The West Virginia centrist spent months with Chuck Schumer shaping the Democratic party’s line agenda. In the final hours, he had to agree to several of his Arizona colleague’s demands.
For months, Joe Manchin was the Democrat with all the clout. In the end, even he had to give up some ground.
After Manchin agreed with Senate Majority Leader Chuck Schumer on the party-line tax, health care and energy bill, the West Virginia Democrat found himself negotiating with fellow moderate Sen. Kyrsten Synema. Both tough negotiators, the Arizona Democrat’s business-friendly tax approach clashed sharply with Manchin’s more progressive positions on taxes.
Manchin sought to target the wealthy and ended up agreeing with Schumer to attack the so-called accrued interest loophole that allows some people to pay lower tax rates on investment income. He also signed a corporate minimum tax package that most Democrats believed Sinema supported.
Ultimately, Sinema took a scalpel to the corporate minimum tax and scuppered any change in accrued interest, which Manchin called particularly “painful.” Triangulating between them throughout Schumer, whose job it was to harmonize the views of the very public Manchin with an often-silent Sinema.
“We argue with each other about problems, but we try to respect each other,” Schumer said of Manchin Sunday as he munched on a celebratory meal of leftover pasta cooked by his wife. “Sinema, if he gives you his word, you have it. But she is not a charlatan like Manchin.”
Almost exactly a year after Manchin and Sinema joined Republicans in passing a landmark infrastructure bill, the two moderates on Sunday cast swing votes for the second piece of the Democrats’ puzzle. It was much smaller than the party’s original vision of $3.5 trillion but larger than the limited health care legislation lawmakers were considering just two weeks ago. It is likely to be the last major party-line bill Democrats will be able to introduce in years, with the House expected to switch to Republicans in the November election.
The package delivered more than $300 billion in climate and energy investments, reformed prescription drug prices, and created a new minimum tax for large corporations. The passage of the legislation on Sunday marked a triumphant moment for a party that for years has spoken volumes about lowering drug prices and fighting climate change.
US Senate Majority Leader Senator Chuck Schumer speaks during a press conference following a weekly Senate Democratic Policy Luncheon at the US Capitol on July 20, 2019. 2021. | Alex Wong/Getty Images)
The year-long drama showcased the daily struggles Schumer faces running a 50-50 Senate, cornering a caucus that includes 47 other senators with their own ideas plus Sinema and Manchin, two centrist senators with divergent priorities.
Twice on the Senate floor, Manchin had animated discussions with Sinema about his deal, including parts of the tax legislation that Sinema felt would hamper economic growth in Arizona. Manchin observed of his relationship with Sinema and the tax dispute: “We have more in common than we don’t. I only have a difference in this.”
“Both are neck pains, but neck pains that I respect,” Sen. John Hickenlooper (D-Colo.) said admiringly. “I don’t feel like I’ve ever been misled or said anything that isn’t true.”
Manchin killed the $1.7 trillion Build Back Better bill in December after failed negotiations with President Joe Biden. Two months later, Schumer and Manchin broke bread and Manchin handed over his negotiating position: he wanted to wait until April before trying again. And when they did, he just wanted to talk to Schumer.
After Russia invaded Ukraine and Europe’s energy supplies dwindled while US gasoline prices began to rise, Manchin saw an opportunity to make big investments in climate change while increasing production. of fossil fuels this spring.
“That’s the catapult that basically launched me,” Manchin said in an interview. “Iran is the largest proliferator of support for terrorism in the world, right? And are we going to give them money? Over my dead body.”
“Iran is the largest proliferator of support for terrorism in the world, right? And are we going to give them money? Over my dead body.”
Senator Joe Manchin (D-W.Va.)
In late June, he and Schumer were reviewing a package that generated more than $1 trillion in revenue and spent significantly more than the package approved Sunday. The Sinema team was generally aware of that package, telling leaders in mid-July that it still did not support the accrued interest provision.
But Manchin began to have second thoughts after the July 4 recess, as inflation gauges continued to flash red. He then came on July 14.
“I just said, ‘Chuck, I can’t do that.’ … That’s when he got mad,” Manchin said. “Half an hour later, they put the dogs on me.”
Manchin says he never took it personally, but there are two schools of thought in the Democratic caucus on whether that pressure campaign worked. Some argue that attacks on Manchin by his own colleagues brought him back to the table. Others say that a cohort of Democratic senators who quietly reassured Manchin amid the backlash proved much more effective.
After that outburst, Democrats rallied around prescription drug reform and a brief extension of the Affordable Care Act subsidies, relegating energy, climate change, and taxes to the landfill. Manchin quietly resumed his talks with Schumer just four days later. When they announced their agreement on July 27, the Democratic Caucus was victorious.
There was a problem: Sinema was now in the dark.
In fact, Sinema was briefed on the deal by No. 2 Republican John Thune on the Senate floor. He had a major influence on the Build Back Better bill, eliminating tax rate increases to put together a more palatable tax package for his business-friendly state. And she and Sen. Chris Murphy (D-Conn.) laid the groundwork last year for what would become a key part of the Democrats’ prescription drug bill.
But Sinema never agreed with the provision of accrued interest. And she had other objections.
Senator Joe Manchin speaks to reporters on Capitol Hill in Washington on August 1, 2022. | Photo by J. Scott Applewhite/AP
While Manchin and Sinema had their own conversations, Hickenlooper and Sen. Mark Warner (D-Va.) helped them out. While Warner tried to compromise on accrued interest with Sinema, Hickenlooper suggested a special share repurchase tax to offset Sinema’s requested changes to the corporate minimum tax.
“There’s been a kind of trust-building relationship,” Warner said. “It became clear that some of the changes Senator Sinema wanted were creating some holes.”
On August 4, Warner joined Manchin on his houseboat to discuss Sinema’s soon-to-announce tax deal. After getting soaked in a storm, Warner left in a new outfit, with a pair of shorts and a Manchin t-shirt, and hoping that Manchin, Sinema, and Schumer would agree. (On Saturday, Manchin returned Warner’s suit, fully pressed.)
But Sinema wasn’t done yet, even after rushed language limiting the ability of companies to write off some investments. When Democrats unveiled the final legislation on Saturday, they imposed the minimum 15 percent tax on some privately owned businesses. That had been included in earlier versions of the legislation but was omitted from the initial draft of the Manchin agreement.
Manchin said that once he agreed with Schumer, the two were “hooked up to the waist” to prevent changes to the bill that could jeopardize its passage, which Schumer said was a “key piece” of the deal. . Sinema had no such agreement, and when the legislation came to the floor for amendment votes, she privately teamed up with Thune to reverse the tax change.
That required Manchin and the rest of the Democrats to make another compromise. Schumer went around the Senate floor telling his members that, even if they don’t like it, they had to eat the change to pass the bill.
Schumer members were unhappy, according to a Senate Democrat, but they were exhausted and resigned to doing whatever it took to finish the bill. Warner stepped in with a way to fill that revenue hole as well. About 15 minutes later, the bill was approved after 22 hours on the Senate floor.
For Schumer, it was the cornerstone of a 50-50 Senate in which he passed new laws on gun safety, infrastructure, veterans’ health benefits, and microchip manufacturing. For Sinema, the moment proved that he just isn’t on the same level as Manchin, or the rest of his crew.
And for Manchin, the legislation turned his reputation from the guy who stopped Biden’s agenda in its tracks to the senator from the coal state who not only struck a climate deal but helped sell it any way he could.
“I’ve never seen more balanced legislation come together,” Manchin said. “We never knew this day would come.”
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