Once expected to “save America,” Biden’s $1.7 trillion bill is now in danger of falling apart because of a Democratic senator’s disapproval.
Democratic Senator Joe Manchin announced on December 19 that he did not support the $1.7 trillion Rebuild Better environmental and social welfare bill proposed by US President Joe Biden, due to concerns about it. will exacerbate the inflation that is already causing headaches for the US government.
“My Democratic colleagues in Washington are determined to reshape our entire society in a way that makes the country even more vulnerable to current threats,” Manchin wrote on Twitter. , and vowed to vote against the bill in the Senate.
The Rebuild Better Bill was passed by the US House of Representatives on November 19. This is a key plan in the action plan of the first year of US President Joe Biden’s term of office, which is expected to help “rescue America” with the goal of spending $ 1.7 trillion on many items of social security and fighting climate change. climate change, while preventing super-profit corporations from evading taxes.
However, the bill needs to be approved by the Senate before it can be presented to President Biden for signature into law. To achieve this, all 50 Democratic senators had to vote in favor, because 50 Republican senators announced they would oppose.
When the Senate vote is 50-50, the bill will be passed by a decisive vote of Vice President Kamala Harris, who holds the position of Senate President. As long as Manchin votes against it, the bill will die prematurely in the Senate.
Over the past several months, Manchin has warned Biden and congressional leaders that he is not satisfied with the size of the social spending package, with an initial proposed value of $3.5 trillion. In addition to inflation risks, Manchin is also concerned about a widening federal budget deficit, because some programs that are expected to end in a few years are likely to last forever.
Over the past week, Manchin stressed that the bill must be scaled back and, importantly, must not use budget tricks to deliberately downplay the bill’s actual impact on the budget deficit. The senator said on December 19 that Democrats “continue to fabricate the true cost of the target behind the bill.”
White House officials have tried to promote the view that the bill would provide immediate relief from inflationary pressures, something economists disagree with. However, there is little evidence that the bill poses the risk of skyrocketing prices of food, gasoline and other commodities as Manchin fears.
The reason comes from the speed of spending of the bill and the amount of money raised from tax increases to contribute to this budget package. The bill outlines a $1.7 trillion spending plan over 10 years, while taxing wealthy American billionaires and businesses to pull money out of the economy, combating spending increases and tax cuts.
The Rebuild Better Bill doesn’t stimulate demand as directly as the $1.9 trillion Covid-19 support package that Biden approved in March and backed by Manchin. In addition to some provisions that give money directly to people, such as continuing to expand the child tax credit, others will go to programs that take a long time to promote.
Economists estimate the bill is likely to have a maximum inflation rate of 2%. This level of impact is expected to be relatively small, as supply chains crack, soaring global oil demand and the pandemic make consumers no longer plan to travel or go to restaurants to dine. A combination of these factors has driven annual inflation in the US to 6.8%, the fastest pace in nearly 40 years.
White House advisers have been trying to convince Manchin as well as the American public in recent weeks, pointing to a series of analyzes that dismiss inflation concerns. With US voters disgruntled with Biden because of soaring prices and the resurgence of Covid-19, Manchin’s views seem to anger Democrats. The White House team, who had spent weeks narrowing the bill to please Manchin, felt betrayed.
Republicans, meanwhile, cheered, pointing to Manchin’s statement against Manchin’s Rebuild Better bill as proof that the plan contains policies so inflationary that even members of the party Democracy cannot support either.
However, Democrats are said to still be able to save the bill, although not the option Biden wants. Some Democrats and administration officials think they can revise the bill to match Manchin’s requirements, opening the door for the bill to pass in the early months of next year. This option is expected to reduce the size of the bill further, reducing the number of programs in the plan.
This change will force the White House to once again make tough choices, considering which goals need to be prioritized to stay. Democratic leaders have essentially two options. They could focus on a few programs, like tax credits to combat climate change, or expanding benefits to at-risk parents who have trouble raising children.
The second option is to put in the bill as many programs as possible and set a short implementation period, like a year, to avoid increasing the budget deficit, and then raise the hope that MPs will extend them in the future. future. Democrats seem to choose this approach, in part because too many interest groups within the party, such as environmentalists or trade unions, lead to conflicts over policy priorities.
Meanwhile, conservatives on the budget call for a more targeted approach, which means reducing the number of programs that last forever to avoid budget deficits. Manchin is perhaps the Democrat who has pursued this view most vehemently.
Republicans appeared to deepen Manchin’s concerns by asking the Congressional Budget Office to analyze a hypothetical bill in which every program proposed by Democrats would last forever. The results show that the US budget deficit has skyrocketed.
White House officials vehemently rejected this prediction, stressing that President Biden would not renew any programs without seeking to offset the revenue. However, Manchin did not seem to be moved.
Luster (Follow NY Times)