Democrats mull how much to build back, and when, in budget bill

Democrats eager to enact some form of their climate and safety net package before the November midterm elections are floating disparate strategies for resurrecting negotiations West Virginia centrist Sen. Joe Manchin III squashed last month.

Manchin suggests “starting from scratch,” but his Democratic colleagues don’t want to throw the baby out with the bathwater. Democrats have different views on how much of the House-passed $2.2 trillion package is salvageable and how long they should negotiate with Manchin after protracted talks last year led nowhere.

President Joe Biden said in a press conference last week he’s “confident” some pieces of the existing package will become law before the midterms, citing more than $500 billion in clean energy spending and tax incentives and funding for universal pre-kindergarten as examples of provisions that have broad support, including from Manchin.

But Biden said he’s “not sure” a renewal of the expired child tax credit expansion providing monthly checks to families of up to $300 per child will remain in the next iteration given Manchin’s opposition to the current structure.

“I think we can break the package up, get as much as we can now, and come back and fight for the rest later,” he said.

Most Democrats agree with Biden’s general strategy, but there are different factions forming around what’s actually doable now when it comes to the sweeping budget bill they’ve dubbed “Build Back Better.”

Sen. Edward J. Markey, D-Mass., said in a statement last week that Democrats should start with the climate and clean energy provisions because those “have been largely worked through and financed” to win Manchin’s approval. Other Democrats agree the climate provisions should serve as the basis of the package and any others that can get 50 votes can be added in.

Since saying he wanted to start negotiations from scratch, the climate provisions are the only piece of the package Manchin has reiterated he could support. “I think that there’s a lot of areas in climate that we agree,” he said in an interview with Newsy on Wednesday.

Child credit coalition

Another group of senators still wants to build the package around the expanded child tax credit, despite Manchin’s argument that the benefit should be further restricted based on income and work requirements.

“West Virginians basically that make $75,000 or less should be the highest priority we have,” Manchin said Thursday on Talkline with Hoppy Kercheval, a local radio show.

The current maximum child credit extends to individuals earning up to $200,000 and households making up to $400,000, though the lapsed credit expansion phased out at $75,000 and $150,000, respectively.

Democratic Sens. Michael Bennet of Colorado, Sherrod Brown of Ohio, Cory Booker of New Jersey, Raphael Warnock of Georgia and Ron Wyden of Oregon sent a letter Wednesday to Biden and Vice President Kamala Harris requesting it be “a centerpiece of the legislation.”

“The expanded CTC is a signature domestic policy achievement of this administration, and has been an overwhelming success,” the senators wrote, warning of “dire” consequences for failing to extend it. “Without the expanded credit, nearly 10 million children will be thrown back into or deeper into poverty this winter.”

While many Democrats wax optimistic about striking a deal with Manchin on the child tax credit, others acknowledge it may not be feasible, especially with the party looking to pass something soon before election year politics further complicate negotiations.

“We think that the child tax credit is very, very important. It doesn’t have 51 votes though,” House Majority Leader Steny H. Hoyer said Tuesday in a Politico Playbook interview. “We have to look at what we can get, not what we’d like to get.”

Although there’s no deadline for advancing a revised package, Hoyer urged the Senate to move quickly. “The component parts that I think there is consensus on, let’s pass those, let’s get them done,” the Maryland Democrat said.

The economic package is far from the only thing on Congress’ short-term to-do list.

Lawmakers are trying to negotiate an omnibus appropriations deal before stopgap funding expires Feb. 18; reach agreement on legislation designed to resolve supply chain issues and boost U.S. competitiveness with China; pass sanctions to deter a Russian invasion of Ukraine; and advance a Supreme Court nomination through the Senate.

‘Act without dragging’

In a Monday Twitter thread, Sen. Tina Smith, D-Minn., acknowledged her colleagues’ frustration but urged them to listen to what Manchin has said and “act without dragging this out.”

“I’ve been in [sic] involved in complicated negotiations for a long time, and one thing I’ve learned is you have to know when to take no for an answer. And also when to hear yes and take it,” she said. “Time to focus on what’s possible and deliver.”

Congressional Progressive Caucus Chairwoman Pramila Jayapal acknowledged in a CNN interview last week that the House tried to push Manchin too far by adding things to the package he did not support, like paid leave. The Washington Democrat thinks it’s possible to get a deal “very close to” the $1.75 trillion framework the White House released last fall after extensive negotiations with Manchin and Sen. Kyrsten Sinema, D-Ariz.

“That was Sen. Manchin’s plan,” Jayapal said. “We gave him the pen. And we said, ‘OK, you write it.’”

Manchin never endorsed the framework, and he criticized parts of it, like the one-year extension of the child tax credit and funding for Medicare to cover hearing benefits. Several Democrats say Manchin needs to be more clear about what he supports, not just what he opposes, before negotiations can advance.

Senate Budget Chairman Bernie Sanders, I-Vt., has called on Democrats to end backroom negotiations and bring the debate to the Senate floor. He reasons that voting on the package and individual elements of it will show the American people Republicans are obstructing popular policy changes, as well as clarify which aspects Manchin will support.

Appeasing Manchin is the primary obstacle to a deal, but there are other intraparty disputes Democrats have to navigate to ensure a revised package can get to Biden’s desk.

Chief among them is whether to provide some relief from a Republican-enacted $10,000 cap on the state and local tax deduction. It’s a top priority for Democrats from high-tax states like New Jersey, New York and California, but progressives from lower tax states are reluctant to provide a tax break that disproportionately benefits the wealthy.

Sen. Bob Menendez, D-N.J., and Sanders sought to negotiate a compromise that could pass the Senate but those talks paused as the package stalled. Their cooperation appeared to end Wednesday after The Hill reported that no relief would make it into the squeezed bill.

Sanders hailed the report on Twitter. Menendez hit back in his own tweet, implying Sanders had reversed himself from comments he made in the fall calling the cap “a regressive and unfair proposal. And this Congress must rectify it.”

Menendez also said in a statement that “SALT remains high in my list of priorities.” While he didn’t say whether a final version must address the SALT cap to get his vote, a trio of House Democrats have.

“If there are any efforts that include a change in the tax code, then a SALT fix must be part of it,” New York Rep. Tom Suozzi and New Jersey Reps. Josh Gottheimer and Mikie Sherrill said in a joint statement last week. “No SALT, no deal.”

Threading that needle is difficult since Democrats have zero votes to spare in the Senate and only four in the House amid universal GOP opposition. Only one Democrat, Maine’s Jared Golden, voted against the House package, but his primary complaint was the SALT cap increase, so he could switch positions if it’s left untouched.

There are other pockets of lawmakers whose support for a slimmer package is not guaranteed. That includes a trio of House Democrats who said they would oppose any package that did not provide legal protections for millions of undocumented immigrations, three versions of which the Senate parliamentarian rejected as violating the budget reconciliation rules.

The six-member progressive “squad” that voted against the bipartisan infrastructure bill because they wanted to hold it as leverage for Manchin to support a bigger reconciliation package may be reluctant to accept further cuts.

Hoyer predicts enough of those members will ultimately support whatever can get through the Senate.