Jan 2, 2022 - Politics & Policy

Scoop: Manchin returns to Build Back Better negotiations with demands

Sen. Joe Manchin is seen walking beside the Senate subway.
Sen. Joe Manchin walks alongside the Senate subway last month. Photo: Anna Moneymaker/Getty Images

Sen. Joe Manchin (D-W.Va.) is open to reengaging on the climate and child care provisions in President Biden's Build Back Better agenda if the White House removes the enhanced child tax credit from the $1.75 trillion package — or dramatically lowers the income caps for eligible families, people familiar with the matter tell Axios.

Why it matters: The holdback senator's engagement on specifics indicates negotiations between him and the White House could get back on track, even after Manchin declared he was a “no” on the package on Dec. 19.

  • The senator’s concerns with the size and the scope of the package remain.
  • His belief that it could cost more than $4 trillion over 10 years extends beyond the CTC issue, and he continues to tell colleagues he’s concerned about the inflationary effects of so much government spending, Axios is told.
  • The Bureau of Labor Statistics will release its next Consumer Price Index on Jan. 12. Last month's reading put inflation at 6.8% for the year — fueling Manchin's opposition.

The big picture: Manchin and top White House aides traded recriminations after their negotiations fell apart — but President Biden and the senator subsequently spoke by phone late in the evening of Dec. 19.

  • They agreed to continue to talk, and Manchin stayed in touch with senior White House officials over the holidays.
  • The week before Christmas, reports emerged about how close he and Biden were on a potential deal.
  • The details included a $1.8 trillion offer from Manchin that contained money for universal preschool and green tax credits but nothing for the child tax credit, which provides families up to $3,600 per child per year.
  • Families who make up to $400,000 had been receiving some CTC payments under the program that ended Jan. 1.

Between the lines: One possible solution to the stalemate would be to remove the CTC from the Build Back Better legislation, which the Senate plans to pass with only Democratic votes.

  • The chamber could then have a separate, focused debate during a midterm year about making the tax credits permanent.
  • Some Republicans, like Sen. Mitt Romney (R-Utah), are supportive of the CTC, but it’s unclear if Democrats could find all 10 Republicans needed to clear the 60-vote threshold for passing major legislation.
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