Let's build back better

Let's build back better

By Matthew Yglesias

Build Back Better is officially dead. Joe Manchin has made it clear he wants nothing to do with the legislation that was passed by the U.S. House of Representatives and that Chuck Schumer allegedly tried to pass through the Senate. And to the extent that any of its components can be resurrected, he clearly wants to characterize the process as drafting a whole new bill.

But that’s a bit six of one, half a dozen of the other.

Build Back Better was never so much a cohesive legislative package as an arbitrary concatenation of unrelated legislative proposals. And I sincerely hope that Manchin someday realizes that his beloved filibuster renders many of the things he professes to value — bipartisanship, moderation, the ability to pass comprehensible pieces of legislation that he can explain to the voters back home — virtually impossible.

For now, though, we’re stuck with it, but it’s possible that Joe Biden, Manchin, and a few other key actors can put their heads together and write a good bill. And if you can extract any key themes from the BBBA, these are the ones that stand out:

Raise taxes on the wealthy.

Spend money on increasing the production of zero-carbon energy.

Spend money on expanding the social safety net.

Joe Manchin is not, according to Joe Manchin, fundamentally opposed to those ideas. But he does want to:

Limit the aggregate amount of new spending.

Reduce the deficit.

Make progress on inflation.

These are compatible goals. There are conspiracy theorists who believe Manchin has been fundamentally opposed to the whole idea of BBB from the beginning, has been lying about his openness, and is failing to bargain in good faith.

I cannot look into Manchin’s soul and tell you that’s false. But I don’t understand what motive he would possibly have here. If his line in the sand were “not one dollar of new spending,” he could say that, but he hasn’t. And I think it’s really important to work with him and get something done. That starts with reframing the whole structure of this conversation: at the end of the day, progressives want to see action on climate change, and we are asking a senator from an R+29 state with a historic coal industry and growth in natural gas extraction to do us a favor.

The many lives of Build Back Better

It feels like we’ve been talking about Build Back Better for a lifetime, but it’s worth recalling that this was just a campaign slogan back in the summer and fall of 2020, not a specific proposal.

Then, after winning the election and securing a Senate majority through Raphael Warnock and Jon Ossoff, Biden’s campaign promises started to take shape as a legislative agenda. And that agenda originally consisted of three phases:

The American Rescue Plan (a fiscal response to the Covid-19 pandemic)

The American Jobs Plan (infrastructure initiatives — critically including major climate investments — yoked to a proposal to increase funding for home care for the elderly and disabled)

The American Families Plan (initiatives related to health care and early childhood issues)

The Rescue Plan passed largely in the proposed form.

Many of the ideas in the American Jobs Plan were enacted in what became the Bipartisan Infrastructure Framework and is now the Infrastructure Investment and Jobs Act (IIJA). But while it’s not correct to say that IIJA has no climate provisions — it contains provisions related to the electrical grid, transit, and electric vehicles that have meaningful climate impacts — it did lack the most significant emissions-reducing elements of the AJP, including direct spending to subsidize the production of zero-carbon electricity. It also lost the home care subsidies that always felt a little bit awkwardly bolted onto the AJP framework.

The Build Back Better Act was formed out of the success of IIJA, rolling the AFP proposals plus the home care subsidies plus the remaining climate provisions into a single package.

And despite all of the legislative twists and turns since then, I think in retrospect the bill’s fate clearly hinged on one thing: in the summer of 2021, Joe Manchin didn’t want to do more than $1.5 trillion in new spending, and if anything, events since then have made him more rather than less skeptical of the merits of increasing government spending.

Coming down to earth

Democrats in Congress have wasted a lot of time treating this headline figure as a technical obstacle rather than a real one.

And in their defense, I think there’s a lot of historical precedent for that. The Obama White House, for no real reason, agreed in 2009 that the total headline cost of the Affordable Care Act should be less than $1 trillion over the course of a 10-year Congressional Budget Office scoring window. Moderates in Congress said this was important to them, the White House aligned with them, and they did in fact deliver a bill such that the CBO score was less than $1 trillion.

But they achieved this largely by delaying the implementation of various provisions so that even though the scoring window began in 2011, the HealthCare.gov website didn’t roll out until October 2013 and the subsidies didn’t start flowing to people until 2014. That delaying tactic unquestionably reduced the score of the bill but didn’t shrink its footprint in any economically meaningful way.

Then there was the Tax Cuts and Jobs Act of 2019.

Here Bob Corker demanded that his Republican colleagues keep the total increase in the deficit under $2 trillion. They did that by putting together a mix of permanent revenue-raisers, permanent unpopular tax cuts for the rich, and temporary popular tax cuts for the middle class. Then when Democrats complained that the long-run impact of this would be to raise taxes on many middle-class people, Republicans said that was an unfair lie because in the short term, middle-class taxes would be cut, and in the longer term, those cuts would be extended. Corker went for this even though it made nonsense of his own stated view on the deficit.

So given all that, I think it is both understandable and forgivable that Democratic leaders assumed Manchin could be similarly accommodated with phase-out gimmicks. In the past, congressional moderates demanding caps to 10-year budget figures were appeased by such gimmicks, so why not assume that Manchin would be, too? But Manchin wasn’t in Congress during the ACA debate, didn’t support TCJA, and apparently is less full of shit than many previous iterations of moderate senators.

One can regret the time lost and the tactical errors that brought us to this point, but it is what it is.

What really matters here?

Having a serious discussion about priorities and tradeoffs is difficult in the age of Twitter. If you explain some complicated convoluted proposal, someone will say “why don’t we just give everyone free X?” The answer is that it would cost a lot of money and crowd out other priorities, but if you try to talk about tradeoffs, you get this GIF.

I think a lot of Democrats on Capitol Hill are scarred by what happened in the earlier rounds of negotiations when Biden and Pelosi seemed to agree to drop the paid leave proposal from BBB.

One could have reacted to that by checking what the paid leave proposal cost, identifying some other equivalently costly thing to drop, and making the case that the paid leave proposal was better or more important than that other thing. Instead, a lot of people just leveled the charge that Biden hates women.

Twitter avatar for @kasie

Not only was that demagogic, as I explained on November 10, it totally mischaracterized the actual proposal.

Over 60 percent percent of the leave created by the plan was anticipated to be people taking sick leave to deal with their own conditions.

Most new parents would not get new leave benefits from the plan, both because the plan is not genuinely universal and also because many people already have leave.

It’s a difficult environment.

But I think most Democratic elected officials believe that the clean energy agenda is more important than any particular welfare state initiative. Certainly that’s what I believe. The fight to expand the American welfare state has been happening for decades. We had two giant forward bursts under FDR and LBJ. We had a major (but not giant) step forward under Obama. We made lots of forward progress under other administrations — Eisenhower expanded Social Security, George W. Bush expanded Medicare. And the American welfare state is so underdeveloped that there are lots of plausible areas for expansion: paid leave, early childhood education, health care, parental benefits.

Whatever we get done on the welfare state, the work won’t be done. And whatever we get done on the welfare state will be useful, as long as it’s well designed.

With climate, though, there is a unique element of time sensitivity. Adding clean energy sooner is a lot better than adding it later. Democrats should prioritize climate spending and do whatever they need to do in order to secure that spending.

What does Joe Manchin think?

I don’t think Manchin has been as hard to pin down on policy specifics as his critics like to say, but he has been harder to pin down than I think would be ideal.

Clean energy? “We believe that basically, yes, we can do something,” Manchin told reporters, even as he stressed the need to maintain enough fossil fuels for “reliability.” More subsidies for the Affordable Care Act? “Anything that helps working people be able to buy insurance that's affordable, I've always been supportive of,” he told NBC News. Extending coverage in states that limit Medicaid? “I've been very receptive on Medicaid expansion to the states that got left behind,” as long as there's an incentive to expand, he said.

And:

Democrats have already begun to discuss putting some revenues and savings in a new bill toward deficit reduction to attract his support, according to Senate sources.

“That’s music to my ears,” Manchin said. “Deficit reduction, inflation, being fiscally responsible — sounds like something we should be talking about!”

So where does this leave us? Let’s say you had the $500 billion in climate initiatives, plus the enhanced ACA subsidies, plus the Medicaid gap fix. That’s a $900 billion bill. Given the revenue-raisers that everyone in the party seems to agree with, that would also leave you with $800 billion in deficit reduction.

Is that the best bill I can imagine? No, absolutely not. Manchin has previously praised the BBB pre-kindergarten proposal. This is a matching grant program, so it’s very favorable to states that already have universal preschool — states like West Virginia, whose preschool program rolled out when Manchin was governor. So maybe he’d put that in for another $215 billion. If I was in a meeting with Manchin, I’d try to convince him that the proposal to enhance the Earned Income Tax Credit is more anti-inflationary than deficit reduction. That’s another $135 billion.

Of course, I’m not a deficit hawk so I’d try to talk him into all kinds of things. But the key thing is I wouldn’t try that hard. Or, rather, I’d keep in mind that a West Virginia senator is doing the progressive movement a favor by backing a bill with critical climate provisions. If he wants a Pre-K matching grant program, we should do it. If he wants to reduce the deficit, we should do that. The team from the Office of Management and Budget should be at his disposal to run the numbers any which way he wants.

Fundamentally, I would pressure him a lot to sign onto something specific in detail and not much at all about the actual content of the bill. Democrats have a nice menu of policy proposals to work with. They just need to pick some and go with it.

A popularist success story

I do think that Democrats deserve praise for avoiding any grassroots backlash on this topic.

That’s a huge contrast to Trump’s tax bill and ACA repeal effort and to Obama’s legislative initiatives. Some people see Biden’s overall unpopularity and read that to mean that his legislative agenda has been a political dud. But I think it’s the opposite. Biden is avoiding backlash to his legislative agenda even though he’s become quite unpopular based on the economic situation and Covid-19. That’s a testament to what a good job Democrats have done in identifying popular tax increases and programs that people like.

Unfortunately for their midterm prospects, these are not issues that people care passionately about.

The economy is always high-salience and people are grumpy about it right now. I also think Democrats have put themselves in a position where most people think that if they ever want to be able to ride maskless on an airplane again, they need to vote Republican, and obviously Covid-19 is very high-salience right now.

But still, they’ve come up with a really politically savvy legislative agenda. What Biden needs to do now is work out the deal with Manchin, and then sell that deal to what is inevitably going to be a disappointed caucus full of cranky members and folks chasing Twitter clout by saying it’s unacceptable. The fact is, though, there’s good stuff here and it’s worth doing whatever you can and then turning the page to “focusing on the economy” (whatever that means) and confirming judges. There’s clearly a deal within reach, and this is no time to give up.