White House aides weigh deficit reduction as way to revamp economic plan for Manchin

[LetMyPeopleVote]

Deficit reduction for its own sake is a good policy and can be combined with build back better'

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White House aides have in recent days discussed revamping President Biden’s economic package so it would substantially reduce the budget deficit, in an appeal designed to win over Sen. Joe Manchin III (D-W.Va.), said one administration official and three other people familiar with the matter.

Biden administration officials have been adamant that earlier versions of the Build Back Better proposal — stalled for months largely because of Manchin’s opposition — would be fully paid for and would not add to the deficit. But that argument has not persuaded either Manchin or some of the Washington budget hawks in communication with him. To try to control costs, Democrats had structured several programs in the bill to last only a few years. This would have reduced the headline cost of the legislation even if party officials aimed to later extend those programs. Manchin, though, was unimpressed and dismissed this tactic as a budget gimmick, effectively derailing the whole package.

Hoping to resurrect the legislation, White House officials have in recent days discussed structuring the package so it would meet Manchin’s demands that it reduce the deficit without the measures he regards as gimmicks, a step that would require axing many domestic policy priorities from the bill......

The precise ideas on the table are not clear, and the people familiar with the discussions cautioned that they are preliminary and that no written plan has emerged. White House officials have circulated internally a column by the liberal commentator Matthew Yglesias suggesting that the party could approve $500 billion in climate programs and $400 billion in health-care initiatives — and still unify behind enough tax increases so that the legislation would curb the deficit over 10 years by $800 billion. That kind of bill would probably exclude Biden’s expanded child tax credit, a key priority for fighting childhood poverty, but many Democrats believe that it would be better than the current alternative: passing nothing. The people spoke on the condition of anonymity to reflect administration conversations.

[LetMyPeopleVote]

1. The winning message for the 2022 midterms--making the wealthy & corporations pay their fair share.

This polling shows that combining build back better with deficit reduction could be a great mid term message

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[PoliticAverse]

2. Sinema will step in and veto any tax increases. n/t

[Mr.Bill]

3. Trying to make Manchin happy

is a waste of time. What he wants changes every day. I'm starting to think Biden's time would be better spent negotiating with some of the moderate republicans. As the 1/6 committee comes down on Trump harder these moderates will be running for cover anyway.

[Voltaire2]

4. Deficit reduction is shit policy.

The cuts invariably hurt everyone except the rich, and do nothing else. It’s all show, except of course for the cuts in social programs.

What won’t get cut is our insane war budget. What won’t get cut is the billions we pour into militarized police forces. What won’t get raised are taxes on the rich. What won’t get cut are giant subsidies to fossil fuel industries.

[LetMyPeopleVote]

5. This is deficit reduction by raising taxes on the higher income taxpayers

We are not talking budget cuts but raising taxes so that the plans are paid for with extra left over to reduce deficit

[Voltaire2]

7. It won't happen. One of The Two will block it.

[LetMyPeopleVote]

6. Why Manchin is right to press Sinema on rolling back GOP tax cuts

Manchin is advocating raising taxes on the rich to pay for build back better and to reduce the deficit. It is Sinema who is causing problems with this plan

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The Wall Street Journal reported this morning that when it comes to tax policy, the West Virginian is actually taking a fairly progressive stance — and it’s Democratic Sen. Kyrsten Sinema of Arizona who’s standing in the way.

In recent weeks, as Democrats’ efforts on the child-care, healthcare and climate package have remained stalled, Mr. Manchin (D., W.Va.) has repeatedly said the party should focus an updated version of the bill on increasing government revenue. Raising taxes enough to more than offset the bill’s spending would reduce the budget deficit and fight inflation, he said, addressing concerns that led him to oppose the House-passed package last year.

I realize that in many progressive circles, Manchin is seen as effectively a Republican, but most notably on taxes, the assessment isn’t true. The West Virginian is prepared to significantly roll back the Republicans’ Trump-era tax breaks — which Manchin voted against at the time — creating a higher corporate tax rate, a higher top marginal rate for the wealthy, a higher capital-gains rate, a higher rate on carried-interest income, and even raising the income threshold for taxes that fund Social Security from $147,000 to $400,000.....

In case this isn’t obvious, if the Build Back Better agenda dies because Sinema was overly committed to protecting GOP tax breaks for the wealthy, her odds of winning a Democratic primary in 2024 will be poor.

[LetMyPeopleVote]

8. Romney's push to revive child tax credit hinges on work requirements

I like the concept of raising taxes in connection with the child tax credit to make it a deficit reduction plan. I do not like the Romney plan

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Over the past few months, Sen. Mitt Romney, R-Utah, has quietly pushed for a Republican-friendly version of the expanded child tax credit that he hopes could gain bipartisan support.

His proposal would bring back the direct monthly payments many parents used for six months last year to cover the cost of food, clothing and child care before Congress let the tax credit expire.

But Romney's form of extra monthly payments would add stringent work requirements, slash programs that aid vulnerable Americans and make significant changes to the tax code.

While the additional work requirements and the reduced safety net programs could be tough pills for Democrats to swallow — even before they consider the sticky issue of tax reform — a bipartisan bill might be the only way for the expanded child tax credit to land on President Joe Biden's desk.

Romney has largely worked with fellow Republicans on his plan, but conversations with Democrats have increased in the last month or so, a senior GOP aide familiar with the proposal said.