President Biden on Tuesday tried to put on a brave face in the face of Sen. Joe Manchin slamming the brakes on his massive social and environmental spending bill — telling reporters in Scotland that Manchin “will vote for this.”
Manchin (D-WVa.) upended Biden’s legislative agenda Monday by saying he was concerned about “budget gimmicks” in the Democratic proposal and the possible effects on “exploding inflation” and the national debt.
Biden downplayed Manchin’s comments at a press conference in Glasgow before boarding Air Force One for a return flight to Washington.
“He will vote for this if we have in this proposal what he has anticipated. And that is looking at the fine print of the details of what comes out of the House in terms of the actual legislative initiatives,” Biden said.
“I believe that Joe will be there. With regard to the issue of whether or not he thinks that he’s worried about this being inflationary or going to be a negative impact in the economy, I think that I’ve made it clear to Joe and will continue to…. that 17 Nobel laureates in economics say it is going to lower inflation, raise wages, increase competition, create 2 million jobs a year, etc.”
Biden added: “I understand Joe is looking for the precise detail to make sure nothing got slipped in in terms of the way in which the legislation got written that is different than he acknowledged he would agree to. But I think we’ll get this done.”
Biden departed DC for Europe on Thursday shortly after he announced a new $1.75 trillion “framework” and Manchin initially signaled he was supportive, saying “we negotiated a good number.”
But the Congressional Budget Office hasn’t yet vetted White House claims about the cost of programs and the likely new revenue, and Manchin on Monday clarified that he wasn’t on board — sparking a new round of Democratic infighting, with Rep. Cori Bush (D-Mo.) accusing Manchin of racism for opposing the bill.
“How can I in good conscience vote for a bill that proposes massive expansion to social programs, when vital programs like Social Security and Medicare face insolvency and benefits could start to be reduced as soon as 2026 for Medicare and 2033 for Social Security?” Manchin said Monday.
“Elected leaders continue to ignore exploding inflation, that our national debt continues to grow, and interest payments on the debt will start to rapidly increase when the Fed has to start raising interest rates to try to slow down runaway inflation.”
But Bush, an ally of the “Squad” of House leftists, fired back at Manchin, saying, “Joe Manchin’s opposition to the Build Back Better Act is anti-black, anti-child, anti-woman, and anti-immigrant.”
Left-wing House members are threatening to sink Biden’s $1.2 trillion Senate-passed bipartisan infrastructure bill if the larger social spending and environmental bill doesn’t also pass.
Manchin can kill the larger package because Democrats hold a bare 50-50 majority in the Senate with Vice President Kamala Harris breaking ties in their favor.
Special budget reconciliation rules allow Democrats to avoid the usual 60-vote threshold for bills such as the pending package, but Manchin and fellow moderate Sen. Kyrsten Sinema (D-Ariz.) forced major rewrites. Sinema nixed most proposed tax hikes on businesses and higher incomes.
At least publicly, the White House said it’s unconcerned with Manchin’s latest comments, but the uncertainty comes as competitive elections Tuesday in New Jersey and Virginia threaten to sap Biden’s political momentum.
White House press secretary Jen Psaki said Monday, “Senator Manchin says he is prepared to support a Build Back Better plan that combats inflation, is fiscally responsible, and will create jobs. The plan the House is finalizing meets those tests.”
But projected costs and revenue streams rely on delicate assumptions and it’s possible the CBO will give a different assessment than White House projections.
The CBO said the bipartisan infrastructure bill, for example, would add $256 billion to the federal deficit over 10 years, though the White House insisted that was untrue.
The $1.75 trillion social spending framework includes $555 billion for environmental programs, $400 billion to fund universal preschool for 3- and 4-year-olds and to cap child care costs at 7 percent of income for families that earn up to 250 percent of their state’s median income and $200 billion to extend the enhanced child tax credit for families that earn up to $150,000 — from $2,000 to $3,000 per child, or $3,600 for those under 6.
The current edition of the plan also includes $150 billion for home health care for the elderly and people with disabilities through Medicaid, $150 billion for housing including 1 million new “affordable” rental units, $130 billion in new ObamaCare subsidies, $90 billion in racial and gender “equity” initiatives, $40 billion for higher education grants and $35 billion to expand Medicare to include the cost of hearing aids.
But the projections of new revenue are raising doubts, especially because much of the funds would come from very wealthy people who are able to afford top-notch lawyers and financial planners to avoid or contest taxes.
The White House projects $400 billion in new revenue through an IRS crackdown on people with income over $400,000, $350 billion through a new 15 percent global minimum tax on large multinational businesses, $325 billion through a new 15 percent minimum tax on corporations that report more than $1 billion in annual profits and $250 billion by closing a loophole used by the wealthy — including Biden — to avoid paying Medicare taxes.
Another $230 billion would come through a new supplemental income tax of 5 percent on income above $10 million and an extra 3 percent on income above $25 million, $170 billion by extending a 2017 Trump tax law provision that prohibits people from claiming on their taxes business losses greater than $250,000, $145 billion by eliminating a pending Trump rule that sought to cut out pharmacy middlemen by ending their receipt of rebates under Medicare Part D and $125 billion through a new 1 percent tax on stock buybacks that are intended to boost executive pay and share prices.