After Clash, Manchin and Schumer Rushed to Reset
Climate and Tax Deal
The West Virginia Democrat said he had relented and
agreed to sign on to a climate, energy and tax package after returning to
negotiations to draft a version that would combat inflation.
Emily
Cochrane Annie Karni
By Emily
Cochrane and Annie Karni
Published
July 28, 2022
Updated
July 29, 2022, 12:01 a.m. ET
https://www.nytimes.com/2022/07/28/us/politics/manchin-schumer-climate-tax-deal.html
WASHINGTON
— Senator Chuck Schumer, the majority leader, and Senator Joe Manchin III,
Democrat of West Virginia, were both nursing resentments when they met secretly
in a windowless room in the basement of the Capitol last Monday to try to
salvage a climate package that was a key piece of their party’s agenda.
Mr. Schumer
was discouraged that Mr. Manchin had said he wasn’t ready to do the deal this
summer, and might never be. Mr. Manchin was frustrated that Democrats had spent
days publicly vilifying him for single-handedly torpedoing their agenda.
“You still
upset?” Mr. Manchin asked Mr. Schumer as their aides scoured the hallways
outside to ensure the attempt at a truce would not be detected by other
senators or reporters.
It was the
start of a frenzied and improbable effort by a tiny group of Democrats, carried
out over 10 days and entirely in secret, that succeeded this week in reviving
the centerpiece of President Biden’s domestic policy plan — and held out the
prospect of a major victory for his party months before the midterm
congressional elections.
The talks
were driven by major concessions made to Mr. Manchin — who demanded fewer tax
increases, more fossil fuel development and benefits for his home state. They
also featured appeals to his pride by fellow Democrats, reassurance by a former
Treasury Secretary that the package would not add to inflation, and many Zoom
calls between Mr. Schumer, who had just recovered from a case of the
coronavirus, and Mr. Manchin, who tested positive as the negotiations unfolded.
Now, Mr.
Manchin and Mr. Schumer are working to rally their party around their
compromise, put forth in a surprise announcement on Wednesday. It would set
aside $369 billion for climate and energy programs, as well as raise taxes on
corporations and high earners, while lowering the cost of prescription drugs,
extending health subsidies and reducing the deficit.
The abrupt announcement
of a deal suggested a potential reversal of fortune for Mr. Biden and the
Democrats, who had resigned themselves to the demise of the climate, energy and
tax package. They had been preparing to push forward with a scaled-back pairing
of the prescription drug pricing measure with an extension of expanded health
care subsidies.
“This thing
could very well, could not have happened at all,” Mr. Manchin declared on
Thursday morning in an interview with Hoppy Kercheval, a West Virginia radio
host. “It could have absolutely gone sideways, so I had to see if we can make
this work.”
Should it
pass both chambers in the coming weeks, the measure would fulfill longstanding
Democratic promises to address soaring health care costs and tax the rich, as
well as provide the largest investment toward fighting climate change in
American history.
“The work
of the government can be slow and frustrating and sometimes even infuriating,”
Mr. Biden said at the White House, where he cheered the deal. “Then, the hard
work of hours and days and months from people who refuse to give up pays off.
History is made. Lives are changed.”
‘Build Back
Better.’ Before being elected president in 2020, Joseph R. Biden Jr.
articulated his ambitious vision for his administration under the slogan “Build
Back Better,” promising to invest in clean energy and to ensure that
procurement spending went toward American-made products.
A two-part
agenda. March and April 2021: President Biden unveiled two plans that together
formed the core of his domestic agenda: the American Jobs Plan, focused on
infrastructure, and the American Families Plan, which included a variety of
social policy initiatives.
A $6
trillion budget. June 2021: President Biden proposed a $6 trillion budget for
2022. The proposal detailed the highest sustained levels of federal spending
since World War II, with the goal of funding the investments in education,
transportation and climate initiatives articulated in the two plans.
The
Infrastructure Investment and Jobs Act. Nov. 15, 2021: President Biden signed a
$1 trillion infrastructure bill into law, the result of months of negotiations.
The president hailed the package, a pared-back version of what had been
outlined in the American Jobs Plan, as evidence that U.S. lawmakers could still
work across party lines.
The Build
Back Better Act. Nov. 19, 2021: The House narrowly passed a $2.2 trillion
social spending bill intended to fund a package of initiatives from the
American Families Plan and the American Jobs Plan. But on Dec. 19, 2021,
Senator Joe Manchin III, Democrat of West Virginia, said he would not support
the bill as written, dooming his party’s drive to pass it.
A new
attempt. July 15, 2022: Efforts to revive the bill, in a much smaller form,
ahead of the midterm elections were dealt a severe blow when Mr. Manchin told
Senator Chuck Schumer, the majority leader, that he was unwilling to support
funding for climate or energy programs or raising taxes on wealthy Americans
and corporations.
A surprise
deal. July 28, 2022: In a reversal, Mr. Manchin said that he had agreed to a
deal to include hundreds of billions of dollars for climate and energy programs
and tax increases in a package to subsidize health care and lower the cost of
prescription drugs. The package’s climate proposals would be the most ambitious
climate action ever taken by Congress.
As members
called Mr. Schumer on Thursday to congratulate him on the agreement, the New
York Democrat quoted his father, who passed away last year: “As my late father
said: you need to persist, God will reward you.”
But the
success of the package was not assured.
In a
private caucus meeting with Democrats on Thursday morning, Mr. Schumer began
laying the groundwork for what promises to be an arduous process of steering
the compromise through the evenly divided Senate. The task is made more
difficult by the chamber’s arcane rules, the Democrats’ bare-minimum majority
and a coronavirus surge among senators.
Democrats
planned to advance the bill using a fast-track process known as reconciliation
that shields certain spending and tax measures from a filibuster, skirting
solid Republican opposition. But they will still need unanimous support from
members of their party, which was not yet guaranteed.
Senator
Kyrsten Sinema, who has also been a holdout on her party’s domestic policy
package, skipped the meeting with Mr. Schumer on Thursday and would not comment
on the bill or indicate whether she planned to support it. She dispatched a
spokeswoman to say she was reviewing the text and waiting to hear if it
complied with Senate rules.
Even if it
can win passage in the Senate, the measure would also need to pass the House,
where Democrats can spare only a few votes given likely unanimous Republican
opposition.
Republicans
were furious over news of the deal. In the Senate, they suggested that
Democrats had hoodwinked them into backing a major industrial policy bill
designed to shore up American competitiveness with China. Senator Mitch
McConnell, Republican of Kentucky and the minority leader, said his party would
not support the bill as long as Democrats continued to press a reconciliation
bill.
The deal
was announced just hours after that bill passed, and House Republican leaders
instructed their rank-and-file to oppose it as payback.
Senator
John Cornyn, Republican of Texas, charged that Mr. Manchin had done an
“Olympic-worthy flip-flop” on the reconciliation package.
On
Thursday, Democrats were still sorting through the details of the bill.
The
critical concessions that ultimately won Mr. Manchin’s support included
jettisoning billions of dollars’ worth of tax increases he opposed. He also won
a commitment from Mr. Biden and Democratic leaders to enact legislation to
streamline the permitting process for energy infrastructure. That could ease
the way for a shale gas pipeline project in West Virginia in which Mr. Manchin has
taken a personal interest.
While its
climate goals are ambitious, the package also has benefits for the fossil fuel
industry, including new oil and gas drilling lease sales in the Gulf of Mexico
and Alaska’s Cook Inlet. It ties federal renewable energy development to fossil
fuels, forcing the Interior Department to hold sales of oil leases if it wants
to hold wind or solar auctions. That clashes directly with Mr. Biden’s campaign
goal of ending new drilling leases on federal lands and waters.
There is
also a proposal that permanently extends a tax designed to help provide
benefits for coal miners coping with black lung disease and their
beneficiaries, a major issue for West Virginia, one of the nation’s top
coal-producing states.
It includes
a proposal to change a preferential tax treatment for income earned by venture
capitalists, though Ms. Sinema has expressed opposition to that provision in
the past.
The
agreement came together exactly one year after Mr. Manchin inked a secret deal
with Mr. Schumer laying out what he would need in exchange for backing any
spending and tax plan.
For more
than a year, Mr. Manchin has been at the center of his party’s efforts to
muscle through sweeping domestic policy legislation while they still control
Washington, wielding his influence as a conservative Democrat in an evenly
divided Senate. It is a place where his party can rarely spare a defection.
He refused
for months to embrace his party’s landmark domestic policy bill, and in
December rejected a $2.2 trillion version altogether, leaving many lawmakers
and aides wary as talks quietly picked up again this spring.
When Mr.
Manchin suggested to Mr. Schumer this month that even a more tailored package
with new climate spending and tax proposals would have to wait until new
inflation numbers were released in early August, many Democrats publicly excoriated
Mr. Manchin for upending their best remaining chance to enact their plan.
But a few
centrist allies, including Senators Mark Warner of Virginia, Chris Coons of
Delaware and John Hickenlooper of Colorado, tried a different approach.
They
refrained from openly criticizing Mr. Manchin, instead appealing to his sense
of history and his zeal for playing a leading role in forging a high-stakes
legislative deal.
They
encouraged Mr. Manchin to remain at the table, telling him, Mr. Coons said in
an interview, that “he had a chance to prove all his critics wrong, and that he
had a chance to genuinely shape our history in a way that secures energy
independence and a transition to a cleaner energy economy.”
“He really
was getting pummeled, and there was a risk that he would walk away altogether —
he didn’t,” Mr. Coons said. “Credit for his persistence and engagement goes to
him and him alone.”
In recent
days, Mr. Manchin also spoke with outside experts, including Lawrence H.
Summers, the former Treasury secretary, as he sought to ensure that the bill
would not add to inflation.
Democrats
appeared ebullient about the bill, even with some of their priorities
jettisoned or severely curtailed. Senator Cory Booker, Democrat of New Jersey,
said there was “a sense of joy that we’re really doing the most significant
bill on climate change in the history of our country,” and joked that he rarely
saw senators enthusiastic about the prospect of weekend work.
Democratic
leaders aimed to hold votes on the legislation in the Senate as early as next
week, before the chamber is scheduled to leave for a summer recess. But they
will have to navigate the legislation through a series of parliamentary and
procedural challenges, including a set of rapid-fire, politically fraught
amendments Republicans can force before a final vote.
And with
Republicans expected to unanimously oppose the measure, Democrats will need all
50 senators who caucus with them to be present and to back the package for it
to pass the Senate, along with the tiebreaking vote of Vice President Kamala
Harris.
Senator
Richard J. Durbin of Illinois, the No. 2 Democrat, said on Thursday that he had
tested positive for the coronavirus, becoming the latest senator forced to
isolate this month.
Catie
Edmondson, Lisa Friedman and Stephanie Lai contributed reporting.
Emily
Cochrane is a reporter in the Washington bureau, covering Congress. She was
raised in Miami and graduated from the University of Florida. @ESCochrane
Annie Karni
is a congressional correspondent. She was previously a White House
correspondent. Before joining The Times, she covered the White House and
Hillary Clinton's 2016 presidential campaign for Politico, and spent a decade
covering local politics for the New York Post and the New York Daily News. @AnnieKarni
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