Manchin says Build Back Better is 'dead.' Priority is to 'fix the tax code.'

WASHINGTON — Every morning at about 8:30, Sen. Joe Manchin receives a text message from a staffer informing him what the national debt is. He replies quickly: “Thanks.”

On Wednesday, it crossed $30 trillion for the first time.

That mundane ritual offers a clue to how President Joe Biden might win back Manchin, the pivotal centrist Democrat from West Virginia, on his climate change and social spending ambitions, which have been frozen since Manchin rejected the House’s Build Back Better Act.

In an interview Wednesday, Manchin said his priority is to “fix the tax code” — and he’s willing to bypass Republicans and use the filibuster-proof reconciliation process to do it.

“It's the reason we have reconciliation. And everyone's talking about everything but that,” he said. “Take care of the debt. $30 trillion should scare the bejesus out of your generation.”

Manchin once again said this week that the Build Back Better Act is “dead,” referring to the $2 trillion-plus bill that passed the House. A nonnegotiable red line for him is that all new programs must be permanent and fully financed.

But even as he says there are no “formal talks” going on about a sequel, he keeps dropping hints about which policies might be worthy pursuits in some hypothetical future bill, perhaps one with a different name.

Clean energy? “We believe that basically, yes, we can do something,” Manchin told reporters, even as he stressed the need to maintain enough fossil fuels for “reliability.” More subsidies for the Affordable Care Act? “Anything that helps working people be able to buy insurance that's affordable, I've always been supportive of,” he told NBC News. Extending coverage in states that limit Medicaid? “I've been very receptive on Medicaid expansion to the states that got left behind,” as long as there's an incentive to expand, he said.

New bill, new name?

Democrats are listening. Discussions about Biden’s agenda inside and outside Washington are increasingly games of Manchinology, in which policymakers pore over his every pronouncement and look for a new package that succeeds where Build Back Better failed.

“That old name needs to go in the trash can,” said Sen. Brian Schatz, D-Hawaii. “I'm not very good at naming things or slogans, but Joe Manchin has been pretty clear he's not voting for Build Back Better. So we need to work on something else.”

Democrats have already begun to discuss putting some revenues and savings in a new bill toward deficit reduction to attract his support, according to Senate sources.

“That’s music to my ears,” Manchin said. “Deficit reduction, inflation, being fiscally responsible — sounds like something we should be talking about!”

Manchin said he would support a corporate tax rate hike to 25 percent, a 15 percent corporate minimum tax, a 28 percent capital gains tax “all in,” an elimination of “tax loopholes such as carried interest” and higher rates for the wealthy.

“High-income earners — they should be paying their fair share,” he said. “And there should be a way to do it that’s fair and equitable.”

Some of his tax ideas could crash into objections from centrist Sen. Kyrsten Sinema, D-Ariz., another difficult vote to lock down, who has told party leaders she won't support rate hikes.

'Give him the pen'

Other Democratic tax priorities may have to go. A memo this week from Patrick Gaspard, the CEO of the Center for American Progress Action Fund, warned Democrats that “we cannot allow ourselves to get distracted by things” that can’t pass, and it named a number of promising pieces “based on votes and public statements.”

It didn't mention Manchin, but the implication was clear from the list: Ideas that he had praised, like universal pre-K, child care, home care, prescription drug reform and climate action, were on it. Ideas he’d expressed less interest in, like housing and expanded child tax credit payments, weren't.

Others still hope to salvage the child tax credit by once again following Manchin’s trail of breadcrumbs to a deal. He has told reporters that any expanded child tax credit should include a work requirement, and he floated an income limit (“$75,000 or less”) in an interview with a West Virginia radio station last week.

Sen. Ron Wyden, D-Ore., the chair of the Finance Committee, said he was “trying to meet [Manchin] where he is” with proposals that are fully funded and align with his goals.

“I don't talk about my conversations with him, but I think on permanence, on inflation, fixing the 2017 tax bill, prescription drugs, climate — these are all areas where members have done a lot of work, there's a lot of common ground,” Wyden said in an interview.

Plenty of Democrats would prefer that Manchin just write his own desired bill rather than turn the House and the Senate into teams of movie detectives trying to solve coded riddles left behind by a mysterious killer.

Rep. Ro Khanna, D-Calif., has urged the party to “give him the pen” and then pass whatever parts of Build Back Better that Manchin is willing to back, with climate as the top priority. But so far Manchin isn't eager to make the first move.

Manchin's skeptics

Even as a small army of Democrats, activists and lobbyists pick over Manchin’s words for hints of a deal, there’s considerable skepticism within the ranks about whether placating him will work. Some Democratic aides worry that Manchin is stringing them along and fear that he’ll come up with new demands if they meet his existing ones. There’s also apprehension about when he’d be willing to vote.

Any pared-back version would need the support of progressives, some of whom feel burned by Manchin's opposition to the current bill after much of it was cut to placate him.

Sen. Bernie Sanders, I-Vt. has sounded particularly impatient and called for votes on some or all of the original bill to force a public debate over its policies.

"It is an absolute outrage that we're not passing it,” Sanders said. “The best way to pass it, eventually, is to bring votes to the floor and force people to take votes on behalf of the American people. If they choose to vote against their constituents, fine. But let's have those votes.”

Manchin has made no guarantees he would vote for a bill, including offers he has made in the past, and he is leaving plenty of outs even if Democrats match his latest demands. He has said the Senate has other priorities to focus on and that he typically prefers bipartisan committee processes for legislation rather than filibuster-proof bills. But it's unlikely Democrats could pass any major Build Back Better features with Republican support.

Republicans don’t sound too concerned about Manchin’s flipping.

“I think it's a futile effort,” said Sen. John Cornyn of Texas. “They've been trying to do it for, basically, a year and failed. And I can't see them, all of a sudden, like a phoenix rising out of the ashes, Build Back Better comes back to life.”

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