Finance

Manchin: Scaled-down bill should focus on inflation, debt reduction

Sen. Joe Manchin (D-W.Va.), who late last year all but killed the Biden administration’s Build Back Better legislation, said on Tuesday that any new Democratic budget reconciliation bill should be focused on combating inflation and reducing the deficit.

Manchin outlined his vision of what a scaled-down bill should include to a small group of reporters after a meeting he said was focused on inflation with Senate Majority Leader Charles Schumer (D-N.Y.).

“Reconciliation to me is about getting inflation under control, paying down this debt, getting a handle on what’s going on,” Manchin said. 

Manchin indicated that the way to do that included making changes to the tax code. He outlined on Tuesday part of what he could support on tax changes as part of a reconciliation bill, including increasing the corporate rate to 25 percent, putting capital gains at 28 percent, getting rid of “loopholes” and “making sure everyone pays their fair share.” 

Democrats view the next month before Memorial Day as a key time to try to revive reconciliation, a budget process that would allow them to pass a wide-ranging policy bill through the Senate that could not be blocked by a GOP filibuster.

They would need Manchin and every other Democrat to agree to the bill.

Manchin, as he’s previously indicated, also wants half of any revenue to go toward deficit reduction, saying that it’s the “only way you’re going to fight inflation.” 

“Just a fair, competitive tax code,” Manchin added about wants to see in a reconciliation bill. 

Spokespeople for Schumer didn’t immediately respond to a question about the meeting, though Manchin indicated that the Democratic leader was open to his ideas. 

Manchin said he was not talking with the White House and stressed there were no “formal” negotiations going on about bringing back a reconciliation bill. 

“There’s nothing formal. There’s no false hopes here. There’s nothing. As far as Build Back Better, there’s no talk about any of that. Just saying, how do we get a handle on inflation?” Manchin said. 

Some Democrats have pegged Memorial Day as a key timeline for coming up with an agreement, but Manchin declined to commit to a specific time frame on Tuesday. 

The rough sketch of what a bill should be focused on is substantially different and narrower than the roughly $2 trillion House-passed Build Back Better legislation that Manchin killed late last year when he said that he couldn’t support it. 

That bill was a sweeping tax and spending bill that also included changes to climate and energy policy as well as broad social and health care programs. 

Manchin, however, on Tuesday rejected including programs such as paid leave, saying that any social policy changes need to go through the Senate committee process. 

“I said no. Social programs go through the committee. We’re not talking about going down that path again,” Manchin said. 

That could be a tough red line for many of his Senate Democratic colleagues who view reconciliation as their best chance to make good on long-held policy goals, including expanding Medicare, shoring up ObamaCare, creating a paid leave program and expanding a beefed-up child tax credit. 

Reviving reconciliation would be a heavy lift for Democrats. Manchin’s support for raising the corporate minimum tax rate to 25 percent sparks pushback from Sen. Kyrsten Sinema (D-Ariz.). 

Manchin’s vision of a tax- and deficit reduction-focused plan also comes as he and Sen. Lisa Murkowski (R-Alaska) have started a separate group aimed at finding a deal on energy and climate change legislation that could get 60 votes instead of the Democratic-only path of reconciliation. That group met on Monday night. 

“He knows on energy that I’m working with a group trying to find a bipartisan way that we want to move forward,” Manchin said, referring to Schumer. 

Tags budget reconciliation Build Back Better Charles Schumer Charles Schumer Climate change Inflation Joe Manchin
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