LDN - Business

Explainer: Democratic Senator Manchin upends Biden's hope to reshape economy

[October 27, 2021] By Jarrett Renshaw

(Reuters) - Democratic Senator Joe Manchin has leveraged his party's slim majority in Congress to reshape President Joe Biden's spending bill, slashing its initial price tag of $3.5 trillion and blocking policy proposals on climate and social programs.

In a 50-50 Senate where all Republicans oppose the spending plan, Democrats can only pass it if every one of their members signs on and Vice President Kamala Harris casts a tie-breaking vote.

That means the party has no choice but to bend to Manchin's will if they want the bill to pass. He has used that clout to knock down key parts of the package.

Manchin hails from West Virginia, a heavily Republican, sparsely populated coal- and natural gas-producing state that sits at or near the bottom of U.S. health, education and infrastructure rankings.

The founder and partial owner of a private coal brokerage, Enersystems, Manchin has been reluctant to rein in fossil fuels, complicating Democratic efforts to combat climate change.

He has also opposed the expansion of many social programs. At the center of the political stage, Manchin has outlined his philosophy this week with reporters, at the Economic Club of Washington and in the halls of Congress.

Here is a list of the issues where Manchin has pushed back against Biden's plans.

PAID FAMILY LEAVE AND CHILDCARE

Biden wanted to provide Americans 12 weeks of paid family leave for new parents, caretakers of ill family members and those with serious medical conditions, compensating them for up to $4,000 in wages a month.

Manchin has signaled he opposes the measure, forcing Democrats to consider paring it down to four weeks or scrapping it altogether. It would represent a significant blow to Biden.

Asked on Tuesday whether he had concerns about the paid leave proposal, Manchin said: "I'm concerned about an awful lot of things."

He does support a push for universal pre-kindergarten education. “I’m for pre-K. Whatever it costs,” he said on Monday night. “We can do that.” He said he had pushed to ensure that faith-based groups can also provide childcare.

Manchin said he told Biden: "I believe that government should be your partner and not your provider."

MEDICARE EXPANSION

Democrats want to expand the Medicare healthcare program for seniors to cover dental, hearing and vision and also extend Medicare-style insurance benefits to low-income people in states that did not expand Medicaid coverage under the Affordable Care Act, better known as Obamacare.

Manchin opposes both measures, saying the federal government cannot afford to provide added benefits like dental and that Medicare faces insolvency by 2026 even without the added benefits.

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U.S. Senator Joe Manchin (D-WV) participates in a discussion with billionaire philanthropist David Rubenstein, President of The Economic Club of Washington in Washington, U.S., October 26, 2021. REUTERS/Leah Millis

"You’ve got to stabilize that first before you look at basically expansion. So if we’re not being fiscally responsible, that’s a concern," Manchin said.

CLEAN ELECTRICITY PERFORMANCE PROGRAM

Democrats wanted to reward power utilities for investing in renewable energy such as wind and solar and fine those that do not. It was considered critical in order for Biden to achieve his goal of cutting U.S. emissions by about 50% by 2030.

Manchin has killed the proposal, arguing it would unfairly punish utility companies that are already making the transition. It would also help move power plants away from coal, a major industry in West Virginia.

"It makes no sense to me at all for us to take billions of dollars and pay utilities for what they’re going to do as the market transitions," Manchin told CNN in September.

METHANE FEE

Manchin also opposes a proposal to tax U.S. oil and gas producers for methane emissions above a certain threshold.

The greenhouse gas methane is considered the biggest cause of climate change after carbon dioxide.

STEPPED UP IRS ENFORCEMENT

Manchin criticized a proposal to force banks to report more account information to the Internal Revenue Service, complicating Democratic efforts to step up tax enforcement on higher earners as a way to raise hundreds of billions of dollars for their social spending bill.

The Democratic proposal would require banks to report to the IRS any accounts that see activity in excess of $10,000 a year, excluding wages.

Manchin said on Tuesday that he thinks the proposal will not go through. “Do you understand how messed up that is?” he said he told Biden. “This cannot happen. It’s screwed up.”

ADDITIONAL ELECTRIC-VEHICLE FUNDING

Manchin supported a measure in a separate bipartisan infrastructure bill that would provide $7.5 billion to help build a nationwide charging network for electric vehicles.

But he now says that is enough, potentially dashing Democratic hopes of providing billions more in funding.

“I said I’m having a hard time with that. I don’t remember the federal government building filling stations when Henry Ford invented the Model T," Manchin said on Tuesday.

(Reporting by Jarrett Renshaw and Jeff Mason; Editing by Heather Timmons and Peter Cooney)

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