White House: By golly, this Manchin fellow may not want to spend trillions after all; Update: Tells Schumer to focus on inflation

Screenshot via C-SPAN

Ya think? The White House has spent months trying to find a formula to get Joe Manchin to agree to spending some money on any salvageable part of of Joe Biden’s Build Back Better proposal. With inflation escalating every month, however, the West Virginia Democrat insists that Biden’s time would be better spent on fiscal discipline and implementing the already-passed bipartisan infrastructure bill.

Are they listening? In a Lloyd Christmas fashion, perhaps:

Biden’s shrinking ambitions are largely the result of failed negotiations with Sen. Joe Manchin III (D-W.Va.), the ever-elusive 50th vote for the president’s agenda in an evenly divided chamber. White House officials are confronting the “real fear” that they will fail to reach any deal with Manchin — even one that leaves out most of what Biden had initially hoped to accomplish, according to three senior administration officials and three outside advisers in communication with the White House, who all spoke on the condition of anonymity to comment on internal talks. A year after Biden introduced his climate and social spending plans, the White House is running out of time to get Manchin onboard, with many lawmakers in Congress viewing July 4 as a crucial deadline for action.

I’m old enough to remember when the “crucial deadline” was Thanksgiving, Christmas, April Fool’s Day, Memorial Day … What’s next, Arbor Day? The real deadline here is November 8, the date of the midterm elections, or perhaps more like mid-September when early voting starts.

The problem isn’t deadlines. It’s the fact that the White House keeps believing that Manchin isn’t serious about fiscal discipline and is somehow malleable enough to endorse a progressive spend-o-rama. They apparently haven’t spent much time in West Virginia recently:

In recent weeks, White House officials have quietly tried gauging Manchin’s interest in a package that would consist primarily of clean-energy initiatives, prescription drug reform and higher taxes on the rich and corporations, the people said. The ideas discussed internally include more than $500 billion of deficit reduction, the people said. On Monday, a Manchin spokeswoman reiterated that he supports measures to boost U.S. energy production, lower prescription drug costs and raise tax revenue from corporations and the rich.

But despite his support for these provisions generally, Manchin has not yet made clear to the White House precisely what he would support in a final agreement, the people familiar with the administration’s discussions said. Manchin privately told lawmakers in recent days that he wants Congress to approve a bipartisan energy deal in response to Russia’s invasion of Ukraine, which would complicate an already difficult timeline for a broader spending proposal, according to two other people familiar with the matter, who also spoke on the condition of anonymity to reflect private talks. A bipartisan group, including Manchin, met on Monday night to discuss energy legislation.

“The White House is throwing every iteration at him,” one senior administration official said about the talks with Manchin. “But the relationship got to a bad place, in part because of tactics used on both sides.”

Both sides? Gee, I don’t recall Manchin calling Biden or BBB sponsors racists and white supremacists, but I do recall Biden suggesting that about Manchin. (And about Kyrsten Sinema too, for that matter.) If the relationship is in a bad place, the White House can blame itself for not doing the math and engaging Manchin and Sinema up front on what proposals they could support.

Now that inflation is real, spectacular, and still increasing, that window has long since closed. And Manchin’s not the only one recognizing that massive spending has contributed vastly to inflation, especially given the monetary expansions created to accommodate it over the last few years. Matthew Yglesias has become a convert to austerity in the same manner as Joe Manchin has, and he wonders why others on the Left can’t do the math (via Josh Barro):

By the time Joe Biden won in 2020, Democrats were tired of being the green eyeshades party; they wanted to tax the rich and then spend all of the revenue on new programs. That’s where I was in November 2020 as well. But since that time:

  • Congress passed a lame-duck stimulus bill.
  • Jon Ossoff and Raphael Warnock were elected to the Senate, and Congress passed another stimulus bill: the American Rescue Plan.
  • On a bipartisan basis, Congress passed the Infrastructure Investment and Jobs Act that is largely “paid for” with smoke and mirrors.
  • Inflation became a huge national problem.

When the facts changed, I changed my mind. That’s what Democrats did when they largely stopped caring about deficit reduction during the 2012-2020 period (read Jason Furman, the then-top economic advisor to the Obama administration, explaining in 2016 how their thinking on fiscal policy had evolved). But the facts have changed again, so Democrats’ position ought to change, too.

Yglesias is equally scornful that the relationship issues here are bidirectional:

Rather than try to edit the spending proposals down to the $1.7 trillion she had revenue for or the $1.5 trillion that Schumer had (secretly!) agreed with Manchin on, Nancy Pelosi moved a bill that used phase-out gimmicks to try to generate a $1.7 trillion score for what was really intended to be $3.5 trillion worth of new programs.

Manchin called foul on this, which seemed to set the stage for detailed negotiations to craft a proposal that would actually fit the criteria Manchin outlined to Schumer back in June.

Instead, Democratic leaders pressed pause on the process and pivoted to an unrelated effort to pressure Manchin and Sinema to eliminate the filibuster in order to pass a political reform bill that left most of the threats to American democracy unaddressed. This never had any chance of succeeding, but it did lead to lots of liberals who didn’t understand the details of the issue yelling at Manchin on Twitter and calling him racist.

All this time, Manchin had been mumbling about inflation and how he thought it was likely to be worse than Biden or the Fed was saying — and then inflation did turn out to be worse than Biden or the Fed was saying.

Manchin’s a reasonable person, and so he might still be amenable to a deal — but not without sharp cuts in other spending, a significant increase in American fossil-fuel production, and tax restructuring that increases revenue without damaging economic investment. Maybe the White House should stop talking and start listening if they really want to get a deal.

Update: Is Chuck Schumer listening?

CNN’s Manu Raju says that Democrats will find themselves once again in a box canyon:

Then maybe they should put the reconciliation vehicle aside for good, eh?