How Joe Manchin decided a new spending plan would reduce inflation and the national debt

  • Senator Manchin and Democratic Majority Leader Chuck Schumer have reached a compromise on Biden’s Build Back Better program.
  • Several senators and former Treasury Secretary Larry Summers were instrumental in changing Manchin’s mind.
  • They eventually convinced Manchin that the agenda would reduce inflation rather than increase it.

With Sen. Joe Manchin announcing that he has reached an agreement on President Joe Biden’s proposal on climate, health and tax programs, it looks like Democrats may finally be embracing part of the House’s economic agenda. White.

After killing off Build Back Better in January, it appears the centrist Democratic senator from West Virginia had a few pivotal conversations that convinced him that his biggest fears — rising national debt and worsening inflation — would be in actually appeased by a version of the economic program that he once torpedoed.

“Rather than risk more inflation with trillions in new spending, this bill will reduce the inflation taxes Americans pay, reduce the cost of health insurance and prescription drugs, and ensure that our country is investing in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination,” the most conservative Democrat in the Senate said in a statement Thursday.

Conversations with other senators and former Treasury Secretary Larry Summers eventually assuaged Manchin’s inflation fears and convinced him to support a slimmed down version of the bill, CNN’s Kevin Liptak, Manu Raju, Ella Nilsen and Alex Rogers. reported.

The new version of the bill will extend financial assistance for people seeking health insurance through the Affordable Care Act by three years and allow Medicare to begin negotiating cheaper prescription drug prices. It also includes $370 billion for climate and energy programs and $300 billion to reduce the federal deficit.

It’s a much slimmer version of the proposal Manchin vetoed – being the vote to clear the threshold in the Senate as part of the procedural scheme Democrats are trying to use to circumvent a Republican filibuster in the chamber as well. split — which also included provisions for affordable, pre-universal-K child care, and the return of a monthly check program for parents.

“This bill fights inflation and it also has a whole set of collateral benefits”

Summers has been vocal about inflation increasing the likelihood of a recession for a year now, and he also reached out to Manchin to express his concerns, according to CNN. He told Manchin the deal would help cool rising prices, rather than aggravate inflation problems.

He declined to comment to CNN on his conversations with Manchin, but offered more reassurance about the bill’s potential to fight inflation.

“This bill fights inflation and it also has a whole set of collateral benefits,” he said.

Several members of the Senate also played key roles in Manchin’s acceptance of a new bill, including Senator John Hickenlooper.

Hickenlooper told reporters his team had commissioned an analysis of the tax and climate deal from economists at the University of Pennsylvania’s Wharton School of Business to confirm deflationary benefits for Manchin.

Manchin “trusts Wharton, that he had used this for modeling before,” Hickenlooper said. “So we asked them to model that. We did that and got a model that said it was in no way inflationary, and we sent it to Joe.”

Senators Tina Smith, Brian Schatz and Chris Coons made similar arguments to Manchin, according to Hickenlooper.

“I would listen to every single thing that Joe said he had a problem with, and try to fix it,” Hickenlooper said. “When he told me the problem was inflation, and the rest he could tackle, I took him at his word.”

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John A. Bogar