The Archive

DEMOCRATS

Reconciliation outlook shifts as election looms

There’s lots of buzz about a possible reconciliation deal between Senate Majority Leader Chuck Schumer and Sen. Joe Manchin (D-W.Va.). Discussions are ongoing, although there’s no deal yet, and there won’t be one this week.

What’s in a potential Democratic reconciliation package – and when it could come together – are enormously important. And of course, none of this is decided yet

Yet we want to note this as well – we’re not entirely sure the reconciliation package being discussed on the Senate side could pass the House. Provided it gets through the Senate in the first place.

Ever since Manchin put the kibosh on the $1.5 trillion Build Back Better Act in mid-December, the assumption has been that if there’s a deal in the Senate, it can move through the House.

But that was six months ago, and internal House Democratic Caucus politics aren’t static. Democrats look increasingly likely to lose the House And there have been more retirements, with a race to succeed Nancy Pelosi and the current leadership team – if they leave – happening just below the surface.

The package being discussed by many in the Senate and downtown – full or partial repeal of the 2017 Trump tax cuts, Medicare prescription drug price negotiations and a climate-enegy package, with a portion of the revenue raised going to pay down the deficit – would have problems passing the House, even if it got through the Senate.

Remember, House Democrats will only have a four-seat margin if and when this reconciliation package comes up for a vote there. Frontliners and moderates – already very nervous about November, with good reason – want SALT and other provisions that may not be in there. They have some retiring members who could be a problem. This isn’t an easy vote for anyone.

We’re already hearing Democratic leaders and supporters of a reconciliation package argue that such legislation could stave off a possible recession, which is a slight change in focus. The argument had previously been that a reconciliation package would help boost U.S. economic growth coming out of the pandemic while also fighting inflation. Former Treasury Secretary Larry Summers mentioned this new angle on “Meet The Press” this Sunday. Summers noted his “best guess is that a recession is ahead.” Summers was out front in warning about the resurgence of inflation as the United States and global economy began to emerge from the pandemic, so he gets props from many in Washington.

Summers called for “some kind of bipartisan budget bill with three elements”: Medicare prescription drug pricing, “the partial repeal, not the full repeal, but the partial repeal of the Trump tax cuts,” and “an all-in more energy supply approach” that includes more fossil fuels in short run, then a government-led shift to renewables.

Now there’ll never be a bipartisan bill to repeal the Trump tax cuts. Never gonna happen. There probably can’t be a bipartisan deal on Medicare prescription drug pricing either. Republicans would do an energy deal, but that won’t be enough for Democrats or the White House. So a bipartisan deal is probably out.

Democrats will have to make a choice on going it alone. But here’s one thought we had – it’s going to be quite tricky for Democrats to find a winning message about why they’re raising taxes with a recession looming. Any moderate or Frontliner would get hammered on it. Republicans are already doing it.

Democrats could go another route. For instance, they could push a narrow bill focused on Medicare prescription drug pricing and extending Obamacare premium support, which expires this fall, right before the election. Up to 13 million Americans could be hit. Manchin hasn’t said where he is on the issue. Yet even with billions of dollars going into ACA subsidies, there would still be an overall savings to the federal government due to the Medicare prescription drug provisions. It may not be enough, however.

Yet just over four months from Election Day, Democrats – especially President Joe Biden – need accomplishments. If they can get a gun deal, pass the USICA package to help high-tech research and manufacturing, and possibly a smaller “Build Back Manchin” reconciliation package, that’s gotta help.

– John Bresnahan

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Who We’re Watching

– John Bresnahan and Heather Caygle

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What We’re Watching

House Oversight will hear from Deborah Birx, the Covid coordinator for the Trump administration. The House Agriculture Committee will hold a hearing on the future of digital asset regulation.

– Heather Caygle and Jake Sherman

THE CAMPAIGN

Barnes, who started the campaign as the leading candidate, has seen his support decrease in recent public polls.

Here’s Porter’s statement endorsing Barnes:

Porter, first elected to the House in 2018, serves as deputy chair of the Congressional Progressive Caucus and is a fundraising juggernaut.

Barnes’ main competitors in the Aug. 9 Wisconsin primary are Milwaukee Bucks EVP Alex Lasry and Wisconsin State Treasurer Sarah Godlewski.

— Max Cohen and Jake Sherman

MOMENTS

8:15 p.m.: President Joe Biden and First Lady Jill Biden will depart Rehoboth Beach, Del.

9:10 p.m.: The Bidens will arrive at the White House.

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