Democrats Still in the No-No-No Stage of Negotiating Budget Deal

(Bloomberg) -- As progressives hold infrastructure legislation hostage and Democrats bicker over whether to spend $3.5 trillion on social programs, it’s worth remembering that deals in Congress often come together like this:

NO, NO, NO, NO, NO, NO, NO. YES TO FRAMEWORK. NO, NO, NO, NO, NO, NO. YES.

It’s clear that Democrats remain in the “NO, NO, NO” stage when it comes to the two legislative packages that carry the main thrust of President Joe Biden’s longer-term economic agenda.

Revelations Thursday that West Virginia Senator Joe Manchin had privately set a $1.5 trillion cap on what he would support in July to Senate Majority Leader Chuck Schumer -- and Manchin’s insistence again Thursday on sticking to that number -- is only the latest “NO” on the $3.5 trillion social spending package sought by the Biden administration and most congressional Democrats.

Another “NO” is from progressives loudly decrying Manchin’s push and  contending that for them $3.5 trillion is already a compromise from the $6 trillion proposal originally put forward by Senate Budget Committee Chairman Bernie Sanders. 

The Stakes

Meantime, it remains unclear what Manchin’s moderate fellow traveler Kyrsten Sinema of Arizona would support.

Bickering is loud because the fate of more than a decade’s worth of pent-up progressive priorities -- climate, health care and paid family leave, to name a few -- hang in the balance. Also on the line: potentially, the success or failure of Biden’s presidency, already weighed down by the messy withdrawal from Afghanistan, a resurgent Covid-19 pandemic, a burst of inflation and a historic surge of migrants on the U.S. border with Mexico.

Normally, the “NO, NO, NO” stage yields to an interim agreement so that the details can then be negotiated. When it comes to the so-called reconciliation bill that spells out the tax and social spending package, that framework was supposed to be the annual budget resolution. But rather than uniting Democrats, congressional passage of the $3.5 trillion budget resolution was immediately followed by Manchin and Sinema declaring they wouldn’t back a package that large.

It was a false start, as it were. And progressives, for leverage, then threatened to block the Sinema-and-Manchin negotiated bipartisan infrastructure deal, totaling some $550 billion -- another NO. 

Time Remains

It wasn’t long before Manchin started publicly seeking to pause reconciliation entirely, while privately telling Schumer he didn’t want a reconciliation plan to happen until after Oct. 1.

The calendar still leaves plenty of time to cut a deal. And while a far cry from what liberals want, even a $1.5 trillion package over a decade would be one of the biggest ever passed by Congress. (Manchin suggested Thursday if progressives want a bigger number, they could elect some more liberals to the Senate.)

A similar dynamic happened in 2009 and 2010 over President Barack Obama’s Affordable Care Act, with progressives insisting on a public health insurance option and vowing to vote “NO” otherwise.

But the key Senate vote that got the ACA the needed 60 members -- Joe Lieberman of Connecticut -- insisted on killing the public option. He also opposed a last-ditch effort to lower the eligibility age for Medicare. Then-Senate Majority Leader Harry Reid was forced to cave, but House progressives still held firm.

Getting to ‘Yes’

It wasn’t until Republican Scott Brown won an election to replace the late Democratic Senator Ted Kennedy in early 2010 that progressives encountered a make-or-break moment.

Nancy Pelosi, then as now the House speaker, rallied them to back the Lieberman-ized Senate version of the ACA alongside a budget reconciliation package including some tweaks backed by the House -- but no public option. The whole, messy process took far longer than they wanted, but it was signed into law in March -- a final YES after a long, long line of NOs.

The bottom line: A partisan imperative to get something done ahead of midterm elections tends to take over the longer that a president’s priority languishes. 

But there’s sure to be some more NO, NO, NO’s before Biden and the congressional Democrats finally get to YES.

©2021 Bloomberg L.P.