Overnight Finance

On the Money — Democrats grow less confident in Manchin

Sen. Joe Manchin (D-W.Va.) arrives to the Capitol for a cloture vote regarding a nomination on Wednesday, January 5, 2022.
Greg Nash

Happy Monday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup.

Today’s Big Deal: Senate Democrats are becoming less confident about whether Sen. Joe Manchin wants to strike a legislative deal with President Biden for Build Back Better, the centerpiece of his economic agenda. We’ll also look at how Manchin’s broader objections to the package spell trouble for a rollback of the cap on the state and local tax (SALT) deduction.

But first, did you hear that a Maryland man just received a heart transplant in a first of its kind success from … a genetically-modified pig?

For The Hill, I’m Aris Folley, filling in for Sylvan Lane on the Finance team. Write me at afolley@thehill.com or @ArisFolley. You can reach Sylvan at slane@thehill.com or @SylvanLane.

Let’s get to it.

Senate Democrats become skeptical of Manchin

Senate Democrats are growing less and less confident about whether Sen. Joe Manchin (D-W.Va.) wants to strike a legislative deal to help secure passage for President Biden’s sweeping economic agenda.

The lack of negotiations with Manchin since Congress returned from the Christmas recess and Manchin’s definitive statements of opposition are raising serious doubts about whether he would be willing to support any version of the Build Back Better Act, which would provide new funding for health care, child care and a host of other initiatives.

Manchin says he has tried to be as clear as possible about where he is, but fellow Senate Democratic colleagues feel confused about whether the West Virginia senator can be counted on to support some version of Biden’s economic plan.  

  • Senate Majority Whip Dick Durbin (D-Ill.) said he has “no idea” whether Manchin wants a deal and that he has no more clarity about whether Manchin can get to “yes” than when the negotiations began in August. “Still in the dark,” he said when asked about Manchin’s endgame strategy.
  • Other Democrats are growing skeptical of Manchin’s motives and wonder if he’ll ever get pinned down to something specific. Some also agree that there’s been little evidence Manchin wants a deal.
  • “I have no reason to think that he does, literally no reason to think that he does,” said a Democratic senator, who also pointed out that Manchin hasn’t showed any serious intention to pass Build Back Better or change the Senate rules to overcome a GOP filibuster against voting rights legislation. “All the evidence is to the contrary.”

The comments mark a significant shift in tone and outlook among Senate Democrats compared to before the Christmas break, when lawmakers thought Manchin would be prepared to vote in January.

The Hill’s Alex Bolton has more here.


SALT change on ice in the Senate

A rollback of the cap on the state and local tax (SALT) deduction is also on ice after Manchin raised broader objections to Biden’s social spending and climate package. 

Democrats from blue states such as New York and New Jersey have been pushing to include a rollback of the SALT deduction cap in the spending package, though lawmakers have yet to reach an agreement on what such a provision would look like. 

But Manchin last month said he opposes the spending bill, expressing concerns about inflation and the national debt.  

  • Republicans’ 2017 tax cut law created a $10,000 cap on the SALT deduction in an effort to raise revenue to help pay for tax cuts elsewhere in the measure. Many Democrats from high-tax states have railed against the cap, arguing that it hurts their residents as well as their states’ abilities to provide public services.
  • A group of Democrats from high-tax states has demanded that the SALT deduction cap be eased as part of Biden’s spending package, known as the Build Back Better Act, which also includes items such as universal pre-K, an expansion of ObamaCare and clean energy tax credits. The House passed a version of the package in November that would raise the cap from $10,000 to $80,000.
  • But a number of Democratic senators have criticized the House provision on the SALT deduction, arguing that it would largely benefit high-income households. Senators instead were looking at creating an exemption from the $10,000 cap for taxpayers under a certain income level, though they thus far have not reached a deal on the details.

Manchin has thrown a wrench in efforts not only to roll back the SALT deduction cap but also to pass any version of the spending package. 

It’s unclear when, if ever, the West Virginia Democrat will agree to support any version of the package. The plan will likely need to undergo significant revisions to gain the backing of Manchin, who has argued that other Democrats are masking its true cost by making some of the programs in the bill temporary.

Read more here.


Treasury warns of delayed tax refunds 

The Treasury Department is warning that tax refunds and other services may be delayed this year because of “enormous challenges” including the coronavirus pandemic and previous budget cuts made at the Internal Revenue Service (IRS).

Treasury officials told reporters during a phone call on Monday that they are predicting a “frustrating season” for taxpayers and tax preparers because of factors that also included federal stimulus actions, according to The Washington Post.

The IRS is also entering filing season with a large backlog of unaddressed returns, officials told reporters. The agency usually has about one million unaddressed returns, but this year’s number could be “several times” that, a Treasury official said, according to the Post. They declined to provide a more exact prediction.

The Hill’s Mychael Schnell has more here.


Treasury rolls out quarters featuring Maya Angelou

The U.S. Mint on Monday announced it has begun shipping out the first coins in its American Women Quarters Program, with the late poet and novelist Maya Angelou becoming the first Black woman to be depicted on the quarter. 

Last year, the Mint announced it would be including several notable figures in its American Women Quarters Program, including Angelou; Chinese American film star Anna May Wong; the first U.S. woman in space, Sally Ride; and Wilma Mankiller, the first woman to be elected principal chief of the Cherokee Nation.

The program was established through the Circulating Collectible Coin Redesign Act of 2020, which required that five prominent American women be recognized on quarters every year between 2022 and 2025.

Read more from The Hill’s Joseph Choi here.

Good to Know 

Sen. E Warren (D-Mass.) is seen during a Senate Banking, Housing, and Urban Affairs Committee hearing to discuss oversight of the CARES Act within the Federal Reserve and Department of Treasury on Tuesday, September 28, 2021.

Sen. Elizabeth Warren (D-Mass.) on Monday said Federal Reserve Chairman Jerome Powell’s failure to disclose requested information on the trading scandal that rocked the central bank suggests that the Fed is hiding the full scope of the situation.

Here’s what else we have our eye on:

  • Concerns over the economy are overshadowing worries regarding the COVID-19 pandemic in a new poll.The survey found that 68 percent of adults in the U.S. named an economic concern among the top five problems they would like the government to address in 2022, while only 33 percent of respondents named COVID-19.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.

Tags Dick Durbin Elizabeth Warren Jerome Powell Joe Biden Joe Manchin

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