Manchin Describes Inflation Act Negotiations
Says He’s Adamant on Closing Carried Interest Loophole, Sinema Mum on Position
WASHINGTON — Sen. Joe Manchin, D-W.Va., on Thursday rejected assertions he somehow reversed course in coming to terms with Democratic leaders on a reconciliation package now called the Inflation Reduction Act.
“A reversal to me is going backwards, and I’ve never reversed anything in my life,” Manchin told reporters on a virtual conference call as he continues to recover from a bout with COVID-19.
And yet a day after the senator announced he reached a deal with Senate Democratic Leader Chuck Schumer, D-N.Y., on a bill they both claim will lower the national debt while addressing climate change and lowering health care costs, Capitol Hill continues to buzz.
It was only two weeks ago that Manchin appeared to dash the administration’s hopes of addressing climate change in a proposed “slimmed down” reconciliation bill that had been the subject of months of negotiation.
Manchin said he could agree to some of the proposed package’s provisions, namely those related to allowing the government to negotiate prescription drug costs and extend subsidies under the Affordable Care Act that are set to expire at the end of the year.
But when it came to climate, energy and a plan to raise taxes on wealthy Americans and corporations, he said the party wouldn’t have his vote.
What had happened to change his position remained largely a mystery Wednesday, after his statement and a fact sheet vaguely describing aspects of the deal were released.
And then there was this — the timing of the announcement.
Senate Republican Leader Mitch McConnell, R-Ky., has said for weeks that his conference would not allow the CHIPS bill to pass the chamber if Democrats tried to pass their climate and lower drug pricing bill.
But then, on Wednesday, the CHIPS bill did pass, only to be followed, just hours later, by the announcement of the Manchin-Schumer deal.
In the breathless moments that followed, some likened the move to Manchin and Schumer playing five-dimensional chess or “out-McConnelling McConnell.”
It wasn’t surprising then, when more than 82 reporters logged on Thursday morning after the senator’s office extended an invite to speak with him.
“There really should be no surprise here … I’ve never walked away from anything in my life,” Manchin said at the outset.
“I just felt there was a real opportunity to give us an energy policy with the security that we need for our nation, but also driving down prices, the high price of gasoline and driving down inflation. That was my number one goal,” he said. “And so that’s what we worked on.
“This is not a Democrat bill. This is not a Republican bill. This is an American bill. And [achieving that] was the driving force behind what we did and why we did it,” he added.
Manchin reiterated what he said two weeks ago when he explained he thought negotiations were moving in a positive direction through the spring, when suddenly they weren’t.
“How this all came to fruition is … no one in their right mind would want to go through the protests and harassment I went through after Build Back Better was defeated, but I thought that bill was just too much for America.
“With that though, I thought there were some things that needed to be done, so in about April I started having staff work out a feasible way for getting those things done,” he continued.
The problem, Manchin said, was that as many times as he said the original Build Back Better plan was dead, other “people kept trying to revive it.”
Manchin said despite their differences over the bill, his talks with the White House were “always amicable.”
“Then Sen. Schumer and myself started speaking, and I said, ‘Chuck, one thing we could do today, tomorrow or anytime if you want is passing the provision that would allow Medicare to negotiate prescription drug prices.’
“And I said, ‘If we can extend the provisions of the Affordable Care Act by a few years, we could do that too,’ but my main concern all along was inflation,” Manchin said.
“I was worried about inflation. I was worried it was harming [my constituents] in West Virginia … because I was hearing about it every day: the high price of gas, the high price of food, the high price of energy, the high price of everything we need,” he continued.
“So we get to the place where I thought we were moving in the right direction, and all of a sudden the inflation rate surges to 9.1%,” he said. “That was Thursday, two weeks ago, and I said, ‘Chuck, with these new inflation rates, I’m just not comfortable moving forward until we take a really good hard look at what’s going on.’
“I said, ‘Whatever we do, we can’t do anything that will inflame inflation and make it worse,’” he said.
By that night, the press was filled with stories on how and why Manchin killed all that remained of the Build Back Better plan’s climate and tax provisions.
“All hell broke loose,” Manchin said. “But again, I never walked away.”
Manchin said he and Schumer ran into each other the following Monday.
“I said, ‘Are you still upset?’ And he said, ‘I’m very discouraged.’
“And I said, ‘Well you shouldn’t be because something positive could be done if we all want to work rationally.’
“So we started in earnest, a couple of weeks ago, trying to see if there was a different approach we could take. And we did that,” Manchin said.
“We don’t raise taxes on anybody, and anybody that says we’re raising taxes by putting a minimum of 15% corporate tax on corporations is [simply mistaken],” he said.
“I don’t think any of us can figure out why, when we reduced the tax rate from 35% to 21% in 2017 … why people weren’t even paying at least 15%. If someone’s upset that we’re making them pay at least 15% now, they aren’t paying anything.
“And I would like them to please come forward and tell us why you were able to have this great country protect you and give you these opportunities and yet you don’t have to pay anything,” he said.
“We got rid of carried interest, which needed to be gotten rid of, because it only benefited the extremely wealthy … and then on top of that, we were able to get the IRS to do their job without harassing and going after [less affluent] people. With this bill we say, ‘Just do your job.’”
Manchin said as his talks with Schumer continued, he also came to like the shape of the new energy provisions.
“I think we now have a path to energy security, which you have to have, along with energy independence, if you want to be a superpower in the world. That’s what China does. And that’s what Russia has had. … And they are both nuclear adversaries of ours,” he said.
“Now we have an all of the above energy policy using everything we have to our best advantage today. If we don’t do that, God help us,” he said.
Asked whether he and Schumer “pulled a fast one” on Senate Republicans, Manchin said, “I sure hope they don’t feel that way, though I can understand if they do.
“They all knew that I was trying to find some way to pass some kind of bill. Our people have been working intensely on this and they wrote the contents of the two bills. … We worked with Schumer’s staff. They were very constructive. The White House was kept apprised of what was going on. Everybody had to give and take a little bit.
“And then on Monday, I tested positive for COVID and had to leave and things started moving forward a little differently,” he said.
Manchin was then asked whether he’d spoken to Sen. Kyrsten Sinema, D-Ariz., the other Democratic opponent of the original Build Back Better bill, and got her to sign on to the new version.
“I have not spoken to her about this,” Manchin said. “But with Kyrsten, I would hope that she would be receptive because one of her major concerns with the original version was that it would cause taxes to keep going up; there are no tax increases in this bill, just an insistence that corporations pay the 15% minimum. I don’t know how anyone could be opposed to that.
“And as for the prescription drug negotiation piece, this is based on things she had worked out, and I was very receptive to that. The only thing I was adamant about was the carried interest. Enough is enough for the one-tenth of 1% of the wealthiest people in the country who have an advantage.”
Sinema, of course, has drawn a line in the past saying she does not want to see the carried interest loophole closed.
Manchin was asked if he’s prepared to give up that provision if it meant preserving Sinema’s support for the rest of the bill.
“What we have here is a good bill that’s fair to everybody,” he said. “Passing a bill is a give-and-take proposition. It’s not my way or the highway. But my goodness, people have benefited from carried interest for years and years and years … they knew that they had a good run and also that it was long overdue to be gotten rid of … you couldn’t justify it anymore. You really couldn’t. So I am hoping she will consider it and we’ll see how it goes, but this is a good piece of legislation.”
Sinema’s office has so far declined to comment on the legislation. She did not attend a Senate Democratic Caucus meeting Thursday to discuss the deal, according to one attendee.
At the White House Thursday, President Joe Biden said the bill is far from perfect, “but that’s often how progress is made, by compromises,” Biden said in remarks from the White House.
“My message to Congress is this: This is the strongest bill you can pass to lower inflation, cut the deficit, reduce health care costs, tackle the climate crisis and promote energy security, all the time while reducing the burdens facing working-class and middle-class families, so pass it,” he said. “Pass it for the American people. Pass it for America.”