Sen. Joe Manchin appears to have torpedoed a cornerstone of President Joe Biden's economic agenda, telling Senate Democratic Leader Chuck Schumer Thursday evening that he won't support moving forward on proposed tax hikes on wealthy Americans and corporations that would pay for a package of climate change and energy policies, at least not right away, this according to two aides familiar with the matter.
Democrats were hopeful they could move on a slimmed-down version of the once-sweeping social and economic spending agenda, formerly known as Build Back Better, before they depart for a month-long August recess.
Manchin had agreed to allow Medicare to negotiate prescription drug prices, potentially saving the federal government $288 billion and bringing down costs for seniors, in addition to a two-year extension of pandemic-era premium subsidies for lower income Americans enrolled in Obamacare.
In a statement on Friday, issued while he was in Saudi Arabia, Biden urged the Senate to move forward on the slimmed down set of proposals that Manchin endorses, even if climate proposals have to be left on the cutting room floor.
"After decades of fierce opposition from powerful special interests, Democrats have come together, beaten back the pharmaceutical industry and are prepared to give Medicare the power to negotiate lower drug prices and to prevent an increase in health insurance premiums for millions of families with coverage under the Affordable Care Act," Biden said. "Families all over the nation will sleep easier if Congress takes this action. The Senate should move forward, pass it before the August recess, and get it to my desk so I can sign it. This will not only lower the cost of prescription drugs and health care for families, it will reduce the deficit and help fight inflation."
Biden promised executive action to account for climate provisions that won't pass Congress.
"So let me be clear: if the Senate will not move to tackle the climate crisis and strengthen our domestic clean energy industry, I will take strong executive action to meet this moment. My actions will create jobs, improve our energy security, bolster domestic manufacturing and supply chains, protect us from oil and gas price hikes in the future, and address climate change," Biden said. "I will not back down: the opportunity to create jobs and build a clean energy future is too important to relent."
Manchin, a West Virginia Democrat who has for months warned of deep concerns about record-high inflation and the effects of more federal spending, effectively shelved tax and climate change reforms from a Senate bill until he sees data on July inflation rates due out early next month.
"Until we see the July inflation figures, until we see the July ... Federal Reserve rates, interest rates, then let's wait until that comes out so we know that we're going down a path that won't be inflammatory to add more to inflation," Manchin said Friday during a radio interview with West Virginia radio host Hoppy Kercheval. "I am where I have been."
The Consumer Price Index showed prices 9.1 percent higher in June compared to a year ago -- worse than expectations and the largest yearly increase since November 1981, a new four-decade high.