Sen. Joe Manchin drew the ire of fellow Democrats on Nov. 1 by raining on President Joe Biden’s big government parade.
As Biden and leaders in Congress attempted to hammer out a deal on his so-called “human infrastructure” bill, Manchin’s vote was key to everything. Democrats have only 50 senators, and they need every one to support this legislation if it is to pass. So it was a moment of bitter disappointment when Manchin disparaged it, dashing all hopes that it would go through.
“As more of the real details outlined in the basic framework are released, what I see are shell games,” the West Virginian said. “Budget gimmicks that make the real cost of the so-called $1.75 trillion bill estimated to be almost twice that amount, if the full time is run out, if you extended it permanently. And that we haven’t even spoken about.”
This sent liberal Democrats through the roof, but if anything, Manchin was understating the case. Researchers at the University of Pennsylvania’s Wharton Business School published a simulated budget document that removes all of the gimmicks from this bill. It turns out that it ends up costing $4.1 trillion, more than twice the advertised price, over 10 years. Its tax increases come to $1.5 trillion. Not only is that considerably more expensive than advertised, but it’s also a lot farther from being paid for than anyone would have expected, let alone how Biden represents it.
You might think budgeting is dull, but budgeters have become quite skilled at hiding costs since the modern budget process was adopted half a century ago. One trick is to have specific expenditures — in this case, refundable tax credits and Obamacare premium tax credits — expire on paper, knowing that Congress will have little choice but to extend them later under pressure. This is known as a “funding cliff,” and Biden’s bill is replete with them. Another classic trick involves passing measures that raise revenue, then canceling them through executive action. Such a scam helped make it look like Obamacare on paper cost far less than it actually did.
Also on the revenue side, Biden’s bill contains the highly dubious assumption that a mere $80 billion invested in the IRS will help the agency collect $400 billion in phantom taxes on unreported income. “There is every reason to believe the administration is overestimating by literally hundreds of billions of dollars,” the National Taxpayers’ Union estimates.
The good news is that the bill’s chances of passing went down instantly after Manchin spoke. This is why Democrats immediately began adding provisions to it, such as removal of the cap on the state and local tax deduction. They realized that if they at least vote on a doomed bill, they can tell their constituencies that they tried.
Terry McAuliffe’s loss in Virginia on Nov. 2 made a deal even less likely. Why should Manchin put his neck on the line to save a sinking presidency?
Rep. Cori Bush savagely denounced Manchin as a racist for his refusal to jump behind Biden’s agenda, but that’s just the reflexive, vituperative response of a defeated left-wing extremist.
The important catchphrase for this bill is “Failure is an option.” This is not the debt ceiling. Failure to pass will have no catastrophic economic consequences. In fact, given its expected inflationary effects, it’s better it doesn’t pass.
Politically, nobody cares. According to a recent poll, 69% of the public has no idea what is in this bill. Of the remaining 31%, only a quarter believe it will help them. No one will gain favor with voters by taking one for the team and voting for an expensive, inflationary bill so that a historically unpopular president can claim some accomplishments in his first year in office.
