Manchin’s comments about considering the full cost of permanently extended programs could doom the Biden agenda.
Senator Joe Manchin just effectively blew up any hopes Democrats had of passing President Biden’s domestic agenda before a potential Glenn Younkgin victory on Tuesday. But it was a point Manchin made about the use of “budget gimmicks” by fellow Democrats that could doom the Biden agenda.
Manchin reiterated his concerns about “exploding inflation,” the debt, the potential for rising interest rates, and the creation of new social spending programs. “How can I in good conscience vote for a bill that proposes massive expansions of social programs when vital programs like Social Security and Medicare face insolvency and benefits could start being reduced as soon as 2026 in Medicare and 2033 in Social Security?” he asked rhetorically. “How does that make sense? I don’t think it does.”
Initially it seemed as though he was just demanding the need for a CBO score when he talked about the need for more transparency about the bill’s fiscal impact. That alone would be consistent with a strategy of wanting delay legislation that he would ultimately vote for. And there are a myriad of ways for Democrats to game the intricacies of the CBO process to get an acceptable enough score for Manchin to vote for.
But then Manchin took things a step further.
He said, “As more of the real details outlined in the basic framework are released, what I see are shell games — budget gimmicks that make the real cost of the so-called $1.75 trillion bill estimated to be almost twice that amount if the full time is run out. If you extended it permanently. And that we haven’t even spoken about.”
What he’s talking about here is something I addressed last week when I wrote about the “Build Back Better” framework. As Democrats were forced to pare down the price-tag of the bill, one thing they did was to only fund certain programs for a few years, in hopes that as they gained a constituency, they would get extended indefinitely. In the meantime, they can create the appearance of a less costly bill.
CBO considers the impact of a bill over a ten-year budget window and its analysts can only evaluate what’s put in front of them. In the current framework, Democrats extend the per child family allowance for a year, expand Obamacare for four years, and create universal pre-K and child-care programs that are only funded for six. If the CBO were to score this bill, they would only consider the costs for one, four, and six years, respectively. But what Manchin is talking about when he says “if you extend it permanently” is that he is trying to think about the ten-year cost of the bill if these new welfare programs remain in place beyond the expiration dates laid out in the framework. Brian Riedl of the Manhattan Institute has said the true cost of the framework is close to $4 trillion over a decade on that basis.
It is of course possible that Manchin ends up caving and finding some sort of justification for doing so. But were he to actually stick to his word and look closely at the cost of permanently extending all of the new spending programs, then it would cripple Democrats’ efforts. They would no longer be able to get away with funding the programs for a few years to get an acceptable enough CBO score. Were they to use ten-year costs as the standard, they would have to start outright eliminating many of the programs to get the bill down to around $1.5 trillion. Progressives already view the current bill as a compromise. But having adjusted to the reality of the current framework, it’s hard to know how they would react if they have to slash a lot more out of the bill.