Sen. Joe Manchin III last week made the White House a concrete counteroffer for its spending bill, saying he would accept a $1.8 trillion package that included universal prekindergarten for 10 years, an expansion of Obamacare and hundreds of billions of dollars to combat climate change, three people familiar with the matter said.
But the West Virginia Democrat’s counteroffer excluded an extension of the expanded child tax credit the administration has seen as a cornerstone of President Biden’s economic legacy, the people said, an omission difficult for the White House to accept in the high-stakes negotiations. The people spoke on the condition of anonymity to discuss the closed-door deliberations.
Manchin’s private proposal to the White House — the details of which have not been previously reported — was made just days before a spectacular public collapse in negotiations between the White House and the senator, marked by bitter and personal recriminations that left the status of the talks unclear.
The White House was weighing how to respond to Manchin’s proposal last week when on Sunday he told Fox News that he would be unable to support the current version of Democrats’ Build Back Better agenda. White House press secretary Jen Psaki publicly called Manchin’s credibility into question a few hours later, saying in a statement that his comments “are at odds with his discussions this week with the President, with White House staff, and with his own public utterances.” On Monday, Manchin responded by accusing the White House staff of poisoning the negotiations.
A spokesperson for Manchin declined to comment.
At Monday’s press briefing, Psaki declined to discuss the details of Manchin’s counteroffer or any recent conversations between Manchin and the White House, but she reiterated the president is committed to getting a deal done.
“He’s worked with Senator Manchin over the course of decades,” she said. “They share fundamental values. They’re longtime friends. That has not changed. And what’s most on the president’s mind is the risk of inaction. And if we do not act to get this legislation done and the components in it, not only will costs and prices go up for the American people but also we will see a trajectory in economic growth that is not where we want it to be.”
The breakdown of negotiations threatens to seriously damage Biden’s presidency and deprive Democrats of what they have characterized as a once-in-a-generation opportunity to combat climate change and remake the U.S. economy. But there are signs that talks could continue.
Manchin and Biden spoke Sunday night in a call that was described as cordial and one that signaled they would resume work on a new bill early in the new year, according to people who spoke on the condition of anonymity to reveal the private conversation.
Common ground remains. While the precise details of Manchin’s offer remain unclear, it adheres to his repeated demand that Democrats fund its economic programs for 10 years — rather than reducing their top-line cost by funding them for only a few years, people familiar with the matter said.
“The fight for Build Back Better is too important to give up,” Psaki said in her Sunday statement. “We will find a way to move forward next year.”
Manchin’s counteroffer, for instance, included funding universal pre-K for 10 years, rather than partially financing the measure for a few years. Manchin has long been public about his support for prekindergarten education.
On climate change, Manchin backed supporting a scaled-back version of what Democrats had sought — with spending between $500 billion and $600 billion.
Despite Manchin’s support for hundreds of billions in climate-related spending, these negotiations could still prove fraught. Manchin continues to have major disagreements about the substance of the new climate policies pushed by Democrats. Manchin reiterated some of these concerns in his statement Sunday, arguing the bill could increase U.S. dependence on foreign supply chains by transitioning the United States off fossil fuels too quickly. On Monday, he also reiterated concerns that the bill would subsidize electric cars for too many affluent families. Meanwhile, many experts have expressed alarm about the pace of climate change and called for more dramatic and immediate action.
Manchin’s offer also included extending the Affordable Care Act expansion approved by Democrats earlier this year — a health-care measure that has been a top priority of House Speaker Nancy Pelosi (D-Calif.). The full scope of Manchin’s plan was not clear, and it remains possible it included other elements of Biden’s proposals.
Despite these potential areas of compromise, Manchin’s rejection of the expanded child tax credit would represent an extraordinarily difficult condition for the administration to support.
The White House has repeatedly argued that its one-year expansion of the existing expanded child benefit, approved by Democrats in March as part of Biden’s stimulus, has dramatically reduced child poverty and improved the well-being of millions of poor families. If that program expires at the end of this month — as it now appears likely to do — then child poverty could move higher in 2022 in the months before the midterm elections.
“I would say that the president, of course, wants to extend the child tax credit,” Psaki said Monday. “That’s something he has spoken to. We know that it was a significant contributor to cutting in half the child poverty rate. I’m obviously not going to negotiate from here, but, you know, he doesn’t think ‘compromise’ is a dirty word, either.”
In her statement Sunday, Psaki said Manchin’s offer to the White House was of the “same size and scope as the President’s framework” that the administration released in October. “While that framework was missing key priorities,” she said, “we believed it could lead to a compromise acceptable to all.” Psaki’s statement then called on Manchin to defend the potential termination of the child tax credit.
“Maybe Senator Manchin can explain to the millions of children who have been lifted out of poverty, in part due to the Child Tax Credit, why he wants to end a program that is helping achieve this milestone,” Psaki said.