TAP’s Dave Dayen discusses Joe Manchin’s op-ed this weekend in which he wrings his hands about inflation and deficits in the reconciliation package making its way through the congress:
Manchin doesn’t want you to know too much about the bill he’s trying to kill. Or at least, he doesn’t want you to know why he doesn’t like it. Because if Manchin were truly concerned that we’ve let costs for working families run out of control and we must avoid passing a terrible future on to the next generation, he would be the first in line to pass the reconciliation bill.
About the only thing Manchin lets on in his op-ed is that the reconciliation bill would spend $3.5 trillion. (In reality it doesn’t, because there are offsetting tax increases and budget savings, but let’s put that aside for a second.) But if you boil it all down, the bill has two main goals. The first aligns perfectly with Manchin’s aims of controlling inflation.
More than half of the reconciliation bill attempts to take the biggest drivers of the increase in cost of living in American life over the past 40 years—health care, education, and housing—and bring those costs down for working families. These costs in particular have been the greatest hurdle to upward mobility and a sustainable middle-class lifestyle. The bill is singularly oriented toward reducing those costs.
It tries to do this at every stage of the life cycle. It gives subsidies to make child care affordable and establishes universal pre-kindergarten. It makes community colleges tuition-free, thereby creating a public option to cost-prohibitive higher education. It seeks to build two million new housing units, and also lower housing costs through a wide range of programs, from zoning reform to community land trusts. It subsidizes insurance premiums for Obamacare recipients on the exchanges, and converts unpaid family and medical leave to paid, so workers can afford to experience a pregnancy or the care of a parent. For seniors, it cuts costs by expanding Medicare to encompass dental, vision, and hearing, and it negotiates prices on prescription drugs to bring down those costs. And it subsidizes home and community-based services to drastically reduce the cost of living in place at the end of life.
I won’t even go into the various tax breaks and program expansions for working families in the bill, from a bulked-up child nutrition program to extensions of the enhanced Child Tax Credit and Earned Income Tax Credit. But the goal of those programs is to lift families out of poverty and make their budgets more manageable.
He discusses how the health, eduction and housing portions of the bill are actually deflationary and notes that the coal Senator is predictably hostile to any climate change legislation which is just frightening at this point.
Manchin’s real problem is that he wants to make the bill more inflationary, in the name of preventing inflation.
That’s because the bill pairs spending initiatives with tax reform, aimed at rolling back some of the Trump tax cuts and increasing taxes on corporations and the wealthy. We don’t know how many tax increases will be in there—Manchin and his ideological allies inside and outside Congress are resisting those to the degree that the party is considering some level of deficit spending—but it’s a pillar of the legislation. Other savings come from Medicare negotiation with prescription drug companies, which has led to pharma companies enlisting building trades union allies in their opposition.
The thing about these tax reforms and drug price reductions is that they are extremely popular. Adding tax increases makes the various infrastructure bills under consideration more popular, in fact. Manchin and his Republican colleagues made sure that the bipartisan infrastructure bill had no tax changes of any kind. He’s been murmuring about trimming tax reform for months. But now he doesn’t want to make a frontal assault on behalf of the rich people and corporate executives who fund political campaigns. So he talks about deficits and inflation, which have no real application to this legislation, to hide the ball on his real goal.
NObody can say that Manchin is just representing his constituents when he protects wealthy people from taxation. His state is among the poorest in the nation. He doesn’t need the money either. This is a clear cut case of aristocratic ideology. That he would do this while presenting himself as a man of the people is reprehensible.
The truth is that the bill is much less than 3.5 trillion. There are a ton of off-sets and pay-fors (mostly with taxe hikes on the wealthy.) I continue to believe that the best way to handle him and Sinema is to insist on the bill being 3.5 trillion, no matter what even though it isn’t. Then they should go behind closed doors for a few days and come out with the real number giving Manchin and Sinema credit for “cutting” it.
These two are Divas. They need attention and desperately want to be seen as powerful mavericks who know how to wield their power. But they aren’t wonks and neither of them really care about any of this. Treat them like the spoiled, petty royals they are and give them their moment in the sun. It’s pathetic but it’s the only way to deal with these people.