Less than two weeks ago, Joe Biden’s domestic agenda appeared to be completely dead when Joe Manchin backed away from the domestic policy bill he had been negotiating. But now, in a shocking turnabout, Manchin has made a deal with the Biden administration on a major bill.
The deal between Manchin and Biden would include the main features they had been working on before it fell apart: a tax increase on the wealthy, more money for IRS enforcement, letting the federal government bargain down the cost of prescription drugs, and splitting the proceeds between deficit reduction and energy reform and improvements for Obamacare. The energy measures have changed over time. Manchin described the policy as an “all of the above” package that combines green-energy-transition subsidies with the promotion of immediate fossil-fuel extraction to bring down prices in the short term.
The bill would spend $370 billion on energy investments, extend Obamacare subsidies for three years, and reduce the deficit by $300 billion.
Manchin’s statement notably says he “will vote for” the bill, which he is calling the “Inflation Reduction Act of 2022.”
If the bill does pass, the Biden administration will have snatched victory from the jaws of defeat and registered an important package of social-policy reforms.
Passage, however, is not assured. Kyrsten Sinema, who has objected to proposals to tax the wealthy, did not sign on to Manchin’s statement, and her support is not yet certain. When reached by a reporter after Manchin’s announcement, she had no comment. A cabal of House Democrats has also publicly opposed taxing the rich. Some of them, representing affluent blue-state districts that were hit by the elimination of the state and local tax (SALT) deduction imposed by Republicans in 2018, have vowed to vote against any bill that fails to include relief. Manchin’s statement seems to rule out any such relief, saying “our tax code should not favor red or blue state elites with loopholes like SALT.” Manchin appears to be daring them to kill Biden’s signature domestic proposal.
Josh Gottheimer, the leader of the faction of House Democrats who have given Biden the most trouble, sounded noncommittal:
One amusing side note is that Senate Minority Leader Mitch McConnell had attempted to derail this bill by taking another bill hostage. That bill, a business-supported measure to promote the domestic semiconductor industry, passed the Senate this week after McConnell assumed Biden’s budget plan was dead and over. The fact McConnell was willing to kill a bill he and his business constituents favored in order to block taxes on the rich shows how desperately he opposes this measure and how meaningful its passage would be.
Now Democrats in Congress have to close the deal. If they do, the once-moribund Biden presidency will suddenly be very alive.
