Susan Walsh/AP Photo
Rep. Pramila Jayapal (D-WA), the chair of the Congressional Progressive Caucus, center, talks with reporters outside the West Wing of the White House, October 19, 2021, following a meeting with President Biden.
Anyone in Congress would have told you before yesterday that negotiations on the Build Back Better Act were adrift, which is what happens when ships lack a rudder. Today, they’ll tell you that things look more on course, because President Biden got personally involved in a series of White House meetings. Biden’s goal is to get a publicly announced deal on Build Back Better, and to pass the bipartisan infrastructure bill, by the end of the month.
It’s interesting that it took this long to get to a presidential-level intervention, and that the president himself had to lead it. But what does it mean for the bill?
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Yesterday, I noted that many of Joe Manchin’s negotiating positions were actually worse than the status quo. What Biden outlined yesterday comes off that low point, but it also gives plenty of ground to Manchin. With his vote essential to passing anything, Manchin was always going to have outsized influence on the end product. The fear is that his preferred framework again puts Democrats in a politically precarious position of abandoning the middle class by carving them out of public benefits.
Practically everyone I’ve talked to, including several members of Congress, has favored doing fewer programs better, amid the artificial scarcity Manchin created by setting a low topline figure. But I always thought it would come down to doing more programs worse. Too many expectations had been set up about pet projects Democrats have wanted to realize for decades, amid urgent challenges that have gone unfixed for too long. The consequence of a narrow congressional margin is that you have to offer everyone something to keep them on board.
Biden used $2 trillion as a shorthand for the overall spending figure, though it could go as low as $1.75 trillion. (Manchin is still touting $1.5 trillion as his topline.) And at this point, only tuition-free community college is coming out of the bill, as far as the major planks go. But that was already out; the education title in the House structured its funding through expanded Pell grants. The Pell grants are still in. So you essentially have to fit everything from a $3.5 trillion project into nearly half that amount.
One way to accomplish that is through sunsets. Biden talked about a “pilot program” for expanding dental coverage in Medicare; in other words, a short-term program. Obamacare subsidies currently in place through 2022 would extend for three more years. The Child Tax Credit expansion would only last one additional year, to 2022. Those are short timelines to expect any extensions, especially if Republicans win a house of Congress. The concept of running on those benefits would be more successful if they’re entrenched for more than a year.
The bill also would meet the spending target by devoting less to everything. Home-based care for the elderly and people with disabilities would get less than the $250 billion seen as the absolute minimum to meet the twin goals of expanding affordable access and improving pay and conditions for workers. (Biden’s initial ask was $400 billion.) Housing was a $330 billion piece; Biden talked about $200 billion. Biden also said that the bill may only offer four weeks of paid family and medical leave, which obviously beats the current system of zero weeks but is barely a benefit compared to the rest of the world.
It’s more unclear what’s going to happen to the climate section of the bill, which Biden considers a centerpiece despite Manchin eliminating the main provision, which would use payments and penalties to transition utilities to clean energy. Biden talked about using executive action to achieve his goal of a 50 percent emissions reduction by 2030, and there’s a lot he can do there. But that says nothing about what the bill might include.
But the most dangerous way Democrats have hit upon to shrink the cost is by phasing things in or cutting anyone making a middle-class salary out of the program.
Child care is a good example of the phased-in approach, which is really deadly for building broad-based support of any program. The child care subsidies are structured so that nobody will spend more than 7 percent of their income on child care. But there are three years of phase-ins to navigate. In 2022, only people making up to the median family income in a particular state qualify for subsidies. Go one dollar over that and you pay the full cost of child care. In 2023, this extends to 115 percent of the median, and 130 percent in 2024, before opening to all incomes by 2025.
The most dangerous way Democrats have hit upon to shrink the cost is by phasing things in or cutting anyone making a middle-class salary out.
So two elections will be waged with people making the average state income or a little higher getting no child care subsidies. The savings on cost come at the expense of alienating large segments of the voting public.
That phase-in was in the baseline House version of the bill. Manchin wants to supplement that by adding income caps to everything, so that nobody above a certain income can access any of the programs, be they child care or the Child Tax Credit or elder care or paid family leave. Biden did not discuss means testing on the CTC, but he did say that paid leave would be means-tested at $100,000 of income. (Paid leave is actually an example of means testing at the high and low end; because there’s no minimum benefit, the poorest workers who cannot take time off with an 85 percent replacement rate of their meager income will likely not participate.)
Means testing narrows the constituency for these programs, and can call up resentment from those left out. It offers no base benefit to a voting population that has shifted away from Democrats because they don’t feel like Democrats deliver for them. Moreover, everyone gets harmed by means testing, because it places a large reporting burden on all participants to determine eligibility, creating hassles and burdens to participation and forcing citizens to become unpaid bureaucrats.
What’s amazing is that Manchin understands this. The only program he has vowed to keep universal, and exempt from any means testing, is free pre-kindergarten for ages three and four. That’s because he instituted it in West Virginia, and he knows from that experience that restricting it to poor families would have been politically problematic. Depriving children of something that can improve their development solely because of the income level of the parents who brought them into the world is something Manchin correctly sees as unnecessary and cruel in the context of pre-K, but not for day care or the child allowance.
Obamacare had cliffs that exempted middle-class families from benefits; they were so untenable that this bill attempts to fix them with expanded subsidies. But Democrats like Manchin seemingly have to unlearn and relearn this lesson repeatedly, with grave consequences politically for the party.
