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Biden Economic Plan Remains Stuck as Manchin Reports No Talks

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What You Need to Know

  • Senator Manchin said Tuesday that he wants any extension of child tax credit limited to those with earned income.
  • Tax credits tied to alternative energy aren’t a major source of friction, according to Senator Heinrich.
  • Senator Durbin, the No. 2 Democrat in the chamber, said the party is focused on voting rights ahead of a Jan. 17 deadline.

Senator Joe Manchin said Tuesday he’s not in talks with the White House or top Democrats on reviving President Joe Biden’s $2 trillion tax and social spending agenda, leaving the administration’s signature domestic initiative stalled.

“There is no negotiation going on at this time,” the West Virginia Democrat, a pivotal vote in the evenly divided Senate, told reporters as he returned to his Capitol Hill office for the first full Senate legislative day of 2022. “To do some of the things that have been proposed takes more of a majority than we have.”

Senate Majority Leader Chuck Schumer said he spoke to Manchin about voting rights legislation and the economic package several times during the holiday break, without giving details.

White House press secretary Jen Psaki said Tuesday that administration officials will be having discussions with “a range of senators” in the weeks ahead. She declined to say whether any talks with Manchin were planned.

Manchin said he remains concerned about inflation, the spread of Covid-19 and geopolitical unrest, all of which he says deserve more attention than Biden’s Build Back Better agenda.  In late December Manchin stunned the White House by walking away from talks on the House-passed bill, scuttling plans to enact it before the Christmas holiday.

What’s Next

Manchin suggested he could be open to future talks on some of Biden’s proposals, however, and signaled that he could agree to a bevy of clean energy tax credits aimed at combating climate change, so long as his concerns about clean fossil fuel technology and the promotion of nuclear energy are met.

“I think the climate thing is one that we probably can come to an agreement on,” Manchin said.

To satisfy Manchin, Democrats might need to modify a proposed tax credit of as much as $12,500 for the purchase of electric vehicles so its benefits better flow to middle- and low-income earners.

Although the proposed credit would be off limits for vehicles costing more than at least $80,000, Manchin has pushed for an income cutoff that would block the wealthy from claiming it.

A possible fee on methane emissions from oil and gas wells, pipelines and equipment also could be modified or struck from the final bill.

Climate, Tax Measures

The measure has been on track to include some $555 billion in climate spending, including more than $300 billion worth of new and expanded tax credits for hydrogen, advanced energy manufacturing and wind, solar and nuclear power.

The tax credits aren’t a major source of friction, Senator Martin Heinrich, a Democrat from New Mexico, said. As Democrats seek to develop a final package that can secure 50 votes, “I don’t see the tax provisions as particularly problematic in that exercise,” Heinrich told reporters in a call Tuesday.

Manchin has bigger problems with other aspects of the roughly $2 trillion bill, including its paid family leave and Medicare expansion provisions.

He said Tuesday that he wants any extension of child tax credit limited to those with earned income.  A version of the credit in place in 2021 and now expired allowed those without federal income tax liability to claim monthly payments.

The 2021 version of the child tax credit provided payments of up to $3,600 per child for couples making up to $150,000, with smaller payments going to married couples making up to $400,000. A smaller child tax credit of up to $2,000 with more restricted eligibility remains in place through 2025 under the Trump tax reform bill.

Republican Senator Rick Scott of Florida said Tuesday on Bloomberg Television’s “Balance of Power with David Westin” that there is “absolutely” a way to extend a version of Biden’s child tax credit to fewer parents that Republicans would support.

“When the Democrats talk about the child tax credit, and they want to give it to everybody, here’s what it’s going to do. One, we have to take money from somebody to pay for it, so somebody’s going to have to pay more taxes,” he said.

Voting Rights

Several Democrats on Tuesday indicated that the Biden economic agenda is being put on the back burner.

Senator Dick Durbin of Illinois, the No. 2 Democrat in the chamber, said the party is focused on voting rights ahead of a Jan. 17 deadline set up by Schumer to consider possible Senate rules changes to enact a voting rights bill.

“We’re focused on voting rights as we should be and the White House is joining us on that. And clearly we will return to Build Back Better as soon as that is done,” Durbin told reporters.

Schumer early Tuesday said negotiations will continue between the White House and lawmakers on “finding a path forward” on the economic package. He continued to insist that he will attempt to bring the legislation up for a vote. Last month Schumer said he intended to bring it up as soon as January.

“The stakes are high for us to find common ground on this legislation,” Schumer said, adding that “we’ll keep working until we get something done.”

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