Manu Raju reports:
Just caught up with Manchin, who set a very high bar for passing 'chunks' of Build Back Better plan.
In short, he wants to see inflation, covid and the national debt dealt with first.
Also said they'll be 'starting from scratch' and his December offer isn't on table
— Manu Raju (@mkraju) January 20, 2022
He goes on to quote Manchin as saying Washington needs to “get your financial house in order. Get this inflation down. Get covid out of the way. Then we’ll be rolling.”
If he means that, there is no possible way that chunks of Build Back Better will be passed before midterms.
The national debt situation is only going to get worse as the Fed raises interest rates. With federal debt held by the public at approximately 100 percent of GDP, every Fed rate increase adds significantly to the deficit by increasing the federal government’s interest payments. Those are unavoidable debt increases; there’s no way to pass legislation or reform programs to change the interest payments. Many economists are expecting the Fed to raise rates as many as four times this year, with the first increase coming in March.
Inflation isn’t going away anytime soon. Large portions of the government’s Covid relief remains unspent. Though people expect the Fed to tighten things up soon, the money supply is still expanding at a historically high rate. Supply constraints and labor shortages show few signs of easing in the economy at large. In other words, none of the key ingredients of the present inflationary episode is likely to change in the near future, at least for the rest of this year.
On Covid, the virus is extremely unpredictable and the emergence of a new variant could complicate things — we really don’t know. But there’s lots of good news. We have vaccines that are highly effective at preventing hospitalization and death. We have antiviral pills to treat Covid if people do catch it. The virus is becoming milder, on average, and the most vulnerable populations are nearly 100 percent vaccinated.
Biden could have followed in Democratic Colorado governor Jared Polis’s footsteps and said, “The emergency is over.” But he hasn’t, and his administration is just now getting around to policies that would have made more sense in April or May of 2020, such as mailing people N95 masks and Covid tests. Noisy segments of his base are staunchly opposed to any loosening of Covid restrictions, and many of them actually want more restrictions. Even though the pandemic emergency should be over, it seems highly unlikely that Biden will govern that way.
If Manchin is serious about the list of standards he gave to Raju, there’s simply no way Build Back Better will be passed in any form during this congress. Republicans look primed to take the House and possibly the Senate in November, and at that point, any hopes of passing it are dead for good.
Biden is trying to appear as though he is pivoting to a new strategy while actually just reiterating everything that didn’t work for him last year. The renewed effort around Build Back Better is no exception. Manchin wasn’t on board last year, and he isn’t on board now. If he sticks to his word today, he won’t be on board for at least the rest of this year.
The most important fact will remain: Democrats don’t have the votes.