Stalled Economic Agenda Demands Biden Action, Allies Argue

Outside groups are increasing pressure on the White House to play a more active role in revamping Democrats’ centerpiece economic legislation.

The White House’s hopes of passing a roughly $2 trillion climate, social spending, and tax package stalled in December, when Sen. Joe Manchin (D-W.Va.) announced he wouldn’t support the plan.

Fear is growing among left-leaning advocates that if the White House doesn’t quickly re-engage with Manchin and make tough decisions on how to get every Senate Democrat on board, the window will close on passing anything before the midterms. Key constituencies for Democrats—unions and environmental advocates—are waiting for President Joe Biden to follow through on his promise that he would make sure the “Build Back Better” package passes.

“We are in urgent need of regaining momentum,” said Jason Walsh, executive director of the BlueGreen Alliance, an advocacy organization aimed at aligning labor unions and environmentalists on energy and trade policy. “We understand we’re not going to get everything. We’re pragmatic. But we have to get something, and it’s got to be strong.”

Walsh’s organization spearheaded a recent letter from some of the country’s largest unions and environmental groups urging Biden, Senate Majority Leader Chuck Schumer (D-N.Y.), and House Speaker Nancy Pelosi (D-Calif.) to “use your leadership” to get the Build Back Better agenda through Congress. The letter was endorsed by leaders from the Service Employees International Union, American Federation of Teachers, Sierra Club, League of Conservation Voters, United Steelworkers, and the Natural Resources Defense Council, among other advocacy groups.

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‘Rare Opportunity’ on Climate

Democratic senators have emphasized that they think they can achieve much of what the bill set out to do within parameters laid out by Manchin in a memo to Schumer last year. With Republicans united in their opposition to the administration’s broad economic plan, Manchin’s support is needed in the evenly split Senate.

Senate Finance Chairman Ron Wyden (D-Ore.), who holds jurisdiction over a large swath of the policies Democrats hope to advance through the bill, has suggested they already have a strong baseline around energy tax credits, health care provisions such as prescription drug price controls, and reducing the deficit through overhauling parts of the tax code dealing with corporations and other businesses.

Environmental groups and alternative energy advocates in particular view the expansion of renewable energy tax incentives—something Manchin is open to—as the administration’s best chance to meet its goals to slash carbon emissions over the next decade. The lack of progress over the past two months has them questioning whether it will be possible to pass even portions of what was originally promised.

“Democrats and the Biden administration are coming perilously close to letting rare opportunity slip through their fingers by not delivering what’s legislatively possible and needed to avoid climate disaster,” Matt Bearzotti, a deputy legislative director for the Sierra Club, said in a statement to Bloomberg Tax.

Radio Silence

White House spokesperson Andrew Bates, in response to questions about the lack of progress on the reconciliation package, said Biden and his team are working with “a wide range of lawmakers” on policies that would cut the cost of prescription drugs and energy.

“This would bring more Americans into the workforce, continue strengthening American manufacturing, and reduce the deficit,” Bates said in an emailed statement.

Manchin, when asked Feb. 17 whether the White House has re-engaged with him on the centerpiece of the administration’s domestic agenda, replied, “No, no formal talks at all.”

That lack of dialogue has Democratic allies worried, especially as lawmakers have pivoted in recent weeks to talking more about gas tax holidays and other proposals to combat inflation. Other high-profile issues—including government funding negotiations, an opening on the U.S. Supreme Court, and the geopolitical situation in Ukraine—also are overshadowing the stalled reconciliation package.

“The White House wants to avoid again negotiating in public and in the media, which we completely understand,” said the BlueGreen Alliance’s Walsh. “The challenge is that then creates a bit of a vacuum that sometimes gets filled in unhelpful ways.”

Advocacy Push

Walsh said he sees the five weeks between March 11—the deadline for a government funding deal—and Easter as the window for passing a revamped reconciliation package. The closer it gets to summer, the more members of Congress will be looking ahead to their midterm campaigns, making them less likely to vote on substantial legislation.

Roy Houseman, legislative director for the United Steelworkers, agreed that this spring may be the last window to pass larger pieces of the reconciliation package. Members of the union will conduct in-state visits to members of the House and Senate, with the hope of rebuilding momentum for the entirety of the House-passed package before that window closes.

Houseman also acknowledged that pieces were likely to drop out—and the union would have a better sense of what would make the cut this time after those individual meetings.

“We’ve seen so much movement but at the same time it feels like we stalled out,” he said, before comparing the push for every priority within the original domestic spending package to a boxing match. “There’s 10 rounds and we’re going to go all 10.”

Hope for a Deal

Senate Banking Committee Chairman Sherrod Brown (D-Ohio) pushed back against the notion that the White House had to take a more direct role in talks, while expressing hope that there will be a deal.

“I think they’re doing the best they can,” Brown said. “I think they’re going to continue to talk to people and come up with a bill. It may have a different name. I don’t know what it’s scope is going to be.”

Brown doubled down on a priority of his—continuing the enhanced child tax credit that expired at the end of 2021.

“It’ll have the child tax credit in it,” Brown said. “It’s too important not to.”

His comment illustrates another hurdle Democratic leaders will have moving forward: how to trim the economic legislation in line with what Manchin wants while navigating the firmly entrenched priorities of the rest of their caucus. Brown is one of several lawmakers hoping to retain the child tax credit proposal, while a bloc of House Democrats say their support is conditional on the inclusion of another potentially big-ticket item: lifting the $10,000 state and local tax deduction cap.

The razor-thin margins Democrats have in the House and Senate means that unpopular choices will have to be made over what stays and what goes.

“Our elected officials have got to lead in a tough political landscape, make decisions, and very quickly land the best deal possible for as many people as possible, which must include the climate and clean energy tax pieces,” Bearzotti said. “A deal is out there to be had.”