Democratic talks with Manchin show signs of melting down

Democratic negotiations with centrist Sen. Joe Manchin (D-W.Va.) over President Biden’s sweeping climate and social spending bill are close to melting down as Manchin appears to be backing out of an earlier deal with the White House to extend the child tax credit for one year.

Manchin is now floating the idea of extending the child tax credit for multiple years so that the cost of a proposal that is likely to be extended by Congress in the future is fully reflected in the Build Back Better bill, which is now officially projected to cost roughly $2 trillion over 10 years.

“Manchin is trying to back out of a deal with the White House,” said one Democratic source familiar with the negotiations between Manchin and Biden. “Manchin earlier agreed to a one-year extension of the child tax credit. They shook on it.”

The source said Manchin’s attempt to revise what Biden’s senior advisers thought was an agreement about the child tax credit “is causing consternation at the White House.”

A second Democratic source familiar with Manchin’s interactions with the White House said “Manchin’s moving around” on the tax credit.

The source said the White House had agreed to limit the expanded child tax credit earlier this year because Manchin had demanded the limitation. 

Manchin is pulling the rug out from under the talks by now insisting that the tax credit be extended multiple years so that the likely true 10-year cost of Build Back Better isn’t misrepresented, the source said. 

“The White House agreed to a one-year child tax credit because that’s what Manchin wanted. We would have been happy to do a permanent expansion of the child tax credit and find offsets by raising taxes on the rich,” the source said.

Extending the expanded child tax credit a full ten years would cost $1.6 trillion over a 10-year budget window, according to the Tax Foundation, which would nearly equal the entire cost of Build Back Better as it was drafted by the House. Other estimates have pegged the cost of 10-year expansion of the child tax credit at $1.4 trillion.

The source added “there is no way” the legislation can pass before Christmas, as Democrats planned, because of the dispute with Manchin on the child tax credit as well as an intra-party fight over raising the cap on state and local tax (SALT) deductions.

That would force Democrats to either find new tax increases to offset the cost or jettison other popular proposals such as long-term home health care or expanded subsidies for child care to keep the total cost of the proposal close to the $1.5 trillion top line set out by Manchin in September.

Manchin has signaled in private negotiations that he would be willing to spend as much as $1.75 trillion.

Manchin on Wednesday angrily denied that he is opposed to extending the child tax credit. But he appeared to nod his head affirmatively when asked whether its projected cost over ten years, assuming that it’s likely to be renewed by Congress, should be reflected in the official Congressional Budget Office score for Build Back Better.

“I’m not opposed to child tax credit, I’ve never been opposed to child tax credit,” he insisted.

He also dismissed reporting that he wants to remove the child tax credit from the bill if its projected cost doesn’t assume it will be renewed for more than one year, calling it “a lot of bad rumors.”

Manchin lost his temper when Arthur Delaney, a reporter for HuffPost Politics, asked Manchin if he opposed providing the expanded child tax credit in monthly installments of $300 to families with young kids.

“Guys, I’m not negotiating with any of you all. You can ask all the questions you want. Guys, let me go. This is bullshit. You’re bullshit,” he fumed, grumbling “God almighty” as he walked back to his office.

One senator who requested anonymity to discuss Manchin’s position said the West Virginia senator in the past has raised concerns about providing an enhanced child tax credit in monthly payments because it could then be viewed as a type of supplemental monthly income.

Democratic senators say that pulling the child tax credit from the bill would be a major problem.

“There are issues to be resolved,” acknowledged Senate Budget Committee Chairman Bernie Sanders (I-Vt.).

He called the expanded child tax credit “a very, very important part of it, no question about it.”

Sen. Michael Bennet (D-Colo.), an outspoken proponent of the expanded child tax credit, which Congress enacted as part of the $1.9 trillion American Rescue Plan, said Wednesday it would be “devastating” if it lapses at the end of this month.

“Having this gap will be devastating. We have cut childhood poverty in the country almost in half. The Treasury Secretary said last week that we’ve reduced childhood hunger in America by 23 percent,” he said.

Bennet said he thought there was already an agreement between Manchin and the White House to extend the expanded child tax credit for another year.

“I believe that there was an agreement to extend child tax credit for a year and to make its full refundability permanent between people who were negotiating this with the White House,” he told reporters.

Democratic senators say it now looks highly unlikely that Biden’s climate and social spending package will get a vote before Christmas, though Senate Majority Leader Charles Schumer (D-N.Y.) hasn’t yet announced a decision on pushing the massive bill into 2022.

Sen. Mark Warner (D-Va.) said there’s still a lot of work to be done with the Senate parliamentarian to vet a bill spanning more than 2,000 pages to make sure it doesn’t run afoul of the Senate’s budget reconciliation rules — a time-consuming review known as the Byrd bath.

“We all know that parts of the bill haven’t been — I’m not sure — either scrubbed or bathed,” he said.

A Democratic senator who requested anonymity to comment on discussions within the Senate Democratic caucus said a sense of gloom and frustration is setting in.

The lawmaker said it appears certain the bill won’t come to the floor before January and maybe not until February or March because of Manchin’s many concerns with the legislation.

“I can’t keep track of all of Manchin’s conditions,” the senator complained. “People are exasperated, worried, frustrated and have crossed over to humor.”

The senator said Schumer hasn’t yet offered any insight to colleagues on what the schedule is for Biden’s climate and social spending bill.

“We have no clarity,” the lawmaker said.

Senators were expecting to receive guidance from Schumer about the next steps for the Build Back Better Act at a scheduled lunch meeting for Democratic committee chairmen.

That biweekly lunch meeting, however, was canceled at the last minute amid reports that Biden and Manchin are far apart from reaching a deal.

Members who were expecting to attend the lunch were surprised by the sudden cancellation, which is being seen as a troubling sign for the negotiations with Manchin, who was supposed to be there as the chairman of the Energy and Natural Resources Committee. 

Updated 7:50 p.m.