Manchin throws Biden a lifeline
Less than two weeks ago, Joe Manchin told a West Virginia radio host that he couldn’t even contemplate a deal on a reconciliation package until he had seen July’s inflation numbers (which are published in mid-August). Now, to the genuine surprise of most of Washington, the Democrats have unveiled a package of tax hikes and spending on energy, climate change and healthcare. It even has a shiny new name: America, meet the Inflation Reduction Act of 2022.
The package is light on proposals that would actually live up to that name, but it does at least have the advantage of containing no immediate deficit increases and would reduce deficits by more than $300 billion over a decade. In other words, even if you would rather this Senate passed no new spending bills at all, this legislation is a big improvement on the gargantuan package the president and most of his Democratic colleagues wanted to pass last year. That proposal initially came with a price tag of $3.5 trillion. This bill contains $485 billion in additional spending.
On energy and climate change, Manchin has exacted considerable concessions. Yes, there are the same old green subsidies, but the renewable energy tax credit has been cut by 80 percent and extended to nuclear power plants. According to the legislation, solar and wind can only be developed on federal land if the government has issued oil and gas leases. Manchin also claims to have secured a guarantee of legislation that would allow new energy infrastructure, including natural gas pipelines such as the Mountain Valley Pipeline, which would transport gas from Manchin’s home state of West Virginia to Virginia.
Whatever the strengths and weaknesses of the legislation, this bill is, politically speaking, two things at once: a badly needed political win for the president and a reminder of just how much lower expectations for this administration are today versus a year ago.
First, though, the Democrats need to make sure the bill has the support for fifty senators. Sinema is yet to say anything about the bill and how she will vote on it. Meanwhile, the absence of SALT reform from the legislation makes it unclear whether some northeastern Democratic lawmakers will back the bill. During last year’s Build Back Better negotiations, the likes of New Jersey’s Josh Gottheimer said that SALT reform was a red line. Will they stick to their “No SALT, no deal” mantra?
Assuming those hurdles are cleared and the Inflation Reduction Act is passed, Biden should not expect a massive political dividend. The same day Manchin and Schumer unveiled their deal, the United States registered two consecutive quarters of negative GDP growth. The day before, the Federal Reserve raised rates by 0.75 percent for the second consecutive month, a reminder that a lot of the inflation-fighting pain is yet to be felt. With the economy shrinking and wages falling in real terms, Americans are getting poorer. And just as a few green subsidies aren’t going to solve climate change, a bill with the word “inflation” in the title isn’t going to change that fact.
*** Sign up to receive the DC Diary in your inbox on weekdays ***
Alito takes aim at Boris
Supreme Court Justice Samuel Alito seemed to be enjoying himself at a recent conference on religious liberty in Rome organized by the University of Notre Dame. His speech on July 21, video of which was published yesterday, were the first public remarks from Alito since the publication of his lead judgment in Dobbs.
“I had the honor this term of writing I think the only Supreme Court decision in the history of that institution that has been lambasted by a whole string of foreign leaders who felt perfectly fine commenting on American law,” said Alito, before joking that “one of them was Boris Johnson, but he paid the price.”
Alito went on to poke fun at another Brit: “But what really wounded me — what really wounded me — was when the Duke of Sussex addressed the United Nations and seemed to compare the decision whose name may not be spoken with the Russian attack on Ukraine.”
Dems winning on the Hill, GOP wins at Nats Park
With the Manchin seal-of-approval on reconciliation, the passage of the CHIPS bill in the House and even surprise news of a possible deal on the policing and public safety bills that I wrote about in Wednesday’s diary, Democrats have had a productive week on the Hill. The same could not be said about their performance in the congressional baseball game at Nationals Park last night. Climate protesters had planned to shut down the whole event. They were arrested at the gates, and the GOP shutout the Democrats 10-0. Relief pitcher and Texas congressman August Pfluger was named MVP. The standout performance on the Democratic side came from Linda Sanchez. She may not have scored a run, but she did give the Republican bench the middle finger as she jogged back to the dugout.
What you should be reading today
Jonathan Bydlak: Are we in a recession? Does it matter?
Peter Van Buren: Nancy Pelosi’s trip to Taiwan is about politics not diplomacy
Adam Lammon: Iran steps up to the nuclear line
Washington Free Beacon: DC think tanks learn hard lessons about Koch funding
James Stavridis, Bloomberg Opinion: Biden’s unlikely gang of four takes aim at China
Ruy Teixeira, the Liberal Patriot: Could inclusive populism solve the Democrats’ working class voter problem?
Poll watch
President Biden job approval
Approve: 38.2 percent
Disapprove: 56.3 percent
Net approval: -18.1 (RCP Average)
Pennsylvania Senate primary
John Fetterman (D): 47 percent
Mehmet Oz (R): 36 percent (Fox News)
