democrats went ahead with a sweeping, partisan reconciliation bill. This was not, in our minds, McConnell’s deftest threat; much of corporate America wanted the “CHIPS” bill, as it’s informally known, to go through regardless of whether Democrats were also able to pass a bill making prescription drugs cheaper. But with a broad reconciliation bill seemingly off the table after Manchin nixed it a couple of weeks ago, the Senate passed a version of CHIPS earlier Wednesday afternoon. A few hours later, Manchin and Schumer announced they had a reconciliation deal after all.
If Manchin and Schumer played an elaborate, multiweek joke on McConnell by pretending climate and taxes were off the table until CHIPS went through: truly, hats off. But maybe Manchin just changed his minds a couple of days ago for his usual mysterious reasons no one understands.
Now, you might be thinking this is just Manchin doing his same back-and-forth that never goes anywhere. The bill text hasn’t even been released. What is different, though, is that this is the first time Manchin has committed in writing, released to the public, that he will vote for this reconciliation bill. That’s not nothing.
What other problems could arise? Oh, buddy …
• The parliamentarian is putting on her rubber gloves, preparing to “scrub” the text to ensure it complies with budget reconciliation rules. We’ll see if Republicans can successfully challenge anything and disrupt the whole deal.
• A proper scoring of the bill’s revenues and outlays will need to be done.
• Centrist Arizona Sen. Kyrsten Sinema must be contended with. While never as big an obstacle to Build Back Better as Manchin was, she had characteristically kooky objections to certain provisions, like eliminating the carried interest loophole. Sinema, like everyone, was caught off-guard by the deal. Her office said Sinema “will need to review the text.” Spooky!
• If 50 Democratic senators are onboard, they’ll have to survive a lengthy open-amendment process on the floor during which Republicans will be working diligently to break them apart.
• Manchin could change his mind tonight after an annoying protester in a kayak yells at his houseboat.
Then there are House concerns. A group of mostly Northeastern Democrats, led by New Jersey Rep. Josh Gottheimer, have repeatedly insisted they won’t vote for a reconciliation bill unless it raises or eliminates the cap on state-and-local tax, or SALT, deductions. Manchin, in his own statement Wednesday, was pointed that the deal does not include such accommodations to the Gott Gang (forgive us).
But no other Democrat in Congress is as immune to pressure from party leadership as Joe Manchin. He’s an anomaly, representing one of the most conservative states in the country. This has always been the logic: If Manchin is onboard, everyone else, whether it’s Gottheimer or Sinema, cannot withstand the pressure from Schumer, Pelosi, Biden, and Democratic voters.
Senate Democrats plan to vote next week.