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Manchin Open To Just $1.5 Trillion Of Democrats' $3.5 Trillion Plan

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by Tyler Durden
Wednesday, Sep 08, 2021 - 10:18 AM

Moderate Democrat Sen. Joe Manchin (WV) has privately said he won't support more than $1.5 trillion of the Democrats' $3.5 trillion economic blueprint, and he'll support as little as $1 trillion of it, according to Axios.

Given Democrats' razor-thin 50-50 Senate (with VP Kamala Harris being the tie-breaker), Manchin has the power to effectively block the legislation if no Republicans cross the aisle - and his line in the sand would mean a hard ceiling for Biden's "Build Back Better" agenda which includes a laundry list of progressive priorities, including universal preschool and free community college.

More via Axios:

  • Manchin also has committed to paying for any new spending with new revenue, which will limit the ultimate size of any final package.
  • This amount would be on top of a $1.2 trillion bipartisan infrastructure deal passed by the Senate and awaiting House action.

Between the lines: Underlying Manchin’s concerns with Democrats' $3.5 trillion budget proposal, which originated in Sen. Bernie Sanders' budget committee, are deep and substantive differences over the size and scope of specific programs.

  • Manchin has voiced concerns about Biden’s plan to spend $400 billion for home caregivers.
  • He's also talking about means testing on other key proposals, including extending the enhanced Child Tax Credit, which provides up to an additional $300 per child per month, free community college, universal preschool and child care tax credits.
  • And he’s skeptical that so-called dynamic scoring — which Democrats embraced as a way to offset some costs of hard infrastructure spending — can be applied to “human” or “soft” infrastructure proposals.
  • For years, Republicans have relied on dynamic scoring to argue that tax cuts can pay for themselves in the long run, by growing the economy and therefore increasing revenues.

Committees in the House and Senate have until September 15, next Wednesday, to finalize specific legislation outlining how to spend the $3.5 trillion, while raising $1.5 trillion in new revenue from higher taxes on wealthy Americans and corporations, as well as tax enforcement activities.

Last week, however, Manchin threw the process into disarray after arguing for a "strategic pause" in a WSJ Op-Ed, citing inflation and the need to leave a buffer to respond to future Covid-19 pandemic needs if the virus ramps up again.

House Speaker Nancy Pelosi (D-CA), meanwhile, has promised centrist Democrats a vote on a separate $1.2 trillion ($550 billion in new spending) bill, which progressive Democrats say they'll vote down unless the $3.5 trillion budget blueprint.

President Biden doesn't seem to think Joe Manchin will be a problem, saying at the White House Tuesday evening that "Joe at the end has always been there," adding "He's always been with me. I think we can work something out. I look forward to speaking with him."

The White House is reportedly still optimistic that a deal can be reached.

"Sanders wanted a large number and Manchin wants a smaller number and we’re going to work this process to try to reach common ground," once source told Axios. "There is a wide spectrum of opinions in the Democratic caucuses, and plenty of negotiation will take place. But we will continue to get this done, finding common ground."

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