Republicans Urge Manchin to Quash Biden Bill Amid Inflation
Republicans Appeal to Manchin to Kill Biden Bill Amid Inflation
(Bloomberg) -- Republicans seized on fresh data showing the highest U.S. rate of inflation in four decades as new ammunition to fight President Joe Biden’s tax-and-spending plan, saying the roughly $2 trillion package would would only increase living costs and urging Democratic Senator Joe Manchin to kill the bill.
Adding to the president’s burden, a Congressional Budget Office analysis released Friday showed that Biden’s “Build Back Better” plan would -- if new and expanded programs are made permanent without new revenue -- cost far more than Democrats say.
“This is a one-two punch to Build Back Better,” South Carolina Republican Senator Lindsey Graham said of the November consumer price index data and the Republican-requested report on the legislation’s cost.
The White House disputed the premise of the CBO report, arguing that Biden has long said he would only support expanding programs if doing so was fully paid for.
“I honestly can’t think of a more laughably discrediting way to lose the argument than this charade, which is all about hurting middle class families in order to preserve tax breaks for the wealthy,” White House spokesman Andrew Bates said.
Manchin Chat
Manchin, the Senate’s most conservative Democrat, who has the power to crush Biden’s $2 trillion agenda in a Senate divided 50-50 between Republicans and Democrats, has yet to comment on the two reports. The key holdout on Biden’s bill has said he wants to see the final text of the legislation Democratic leaders plan to bring to the floor.
Biden told reporters Friday that he plans to speak to Manchin early next week.
Republicans trumpeted the 6.8% annual gain in the consumer price index to buttress their argument that it’s time to rein in the government, not expand it.
“It is unthinkable that Senate Democrats would try to respond to this inflation report by ramming through another massive socialist spending package in a matter of days,” Senate Republican Leader Mitch McConnell said.
Democratic Narrative
Biden said the tax-and-spending bill would have a “negative impact on inflation,” and pinned rising costs instead to supply-chain shortfalls.
Wharton economist Kent Smetters told Congress last month that Wharton estimates the bill as written would add 0.25% to inflation in 2022, mostly due to the up-front child tax credit payments.
Democratic leaders including Speaker Nancy Pelosi counter that Build Back Better would reduce costs for middle-class families on some of their biggest bills.
“November’s inflation numbers only add urgency to passing the Build Back Better Act to lower the costs that weigh heaviest on working families’ budgets, from the price of child care to health care to prescription drugs and more,” she said.
Biden said in a statement that U.S. price increases slowed after the November CPI data, in particular for gasoline and cars. “Developments in the weeks after these data were collected last month show that price and cost increase are slowing, although not as quickly as we’d like,” he said.
Manchin has long argued that the Federal Reserve has printed too much money at a time of rising costs, and said Thursday night in a brief interview he’s still trying to set up another meeting with Fed Chair Jerome Powell to discuss Powell’s plans to rein in inflation.
The West Virginia senator has previously urged a pause on Biden’s tax and spending bill, and a much smaller price tag, of $1.5 trillion over a decade. In recent weeks he has been negotiating with fellow Democrats on several issues, including energy and tax policy.
Manchin, whose home state was overwhelmingly won by President Donald Trump, has also complained that Democrats allowed Biden’s child tax credit and other measures to expire earlier to shrink the price tag. That would require a future Congress to decide whether, and how, to extend them.
The Congressional Budget Office on Friday produced an analysis at the request of Republicans showing that if benefit programs in the bill were extended without paying for them, then the bill would add $3 trillion in deficits over ten years. That compares with $200 billion in deficits added under CBO’s score of the bill as written.
Programs’ Duration
“Joe Manchin has been wanting to know without gimmicks how much the bill costs,” Graham said. “We now know, more than double.”
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, gave Biden credit for only supporting making the benefits in his bill permanent if they are paid for.
“But it’s impossible to predict the political situation in 2027, 2025, or even the end of 2022 as the chaotic schedule of expirations unfolds,” she added. “And historic experience doesn’t instill confidence – more often than not, extensions of expiring policies are added to the nation’s credit card.”
Senate Majority Leader Chuck Schumer called the Republican-requested CBO report “fake scores based on mistruths” because it does not take into account Democrats’ commitment to ensuring any extensions of the bill’s benefits be fully offset.
The political consequences and financial fallout of a failure to pass Biden’s plan could be swift, with child tax credit payments of as much as $300-a-month per child running out this month. Finance Chairman Ron Wyden said Thursday he’s focused on passing the bill by December 28 to ensure those payments go out without delay in January.
Among Manchin’s concerns is the sizable federal deficit as well as growing red ink from entitlements like Medicare and Social Security. He has criticized proposals to expand and create other social programs like a paid family leave program until existing programs are made solvent for the long term.
Manchin and Senator Kyrsten Sinema of Arizona had earlier forced the package to shrink from $3.5 trillion. But rather than jettison major planks, Democrats over Manchin’s objections mostly phased out programs earlier, with the intention of extending them later.
Manchin and Republicans complained that doing so masked the true cost of the proposal if all of the programs were extended as the Biden administration wants, though Biden has said he would insist future extensions not add to the deficit.
Manchin has also pushed for work requirements and limiting who can get benefits and tax credits, though other Democrats have pushed back hard on both ideas.
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