Biden Aims to Win Pivotal Democrat’s Support for $2 Trillion Spending Plan

Source: By Natalie Andrews and Richard Rubin, Wall Street Journal • Posted: Monday, December 13, 2021

The backing of West Virginia Sen. Joe Manchin would be crucial for passage of the social-policy and climate bill called Build Back Better

Sen. Joe Manchin, in blue tie in Washington last week, hasn’t endorsed the bill. Photo: Michael Brochstein/Zuma Press

WASHINGTON—President Biden this week will lobby Sen. Joe Manchin, the centrist West Virginia Democrat, in an attempt to lock in a deal on a roughly $2 trillion social-policy and climate bill that Democrats hope to finish by Christmas.

Passage hinges largely on the support of Mr. Manchin, who hasn’t endorsed the legislation. He has repeatedly raised concerns about the cost of the bill and the potential effect of new government spending on inflation. Messrs. Biden and Manchin plan to talk early this week, a Senate aide said.

In recent weeks, lawmakers have hashed out deals to avoid a government shutdown and pass the annual defense-policy bill, which outlines military projects and authorizes pay raises. Lawmakers will vote this week on a measure to raise the debt limit, under a bipartisan deal that authorized a one-time suspension of Senate rules requiring 60 votes to pass such legislation and allowing a simple majority, instead. It has been a rare swirl of productivity for the chamber.

Passing the social-program and climate bill known as Build Back Better will be a different challenge, as no Republicans are expected to support it and all 50 senators in the Democratic caucus will have to agree to it. The bill passed the House last month. If senators change it too broadly, they could lose support from lawmakers when they send it back to the House—where they can’t lose more than three votes.

Last week, Mr. Manchin criticized Democrats’ plan to calculate revenue over 10 years but make programs in the bill last for a shorter time, which has the effect of making the bill’s cost appear smaller than the Democrats’ ultimate ambitions. Many lawmakers say they will try to extend the programs later. He hasn’t commented publicly since the Labor Department reported on Friday that the consumer-price index rose 6.8% in November from the same month a year ago, the highest reading in nearly 40 years.

“Sen. Manchin and I talk essentially every day,” said Senate Finance Committee Chairman Ron Wyden (D., Ore.), who said those conversations focus on energy and taxes.

 

With Democrats holding the narrowest congressional majority in decades, passing the sweeping bill is akin to threading yarn through a tiny needle. Democrats already navigated past opposition from Arizona Democratic Sen. Kyrsten Sinema on several of the tax increases they originally had proposed, making revenue-generation intended to pay for the legislation difficult.

Ms. Sinema hasn’t endorsed the House-passed bill. Democrats have also needed to write a bill that lawmakers from the party’s most progressive wing would support, along with centrists.

Democratic Sen. Ron Wyden of Oregon, who says his conversations with Mr. Manchin focus on energy and taxes. Photo: Stefani Reynolds/Bloomberg News

The Congressional Budget Office on Friday released an estimate of the bill requested by Republicans that analyzed the cost of its provisions if they were extended indefinitely, rather than on the temporary basis Democrats have proposed. Under that assumption, the CBO analysis found that the legislation’s provisions under that would add roughly $3 trillion to the deficit over a decade.

As written, and with provisions such as universal prekindergarten set to expire before 10 years, the bill would add about $231 billion to the deficit over a decade, the CBO analysis also found.

Sen. Lindsey Graham (R., S.C.) said he made the request to the budget office at Mr. Manchin’s request.

“Joe Manchin came to me and he said, ‘I think this bill is full of gimmicks, that these programs won’t go away, Lindsey, and if you score them for 10 years, I think the bill will double.’ Well, it didn’t double, it was almost 2.5 times,” he said Sunday on Fox.

Democrats have said they would find ways to pay for any extensions of programs when they expire. That will be a task as soon as next year, as an expanded child tax credit expires at the end of this year.

Lawmakers from both parties this week plan to meet with the Senate parliamentarian to determine whether any of the bill’s provisions run afoul of the chamber’s rules for passing a bill through reconciliation, a special legislative process that would allow them to pass the bill without GOP support.

Provisions on immigration and prescription drug-pricing might face problems with the parliamentarian, according to lawmakers and aides, which could make the bill trickier to pass in the House should the Senate send it back, because a handful of House Democrats demanded those provisions.

GOP Sen. Lindsey Graham says he asked the Congressional Budget Office to analyze the cost of the bill’s provisions if they were extended indefinitely. Photo: Stefani Reynolds/Bloomberg News

Democrats said the CBO didn’t reflect the legislation they are trying to pass. Republicans used that new estimate to attack proponents of Build Back Better for adding to the deficit.

The Senate Finance Committee on Saturday proposed changes to House-passed tax provisions, partly responding to corporate complaints and partly tightening proposed rules. The bulk remains the same, with taxes on corporations and high-income households paying for expansions in tax breaks for renewable energy and the child tax credit.

Under the Senate changes, companies facing a new 15% minimum tax on their financial-statement income wouldn’t be taxed on income coming from net increases in the value of defined-benefit pension plans.

Senators also proposed softening proposed limits on multinational companies’ interest deductions, and they would lighten the burden on companies with U.S. factories or research operations.

They removed a House provision imposing taxes on vaping products and a rule that would have limited privately owned prisons from being included in real-estate investment trusts, which ran afoul of Senate procedural constraints. They also proposed tighter rules on corporate inversions, deals in which U.S. companies take foreign addresses through mergers.

Senators still haven’t reached a deal on what to do about the state and local tax deduction. The House bill would expand the cap on the break to $80,000 from $10,000, but some senators argue that wealthy people would benefit too much from that. The current draft includes a “placeholder for compromise” on this provision.

Write to Natalie Andrews at Natalie.Andrews@wsj.com and Richard Rubin at richard.rubin@wsj.com

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