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On Sunday, December 19, Sen. Joe Manchin (D-WV) announced that he would not vote for the Build Back Better Act (BBB) in its current form despite the White House and other Democrats working hard to win his support. Thanks to the Senate’s 50-50 party split, Manchin’s withdrawal appears to end the Senate’s plans to advance a modified version of the House-passed Build Back Better Act (H.R. 5376) before the end of the year. 

Anyone saying the BBB is dead, however, is saying so prematurely. Manchin’s move does not “kill” the BBB. It does force Democrats back to the drawing board, which means that they will likely blow past urgent deadlines like the upcoming expiration of the Child Tax Credit paid directly to low-income families, the loss of “black lung” aid for former mineworkers, and various business tax extenders. However, a few weeks off for the holidays could be what everyone needs before they go back to the drawing board.

How We Got Here

Manchin’s withdrawal angered Democrats, who dramatically scaled down major components of the BBB Act to win Manchin’s support. Leaders cut benefits under a proposed national paid leave program, dropped a proposed permanent Child Tax Credit in favor of a one-year extension, and removed fees and incentives from the BBB encouraging utilities to switch to low-emission electricity sources. However, Manchin repeatedly voiced concerns about the bill’s cost and impact on the national debt. 

The Blame Game

Manchin’s announcement set off a torrent of angry press releases and finger-pointing. Criticism started with the White House: Press Secretary Jen Psaki accused Manchin of misleading President Biden on his commitment to the BBB. Senate Majority Leader Chuck Schumer (D-NY), who signed a private agreement with Manchin in July that acknowledged Manchin’s policy priorities and spending topline, insisted the Senate would still vote on the BBB in January “to make their position known on the Senate floor, not just on television.” Progressive Democrats also felt betrayed. With President Biden’s support, they dropped earlier demands to tie the BBB to a bipartisan highway infrastructure bill (the Infrastructure Investment and Jobs Act, P.L. 117-58, also known as the “BIF”), hoping that allowing the BIF to pass would encourage moderates like Sen. Manchin to in turn support the BBB. Even other moderates dinged Manchin, including centrist Rep. Abigail Spanberger (D-VA) and the moderate think tank Third Way. 

Manchin, for his part, fired back that Democrats can win his support. For example, Manchin on Sunday repeated his concern that the BBB’s authors obscure the bill’s planned cost by setting certain programs, such as a Child Tax Credit extension, to last only a few years instead of the full ten years covered in a budget reconciliation proposal. Manchin also reportedly sent his own offer for an updated BBB to the White House on Thursday, December 16. His changes kept the BBB’s childcare and pre-kindergarten programs and an expansion of the 2010 health reform law, while slimming down its climate change measures. Manchin’s offer reportedly didn’t, however, include an extension of the expanded Child Tax Credit, which is a top priority for the White House and many other Democrats in Congress. Today, Manchin added a prescription drug plan already refined with other moderate Democratic Senators to his list of concerns in a local radio interview. Finally, a close confidante of Manchin’s, Steve Clemons of The Hillwrote today that Manchin did what he did because he felt the White House and other Democrats unfairly singled him out in BBB negotiations and that tactics like protesting at his home did more harm than good.

Where We Go from Here

At the moment, tensions are high, feelings are hurt, and fingers are pointing. None of that, however, means that BBB is dead.

The truth is that Manchin wasn’t the only obstacle for the BBB. There is a laundry list of other issues that impact the vote total:

  • A few days before Manchin’s announcement, the non-partisan Senate Parliamentarian recommended removing the BBB’s immigration relief provisions, a key priority for the Congressional Hispanic Caucus and progressives, because they do not fit under the Senate’s reconciliation rules. 
  • The Parliamentarian has not finished her scrub of the bill and could still rule other provisions out of order.
  • Democrats still need to barter a deal on the state and local tax (SALT) deduction, balancing the demands of the New York and New Jersey delegations with the concerns expressed by Sen. Bernie Sanders (I-VT) and others about its distributional impact.
  • Moderates, such as Sens. Kyrsten Sinema (D-AZ) and Catherine Cortez Masto (D-NV) have successfully pushed for their own changes in the BBB’s tax sections, but other Senate moderates facing re-election next year, such as Sens. Mark Kelly (D-AZ) and Maggie Hassan (D-NH), could still seek their own concessions.

In short, the BBB that passed the House was never going to pass as is through the Senate. The House passed it to move the ball forward under the assumption that there would be further changes.

The White House and Democratic Senate Majority Leader Chuck Schumer (D-NY) said early Monday that the Senate will proceed with a vote on the Build Back Better (BBB) in early January. However, it is unclear in what form that might happen given the aforementioned outstanding issues with the bill text. Nevertheless, the announcement clearly assumes such a vote destined to fail with Manchin’s opposition.

Setting aside a show vote designed to fail, there are three front-runners as Democrats chart a substantive path to BBB passage, but each comes with tradeoffs and obstacles.

  1. Democrats could completely redesign the BBB. White House Chief of Staff Ron Klain on Sunday sent a tweet that was supportive of a statement from the New Democrat Coalition, a business-friendly grouping of 97 House Democrats. The statement called for doing “a few things well for longer,” including the Child Tax Credit. Senate Finance Committee Chairman Ron Wyden (D-OR) has already outlined his top priorities for a potential new BBB package: extending the expanded Child Tax Credit, addressing climate change, and lowering the cost of health care and prescription drugs. The downside with this approach is that Democrats will have to make tough decisions on which programs make the cut and which don’t – and balance those decisions with the slimmest of majorities in the House and Senate.
  2. A second option is to simply adopt the plan Manchin sent to the White House on December 16. This is essentially a variation on Option 1 since Manchin wants fewer programs done well. This option would just involve picking his favored programs. On the one hand, this bill would have Manchin’s support, or at least call his bluff. On the other, there is no guarantee that it would have everyone else’s support. It only takes one Senator to make a stand on the Child Tax Credit, SALT, or some other provision to block passage. Progressive Democrats may also balk at an even slimmer BBB, especially after making many concessions on size and scope already. 
  3. A final alternative is to break up the BBB into smaller standalone bills. The pro is that Manchin it may be more likely to support at least some of these bills. The con is that this would essentially set each up to fail because the Senate would no longer be operating under budget reconciliation rules. Each standalone bill would require at least ten Republicans’ support. And while Leader Schumer has suggested he would harder look at altering the chamber’s filibuster rules, Sens. Manchin, Sinema, and others have already made fairly strong indications of their skepticism about changing the rules.

Near-Term Concern

While they sort out the BBB, Democrats have a pressing problem in the near-term: A lot of programs expire on December 31. The BBB contained long-term modifications, expansions, and/or extensions for a number of policies, including the Child Tax Credit, a health program for retired mine workers suffering from “black lung,” a slew of business and individual tax breaks supporting alternative fuels and specialty business (“extenders,”), incentives for charitable donations and flexible spending account rollovers, and more. All expire on December 31. State and city governments also hope Congress will extend unspent coronavirus aid dollars set to expire on December 31. Congress won’t return to DC until early January, but MBS expects that staff on the committees of jurisdiction, especially the House Ways and Means and Senate Finance Committees, will spend the holiday break developing a fix. The MBS team will remain on alert through the holidays to report on new legislation. 

Michael Best Strategies (Strategies) helps companies accelerate their success through a combination of strategic business consulting, lobbying, government relations, public affairs, and communications. The firm has thrived by providing a diverse team of professionals with the experience, skills, and relationships necessary to help each client achieve their goals more quickly and fully.