Top Democrats and the White House are eyeing a revival of a stalled-out tax-and-spending bill as the party tries to show deliverables to voters heading into a November election where they are facing tough political headwinds.
The hopes of reviving Build Back Better — albeit significantly altered and likely with a different name — comes after Sen. Joe Manchin (D-W.Va.) deep-sixed a roughly $2 trillion, House-passed bill late last year. Since then they’ve struggled with when, or how, to revive the issue with most of the political oxygen focused on a Supreme Court vacancy and Russia’s invasion of Ukraine.
But Democrats are signaling they want to turn back to the spending plan that was meant to be the center of a stalled legislative agenda after a current two-week break even as they face many of the same hurdles and intraparty tensions that plagued the 2021 talks.
White House chief of staff Ron Klain pointed to a reconciliation bill — which lets Democrats pass key priorities without needing GOP votes — as on the party’s legislative to-do list.
“We have to come back and figure out what formula works with the 50 to get it passed in the Senate,” Klain said in an interview with NBC’s “The Chuck ToddCast” podcast.
Senate Majority Leader Charles Schumer (D-N.Y.), during a recent press conference, acknowledged that discussions are still relatively nascent between Democratic senators and Manchin but said that clinching a spending deal is still a priority for the caucus.
“We’d like to move a reconciliation bill and go as far as we can, get as much done as we can with 50 votes,” Schumer told reporters.
Democrats and the White House are signaling that they’ve learned lessons from last year’s failed talks.
The White House is being careful not to talk about or publicly criticize Democratic senators whose votes they’ll ultimately need. Manchin publicly fumed late last year and appeared to accuse White House staff of leaking information during several rounds of Build Back Better negotiations, saying that they “put some things out that were absolutely inexcusable.”
National Economic Council Director Brian Deese, during a Christian Science Monitor event with reporters, declined to comment on conversations about trying to cut a long-sought spending deal that would carry many of the party’s legislative priorities.
“I don’t think that has served anyone particularly well,” he said. “But we are continuing to work and focus and make the case for an approach that we think makes a lot of economic sense right now.”
Deese’s comments come after White House press secretary Jen Psaki first hinted at the strategy earlier this year when, asked about Manchin, she told reporters: “I’m just not going to get into private discussions or conversations with any members of the Senate … I know that’s maybe a change.”
Neither Senate Democratic leadership nor the White House have set a firm deadline for when they would want to get a revived deal. But some Democratic senators have floated Memorial Day, or at the latest mid-summer, before they pull the plug for good.
Reviving even a smaller version of the bill feels like a longshot given the fact that Democrats are facing many of the same headaches that bungled the first effort.
Sen. Kyrsten Sinema (D-Ariz.), during an Arizona Chamber of Commerce speech, indicated that her red lines remained intact from the Build Back Better talks.
“What I can’t tell you is if negotiations will start again,” she said, “I’ll be the same person in negotiations if they start again that I was in negotiations last year.”
“You all know, the entire country knows that I’m opposed to raising the corporate minimum tax rate,” Sinema added to the business group.
Manchin has engaged in informal talks. Though cautioning that he’ll talk with anyone and that formal, serious negotiations haven’t yet started, he’s sketched out what he wants to see in a smaller package: an overhaul of the 2017 GOP tax bill, including raising taxes on the wealthy and corporations, as well as prescription drug reforms and an energy and climate package.
He’s also making it clear that his colleagues would have to drop some of their pet projects, saying during a recent Hoppy Kercheval interview that “we’re not going down the social [programs] path in reconciliation.”
“I’m happy to talk to you about a good tax package,” Manchin said. “I’m happy to talk to you about a climate package, an energy, climate package, but … you can’t basically just beat the living crap out of the engine that runs the train, pulls the train, which is the fossils right now as we transition.”
Manchin is also concerned about inflation, which has only increased since Build Back Better collapsed last year and is the biggest political wind now pushing against the party. Manchin wants half of any new revenue from a spending bill to go toward deficit reduction.
The Labor Department said on Tuesday that its consumer price index, which tracks inflation, increased by 1.2 percent in March and 8.5 percent over the past 12 months. After the release of the data, Manchin warned that “we cannot spend our way to a balanced, healthy economy and continue adding to our $30 trillion national debt.”
The White House is signaling that they could try to assuage Manchin’s concerns by packaging debt reduction with programs aimed at cutting costs for Americans into a bill. Senate Democrats have talked up trying to lower costs as the center of their message to voters heading into November, but any bill would need GOP support to pass outside of budget reconciliation.
Deese, asked for a status update on Build Back Better, pointed to lowering the deficit and lowering costs in areas like prescription drugs and energy sectors.
“Our fiscal policy prescription right now is very clear and we think it’s the right one, which is let’s couple actions to lower costs for people with a package that would lower the deficit,” he said.
Beyond policy and policy hurdles, Democrats are facing another headache: The calendar.
Democrats passed a sweeping coronavirus relief bill last year and recently got a deal on new legislation cracking down on Russia, but they are quickly running out of time to enact their priorities. Helping drive the urgency is the November elections, where Republicans are feeling bullish about flipping at least one chamber and would put a kibosh on a Democratic spending and tax reform package.
They still need to work out a final deal on legislation aimed at curbing China’s competitiveness and try to break a stalemate on $10 billion in domestic coronavirus aid. Democrats are also vowing to bring up another package this spring that would link global vaccine funds. And Congress has other must-pass bills like sweeping defense policy legislation that typically starts moving in early summer.
Klain predicted that the rest of the year would be “jam packed.”
“This year really means, you know, five remaining months, one of which is August, when very little gets done,” he said. “And so we really have to move the key pieces of legislation left to be moved through the House and Senate with tempo.”