The Morning Dispatch: What Comes Next for Build Back Better?

Happy Friday! An early Christmas present from your friends at The Dispatch: An edit button for the comments section!

Quick Hits: Today’s Top Stories

• The Centers for Disease Control on Thursday recommended Americans seeking COVID-19 vaccines and boosters choose the Moderna or Pfizer shots rather than Johnson & Johnson’s, as the latter has been linked to a rare blood clotting issue that has led to between nine and 11 confirmed deaths. Approximately 17 million doses of the J&J vaccine have been administered in the United States, compared with a combined 470 million doses of the two-dose Moderna and Pfizer vaccines.

• The Senate voted unanimously Thursday to pass the Uyghur Forced Labor Prevention Act, sending the legislation—which would prohibit all imports from China’s Xinjiang region unless it can be proven they weren’t made with forced labor—to President Joe Biden’s desk. The White House said this week Biden will sign the bill into law.

• The Food and Drug Administration said Thursday it will lift a regulation requiring abortion pills “be dispensed only in healthcare settings,” allowing providers to prescribe the pills—used up to 10 weeks’ gestation—via telemedicine and send them to women in the mail. Nearly two dozen states, however, have preemptively banned the practice.

• The Justice Department has reportedly broken off settlement negotiations with the lawyers representing families separated at the U.S.-Mexico border during the Trump administration, opting instead to adjudicate the lawsuits in court.

• One day after the Federal Reserve signaled a trio of potential interest rate hikes in 2022, the Bank of England announced Thursday it will increase its benchmark interest rate to 0.25 percent to combat inflationary pressures, becoming the first major central bank in the world this year to do so. The European Central Bank, meanwhile, announced yesterday it will leave interest rates unchanged for now while gradually tapering its asset purchase programs.

• The Treasury Department announced Thursday it is prohibiting American investment in eight Chinese tech companies—including drone-maker DJI Technology Co.—after determining they “actively support the biometric surveillance and tracking” of ethnic and religious minorities in China at the behest of the Chinese Communist Party.

• Initial jobless claims remained near pandemic lows but increased by 18,000 week-over-week to 206,000 last week, according to the Labor Department. The measure’s four-week moving average is now at its lowest point since November 1969.

• Ohio-based Christian Aid Ministries announced Thursday that all 17 of its missionaries taken hostage by the 400 Mawozo gang in Haiti two months ago have been released.

• The Senate voted 75-18 Thursday to confirm Nicholas Burns as the United States’ ambassador to China.

• Democratic Rep. Alan Lowenthal of California announced Thursday he will not seek a sixth term in 2022, becoming the 20th Democratic member to announce his retirement from the House this cycle.

The BBBeginning of the End?

When 13 House Republicans broke ranks last month to help Democrats get $550 billion in new infrastructure spending across the finish line, it sparked outrage on many segments of the right—in part over the bipartisan infrastructure framework’s (BIF) various provisions, but primarily because of what the bill’s passage supposedly meant for Democrats’ larger Build Back Better (BBB) legislation. 

“13 Republicans swooped in to rescue Pelosi, provide Biden with the biggest victory of his presidency, and put the rest of his reckless agenda on a glide path to passage in the House,” National Review’s Philip Klein wrote at the time. “[BIF’s passage will] help grease the wheels for the passage of the larger multi-trillion welfare bill that will expand Medicare and Obamacare, initiate a federal takeover of preschool and child care, and impose economically devastating tax increases on individuals and businesses.”

A few days later, however, we reported that many of the House and Senate Republicans who supported BIF did so precisely because they believed its passage would hinder Democrats’ ability to move forward with BBB. By playing ball on physical infrastructure, the argument went, a handful of Republican negotiators had successfully delinked the smaller, more popular bill from the larger, uber-progressive BBB. Centrist lawmakers who wanted an infrastructure deal but weren’t on board with all of BBB’s provisions—Sens. Joe Manchin and Kyrsten Sinema—no longer felt like they had to stomach the latter in order to ensure their priority became law.

“The fundamentals were always: Dems were united around infrastructure, mostly, but divided on ‘human infrastructure,’” a senior Senate GOP aide told The Dispatch yesterday, referring to Democrats’ alternative branding for BBB. “That’s why they were separated and never came together. The idea that one would pave the way for the other never made sense because it could never provide any explanation for why they were split up in the first place.”

Back in November, that same GOP aide predicted the delinking would imperil BBB’s chances. “I think that we still have a lot of ability to just kick the crap out of the reconciliation bill over the next few months and give ourselves a fighting chance that maybe it never passes at all,” the aide told The Dispatch at the time. “Or it passes in a very, very, very weakened state so [Democrats] can say that they did something.”

Slightly more than one month later, it’s hard to argue with that theory of the case. Congress has been productive in December—funding the government, raising the debt limit, passing the National Defense Authorization Act, advancing the Uyghur Forced Labor Prevention Act—but progress on Build Back Better has been minimal to nonexistent, despite Senate Majority Leader Chuck Schumer repeatedly setting a Christmas deadline to get it to Biden’s desk. In an evenly divided Senate, it takes only one Democratic defection to tank the reconciliation bill—and Manchin has thus far proven more than willing to do just that if his demands for the legislation are not met.

Party leaders have been working the West Virginia Democrat for weeks, looking for ways to mitigate his concerns about the size and scope of the bill without scaling it so far back as to provoke a progressive revolt, but to no avail. And in a lengthy statement released last night, Biden finally conceded what had become obvious to congressional junkies weeks ago: BBB will not be passed any time soon.

“I believe that [Sen. Manchin and I] will bridge our differences and advance the Build Back Better plan, even in the face of fierce Republican opposition,” the president said. “My team and I are having ongoing discussions with Senator Manchin; that work will continue next week. It takes time to finalize these agreements, prepare the legislative changes, and finish all the parliamentary and procedural steps needed to enable a Senate vote.”

Democrats have pared back their social spending bill over the fall in hopes of securing Manchin’s support. In response to Manchin’s objections, the White House removed a provision that would have required employers to provide workers 12 weeks of paid family and medical leave (though the House added a four-week requirement back into the version of BBB it passed last month), and the legislation’s topline number has been whittled down from $3.5 trillion to about $1.75 trillion—at least on paper.

Worried about inflation, Manchin is wedded to that dollar figure—and adamant that the bill be fully paid for. “We have $1.75 [trillion] to work within,” he told CNN earlier this week. “So pick your priorities and let’s do it.”

But as we’ve noted in recent weeks, the two parties disagree on how to calculate the true cost of the legislation. From Monday: 

The lawmakers who crafted the legislation included a series of expiration dates and sunset clauses—the bill’s child tax credit boost lapses after just one year, for example—that serve to reduce the topline cost of the package. Republicans—channeling their inner Milton Friedman—expect those programs to become permanent.

“These permanent programs are typically done in two steps. First, you pass the temporary bill, and then later you get often a bipartisan vote to extend the programs without pay-fors, because nobody wants to be accused of taking away an existing benefit,” [Manhattan Institute economist Brian] Riedl said. “Nobody believes that Congress would let the Child Tax Credit expire after one year, or let brand new entitlements expire after three or four years.”

The nonpartisan Congressional Budget Office has scored the legislation both ways—exactly as written, and under the assumption all its programs are extended for a decade. In the first scenario, it adds about $160 billion to the deficit over 10 years. In the second, $3 trillion. The main driver of the difference is the enhanced child tax credit, which the CBO estimates would cost $185 billion through 2022, but $1.6 trillion if extended.

It makes sense, then, that that program—created by Biden’s American Rescue Plan on a temporary basis and set to expire at the end of the month—is where Manchin and Biden are furthest apart. 

Manchin  isn’t opposed to the enhanced credit—which has been depositing $250 to $300 per child in most parents’ bank accounts every month since July—in and of itself, saying this week he “believes” in it and thinks it “works great to help people.” But Manchin is frustrated by Democrats’ efforts to use what he called “shell games” and “budget gimmicks” to artificially shrink the size of BBB. “None of us should ever misrepresent to the American people what the real cost of legislation is,” he declared last month.

Manchin’s fellow Democrats are furious with his stance. Senate Majority Whip Dick Durbin told reporters yesterday he is “stunned” by Manchin’s opposition to a one-year extension to the child tax credit. Sen. Richard Blumenthal said it’d be “unconscionable” to let the credit expire, and Sen. Sherrod Brown said its place in BBB was “non-negotiable.” If that’s true—and Manchin holds strong on his $1.75 trillion red line—then Democrats will need to cut nearly all other priorities out of the bill, as, again, 10 years of the tax credit costs slightly less than $1.6 trillion. You can see why this got punted into 2022, and why Republican Sen. Lindsey Graham thinks the bill is “dead forever.”

“At every stage, [Democrats] have taken the path of least resistance and pushed back all the tradeoffs and the hard stuff,” Liam Donovan, a lobbyist and former Republican Senate campaign operative, told The Dispatch. “This is that kind of coming home to roost, and they’re still not fully grappling with it.”

But Donovan doesn’t rule out Democrats regrouping after the holidays and getting something done. It’ll just have to be on Manchin’s terms. 

“Can the other 49 senators, the 218 House members, and the White House live with a Manchin bill? Or are they satisfied with nothing more than the BIF?” he said. “I think it’s in everyone’s interest to take whatever Manchin is going to give them. They won’t necessarily be happy about it, it’s going to take some surgery. But I think the key is that the House is pretty much resigned to accepting whatever the Senate can send back. And the question is, what can the Senate send back?”

Late Thursday night, we learned something that it can’t: immigration reform. The House’s version of Build Back Better included five-year work permits and deportation protections for illegal immigrants who arrived in the United States before 2011, but Senate Parliamentarian Elizabeth MacDonough decided last night that the provision violated reconciliation rules, which require legislation to be at least tangentially related to the budget. It was the third time she’d shot down a Democratic attempt to slip immigration reform into the BBB.

“These are substantial policy changes with lasting effects, just like those we previously considered, and outweigh the budgetary impact,” she wrote. Democrats could technically disregard her ruling—and several lawmakers last night advocated for doing just that—but that’s another one of Manchin’s red lines. 

In an effort to distract from failure to pass BBB by their self-imposed deadline, party leaders have in recent days begun talking about reprioritizing federal voting and election reform. “If we can get the congressional voting rights done, we should do it,” Biden told reporters Wednesday. “There’s nothing domestically more important than voting rights. It’s the single biggest issue.”

But that is going nowhere fast as well. Democrats’ two current proposals—the Freedom to Vote Act and the John Lewis Voting Rights Advancement Act—require 60 votes to advance and have no Republican backers. Some Democratic senators have begun calling for a filibuster carveout on voting rights legislation, but once again,Manchin and Sinema aren’t on board.

“[Sen. Sinema] continues to support the Senate’s 60-vote threshold, to protect the country from repeated radical reversals in federal policy which would cement uncertainty, deepen divisions, and further erode Americans’ confidence in our government,” her spokesman John LaBombard said.

There’s a misconception in Washington that major pieces of legislation can’t pass in an election year. Welfare reform was enacted in August 1996. Former President Barack Obama signed the Affordable Care Act into law in March 2010. There were obviously extenuating circumstances, but the most expensive piece of legislation in American history—the CARES Act—passed overwhelmingly just months before a presidential election.

Still, Democrats were hoping to use the Christmas recess as an artificial deadline to create a sense of urgency in negotiations. And with that gone, it’s unclear when to expect a deal to be struck—if one is struck at all. The only guidance Biden gave last night on that front was “as early as possible.”

Donovan still believes Democrats will pass something, but argued that if they don’t, it will be because progressives don’t understand their lack of leverage. “If you’re making a case for why the odds of this thing happening are going down, it’s not because Manchin’s going to kill this thing, but because Democrats don’t seem willing to come to him, and he can take it or leave it,” he said. “How quickly this can be resolved is entirely a function of how quickly Joe Biden is willing to … hand Manchin the pen and say, ‘Okay, what do you need?’”

“It’s going to have to happen on [Manchin’s] terms,” Donovan concluded. “He’s been very consistent, if not always clear, in what he needs. Biden could resolve this early and easily, or he could continue thinking he’s going to move Manchin. But I don’t think Manchin feels like being moved.”

Worth Your Time

• In the Washington Post, Kentuckian Cole Douglas Claybourn recounts his experience living through last weekend’s tornadoes—and how his community rallied in response. “This was the first time in my life I’d felt any unease about a storm. It was also the first time that I took the official warnings and directions seriously, and that probably is what saved my life,” he writes. “When daylight broke, the true magnitude of the devastation was visible. A hundred yards or so from my house, my neighbor B.J.’s house was leveled. By 7 a.m., B.J. was more concerned with helping his neighbors than dealing with his own home’s destruction. B.J. embodied the spirit that this entire community has shown in the days since the storms hit. By Saturday afternoon, a team of church volunteers whom I’d never met had arrived to clean the debris and tree limbs out of our yard. Others brought food and water. Colleagues drove their cars to me so I could charge my phone. All over the state, Kentuckians have shown up—whether it was with a chainsaw, a wallet, or a hug—to take care of their own. Scores of local sports teams, school organizations, and churches have flooded the streets with volunteers.”

• If you’re a sports fan, you’re likely aware that COVID-19 is currently tearing through the NFL, NBA, and NHL. The Chicago Bulls, for example, had both their games this week postponed because nearly 60 percent of their roster—and two of their broadcasters—had entered the league’s health and safety protocols, which require those who test positive to stay away from the team for 10 days. But the whole team is vaccinated, and coach Billy Donovan said “a lot” of the players testing positive were completely asymptomatic. In his latest “House of Strauss” newsletter, basketball writer Ethan Strauss wonders if the NBA should update their pandemic rules and set an example for the country as an Omicron surge looms. “The NBA actually has an opportunity here to end the precautionary moment, or at least signal its ebb,” he writes. “If commissioner Adam Silver steps forward and announces that his league is ending test protocols and treating this admittedly terrible disease in much the same way we deal with some other respiratory illnesses, that’s a potential cultural shift. The basic plan would be to test players and team officials only if they’re obviously sick (and sit said players if they test positive). And no more of the contact tracing that’s gummed up work behind the scenes of a highly mobile industry. The message could be simple: Look, we can’t functionally operate like it’s 2020; now that the disease is endemic, and vaccines are widely available, we must move into 2022.”

• In his latest column, former Treasury Secretary Larry Summers welcomed the Federal Reserve’s pivot this week but argued the moves announced are “not sufficient” to combat inflation and sustain economic growth. “Restoring monetary policy to a normal posture, let alone applying restraint to the economy, will require far more than the three quarter-point rate increases the Fed has predicted for next year,” he writes. “Even with its actions this week, the Fed remains well behind the curve in its commitment to fighting inflation. If its statements reflect its convictions, this is a matter of serious concern. To be fair, though, there is another possibility. Perhaps the Fed’s restraint reflects less conviction about what ultimately will be necessary than a desire to avoid being itself a source of economic shocks. We should hope that what we have seen is just the first part of what will be, if necessary, a more radical policy redirection. Time will tell.”

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Also Presented Without Comment

Toeing the Company Line

• On Thursday’s episode of Advisory Opinions, David and Sarah discuss the Supreme Court’s decision not to block New York’s vaccine mandate for health care workers. Afterward, they’re joined by  Virginia Solicitor General Michelle Kallen for a conversation about the Equal Rights Amendment.

• Psychiatrist Sally Satel stopped by The Remnant yesterday to discuss the state of medical science. How has psychotherapy changed over the years? Is wokeness harming the practice of medicine? What can be done to address the opioid epidemic? And will people only get crazier as the COVID-19 pandemic refuses to end?

• A retired Army colonel named Phil Waldron is being subpoenaed by the January 6 Select Committee. His name might be newly familiar to the public, but he’s been part oof the Stop the Steal Movement since the early days, Khaya reports.

• Speaking of the January 6 Select Commttee, Gregg Nunziata looks at Mark Meadows’ claim of “executive privilege” in ceasing cooperation with the committee. He writes that the courts have recognized such a privilege but that it is limited and qualified.

Let Us Know

Do you think the Democrats’ best path forward is to pass a Build Back Better bill that funds a bunch of different programs for a few years, or one that funds one or two programs for a decade?

Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Charlotte Lawson (@lawsonreports), Audrey Fahlberg (@AudreyFahlberg), Ryan Brown (@RyanP_Brown), Harvest Prude (@HarvestPrude), and Steve Hayes (@stephenfhayes).