Manchin appears to sink Biden agenda on climate and tax reform

Sen. Joe Manchin appears to have torpedoed a cornerstone of President Joe Biden's economic agenda, telling Senate Democratic Leader Chuck Schumer Thursday evening that he won't support moving forward on proposed tax hikes on wealthy Americans and corporations that would pay for a package of climate change and energy policies, at least not right away, this according to two aides familiar with the matter.

Democrats were hopeful they could move on a slimmed-down version of the once-sweeping social and economic spending agenda, formerly known as Build Back Better, before they depart for a month-long August recess.

Manchin had agreed to allow Medicare to negotiate prescription drug prices, potentially saving the federal government $288 billion and bringing down costs for seniors, in addition to a two-year extension of pandemic-era premium subsidies for lower income Americans enrolled in Obamacare.

In a statement on Friday, issued while he was in Saudi Arabia, Biden urged the Senate to move forward on the slimmed down set of proposals that Manchin endorses, even if climate proposals have to be left on the cutting room floor.

"After decades of fierce opposition from powerful special interests, Democrats have come together, beaten back the pharmaceutical industry and are prepared to give Medicare the power to negotiate lower drug prices and to prevent an increase in health insurance premiums for millions of families with coverage under the Affordable Care Act," Biden said. "Families all over the nation will sleep easier if Congress takes this action. The Senate should move forward, pass it before the August recess, and get it to my desk so I can sign it. This will not only lower the cost of prescription drugs and health care for families, it will reduce the deficit and help fight inflation."

Biden promised executive action to account for climate provisions that won't pass Congress.

"So let me be clear: if the Senate will not move to tackle the climate crisis and strengthen our domestic clean energy industry, I will take strong executive action to meet this moment. My actions will create jobs, improve our energy security, bolster domestic manufacturing and supply chains, protect us from oil and gas price hikes in the future, and address climate change," Biden said. "I will not back down: the opportunity to create jobs and build a clean energy future is too important to relent."

Manchin, a West Virginia Democrat who has for months warned of deep concerns about record-high inflation and the effects of more federal spending, effectively shelved tax and climate change reforms from a Senate bill until he sees data on July inflation rates due out early next month.

"Until we see the July inflation figures, until we see the July ... Federal Reserve rates, interest rates, then let's wait until that comes out so we know that we're going down a path that won't be inflammatory to add more to inflation," Manchin said Friday during a radio interview with West Virginia radio host Hoppy Kercheval. "I am where I have been."

The Consumer Price Index showed prices 9.1 percent higher in June compared to a year ago -- worse than expectations and the largest yearly increase since November 1981, a new four-decade high.

"We have an opportunity to address the climate crisis right now," Sen. Martin Heinrich, a Democrat on the Senate Energy and Natural Resources committee, which Manchin chairs, tweeted Friday. "Senator Manchin's refusal to act is infuriating. It makes me question why he's chair of ENR."

"It's infuriating and nothing short of tragic that Senator Manchin is walking away, again, from taking essential action on climate and clean energy. The world is literally burning up while he joins every single Republican to stop strong action," Sen. Tina Smith, D-Minn., said in a statement.

One progressive group said in a statement Thursday night that the move by Manchin was akin to a political "death sentence."

"This is nothing short of a death sentence. Our democracy is broken when one man who profits from the fossil fuel industry can defy the 81 million Americans who voted for Democrats to stop the climate crisis. It's clear appealing to corporate obstructionists doesn't work, and it will cost us a generation of voters," said Sunrise Movement Executive Director Varshini Prakash.

Democrats are running out of time and know that after the monthlong August recess they must return with a focus on funding the government by Oct. 1, nearly always a fraught process.

Also, with health care premiums in many states set in August, and with pandemic era ACA subsidies set to expire by year's end, Democrats could be facing angry voters if health care costs skyrocket -- amid already high inflation -- ahead of the midterm elections where control of Congress is at stake.

Democratic leaders hoped to pass their proposals using a fast-track budget procedure that requires only a simple majority of senators to pass. This tool is only available for Democrats to use until Sept. 30, the end of the fiscal year, and with Manchin's vote in the 50-50 Senate necessary to move forward with any measure, his delays are running out the clock.

Democratic leaders must now choose whether to try to further pressure Manchin or to push through the only remaining health care-related provisions of their plan that the West Virginian has blessed.

One influential progressive told reporters this week that maybe half a loaf should be celebrated.

"There is so much we need to do, but we do as much as we can get 50 votes for, and I will celebrate what we can get done and work harder than ever for the part that are still not done," said Sen. Elizabeth Warren, D-Mass.