All Manchin has to do is run out the reconciliation clock and avoid making inflation worse.
All Manchin has to do is run out the reconciliation clock and avoid making inflation worse.
S enator Joe Manchin is feeling emphatic. “I’ve told you all I don’t know how many times,” he exclaimed on Tuesday: “Inflation, inflation, inflation. Gas prices, gas prices, gas prices. Food prices, food prices, food prices, and energy.”
Good. Good. Good.
The next day, Manchin struck a similarly intense tone. Responding to the news that inflation had hit 9.1 percent year over year, he insisted in a statement that “it is past time we put our country first and end this inflation crisis,” before flirting with a well-deserved I-told-you-so and noting that, “for more than a year, leaders in Washington have ignored the serious concerns raised by myself and others about the rising cost of inflation.”
And? Therein lies the rub. “It is time for us to work together to get unnecessary spending under control,” Manchin proposed. Okay: Which spending? We must “take more active and serious steps to address this record inflation that now poses a clear and present danger to our economy,” Manchin insisted. Okay: Which active and serious steps? “No matter what spending aspirations some in Congress may have,” Manchin submitted, “it is clear to anyone who visits a grocery store or a gas station that we cannot add any more fuel to this inflation fire.” Okay: Therefore . . . ?
With Chuck Schumer hoping to revive a slimmed-down — but still entirely unnecessary and actively harmful — “budget reconciliation” bill, Manchin must complete the thought. He’s almost there, it seems. The Washington Post reported overnight that Manchin has informed Democratic leaders he won’t support new climate-change spending or tax increases, but could be open to extending health-insurance subsidies and other measures. And asked on Monday whether he needed to finalize a deal before September 30, Manchin was indeed blunt: “I don’t.” This is true. Senator Manchin does not “need” a deal. Nobody does. In theory, there is a role for Congress to play in reducing inflation; a combination of instant tax increases on the middle class and some cuts to discretionary spending, for example, might well have a salutary effect at the margins. But there is no political appetite for either of these ideas, and, as a result, there is no need for a bill.
Does Senator Manchin understand this? His focus on “inflation, inflation, inflation” would suggest he does. And yet, inexplicably, he has worked on a package that would make that inflation worse. By most reports, the “deal” that Senators Manchin and Schumer were negotiating consisted of a large tax increase on corporations — which, because it will lead to increased prices, is inflationary — and a series of tax credits (read: subsidies) for energy companies, child-care providers, and Obamacare recipients — which, because they will leave their recipients with more disposable income and thereby increase demand, are inflationary. If Manchin is balking now on tax increases, that sense of hesitation should extend to the rest.
Speaking from the White House on Wednesday, Joe Biden’s press secretary, Karine Jean-Pierre, described the Schumer–Manchin framework as “the anti-inflation reconciliation bill.” This is preposterous spin — and in exactly the flavor to which Senator Manchin has been so habitually allergic. For more than a year, Manchin has complained bitterly that, in their attempt to get some form of “Build Back Better” across the finish line, the Democratic Party has been engaged in “shell games,” in “budget gimmicks,” and in outright lies. Evidently, it still is. The “savings” part of the Senate’s proposed prescription-drug “reform” is an accounting fraud. The so-called Net Investment Income Tax is not a “loophole” fix, it’s a tax hike. And, as Tobin Marcus has observed, to extend the enhanced Obamacare subsidies that the Democrats created last year would not fight inflation but send hundreds of billions of dollars “straight into consumer income.”
It is remarkable that, even at this late stage, the Democratic Party has yet to grasp that its agenda has been overtaken by events. A sensible president would have recognized from Day One that, with inflation on the horizon, the supply chains broken, the Treasury drained, and Covid still raging, his ambitions had to be curtailed. Instead, Joe Biden bought into the idea that he was the second coming of Franklin Roosevelt, attempted to spend six or seven trillion dollars we don’t have, and ran headfirst into a wall. At first, Senator Manchin was happy to join Biden in this endeavor — notably, Manchin was one of the 50 Senate Democrats who, in March 2021, voted for the spending extravaganza that, per Morgan Stanley, “turbocharged” American inflation in the first place — but, as conditions have worsened, he slowly came to his senses. To complete the job, he has just to wait the two and a half months until the reconciliation measure expires and the window for meddling has closed.
Don’t go wobbly, Joe.