Senator’s ‘No’ Crimps Biden Spending Plans

Joe Manchin says he won’t support the president’s Build Back Better legislation

Senator Joe Manchin

Anna Moneymaker

Dealing a serious blow to his party’s proposed social programs, Democratic Sen. Joe Manchin caused an uproar in Washington and on Wall Street that was in full swing Monday.

Manchin, of West Virginia, appeared on FOX News on Sunday to say he was a “no” on President Joe Biden’s Build Back Better legislation, provoking a backlash from fellow Democrats who support the bill, triggering lower forecasts for economic growth and contributing to a dip in the stock market Monday.

Key Takeaways

  • Senator Joe Manchin threw Democratic plans for social program expansions into disarray when he said he would not vote for President Joe Biden’s Build Back Better bill, citing concerns about inflation and the national debt.
  • Manchin had been negotiating with the White House over details of the spending plan, which would extend this year’s child tax credit expansion and create several new benefits for families. 
  • Manchin’s quashing of the $1.7 trillion spending plan led some economists to scale back their expectations for how much the U.S. economy will grow next year.

There was speculation about whether his announcement was really the end of the road for Biden’s domestic agenda, or whether Manchin might go along with something reduced in size and scope. Democrats can’t get the proposal through the narrowly divided Senate without a vote from every single member of their party, including Manchin.

Biden’s bill would create new social programs like free universal preschool, a child care subsidy, and a federal paid leave program. It would also allow the government to negotiate the price of certain medications, reducing their cost, and would extend this year’s expansion of the child tax credit as well as increase Obamacare subsidies that sunset at the end of 2022.

In negotiations with the White House, Manchin had demanded that the bill be trimmed to its current $1.7 trillion over 10 years, from its original $3.5 trillion price tag. He has also criticized the spending at a time when inflation is soaring. But in the end, even though the bill came in at the amount Manchin asked for, he wasn’t satisfied.

“This is a no on this legislation,” Manchin said. “I have tried everything I know to do.” 

Manchin’s comments roiled financial forecasts. Goldman Sachs economists scaled back their first-quarter estimate for growth in gross domestic product to 2% from 3% and made further reductions for later quarters.

While Manchin’s public comments have focused on inflation and its potential effect on the federal spending deficit, the senator reportedly told fellow Democrats that he feared parents would spend the extra child tax credit money on drugs, and that workers would use paid sick leave to sneak off on hunting trips, according to a report by the Huffington Post Monday that cited sources familiar with Manchin’s comments. 

Research has found the child tax credit expansion, rather than being mostly squandered, has been spent on things like food, and would be effective at reducing child poverty if this year’s changes were extended into the future. An October study by the Jain Family Institute, a social science research organization, estimated that making the changes permanent would reduce child poverty by 40% compared with pre-pandemic levels.

“Maybe Senator Manchin can explain to the millions of children who have been lifted out of poverty, in part due to the Child Tax Credit, why he wants to end a program that is helping achieve this milestone—we cannot,” White House Press Secretary Jen Psaki said in a statement Sunday.

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  1. The White House. “Statement from Press Secretary Jen Psaki.”

  2. “Build Back Better Act — Rules Committee Print Section-By-Section.”

  3. “Joe Manchin Privately Told Colleagues Parents Use Child Tax Credit Money On Drugs.”

  4. Jain Family Institute. “Analysis of Full Refundability of the Child Tax Credit Without Expansion.”

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