Reconciliation Bill, as We Know It, Is Dead, Thanks To Senators Manchin, McConnell — and Schumer

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The New York Sun

The so-called reconciliation bill, as we know it, from the House Budget and Ways and Means committees — the Senate never did produce a tax bill, but no matter — the reconciliation bill as we know it is dead. It died with a brilliant statement from Senator Joe Manchin. And with the cleverness of the Republican leader, Mitch McConnell.

Mr. McConnell moved the Senate GOP to vote in favor of a continuing resolution without any debt ceiling changes. So there will be no government shutdown. The Democrats are still on the hook for the expected increase in debt. Just moments ago, the House approved the Senate’s continuing resolution. There may be a House vote on infrastructure this evening. I say maybe, because it’s not yet a done deal.

If there is a vote, the outcome is still up in the air. Left-wing progressives might boycott the bill. Moderate Republicans might support it. At this point, no one knows. The big issue, though, is the $4 trillion-plus reconciliation budget, which Senator Manchin killed.

Now, there may be a new budget resolution that would contain Mr. Manchin’s conditions. It might also include Senator Sinema’s concerns about taxes and spending. I think that would require months of re-negotiation and might never get done. Were the version right now brought to the Senate, it would fail 52 to 48.

Congratulations Senator Schumer. The New Yorker ignored Mr. Manchin in July. The Mountain State mensch, as the Sun calls Mr. Manchin, wouldn’t go away with his opposition. That was Mr. Schumer’s mistake, and President Biden’s same mistake, doomed the bill. Nor, let it be remembered for all time, was Mr. Manchin prepared to vote for a bill that fails to restore the Hyde Amendment, which prohibits federal funding of abortions. Good for him.

So the federal government could be living on temporary budgets for the next year. It’s not optimal, but it’s been done before. Mr. Manchin’s statement was clear on several accounts. First, unnecessary spending is “fiscal insanity” and would jack up the inflation tax that falls most heavily on the middle class.

Second, Mr. Manchin insists that all the Democratic social spending proposals be strictly limited with means testing for eligibility and would have to include work requirements. For weeks and weeks, we have pointed to the lack of workfare as a major problem in the Democratic budget, one that degrades the dignity of work.

That lack cuts into the very social fabric of America and destroys opportunities for those who become dependent on the federal welfare state. Mr. Manchin is all over this. He repeated the means testing idea several times, including in his statement last night and his press conferences today.

A lot of people are pointing to a possible topline Manchin number of $1.5 trillion. We’ve been reading a memo to Chuck Schumer from Mr. Manchin dated this past July. That’s probably where the $1.5 trillion comes from, though he has told people privately his range is between $1 trillion and $1.5 trillion. Today, he stayed with $1.5 trillion.

Here’s the rub. It’s the content of the budget policies that’s more important than the top line. In that memo, Mr. Manchin insists on needs-based means testing, with targeted spending caps on existing programs and “no additional handouts or transfer payments.”

The West Virginian also asks that no new legislative funding can be dispersed until all of the Covid legislation money is spent. He also said that the Federal Reserve should end quantitative easing.

On energy, Mr. Manchin said the sole jurisdiction on any clean energy standards must be the Senate Energy and Natural Resources Committee, which Mr. Manchin chairs.

Mr. Manchin wants spending on innovation, not elimination. He wanted fuel neutrality. He wanted carbon capture research to include coal and natural gas. He argued that if tax credits for solar and wind are included and extended, then fossil fuel tax credits must not be repealed.

So when I say reconciliation as we know it is dead, I’m suggesting that Mr. Manchin’s conditions on transfer programs, entitlements, and fossil fuels will be incompatible with the prevailing ideologies of the far-left progressives that dominate today’s Democratic Party. Last night, I called it mutually assured destruction. It’s happening.

No doubt there will be more talks, negotiating, haggling, and what not. It’s going to take a long time, in my view. Mr. Manchin is going to get his strategic pause, and I’m all for it. He’s being attacked as a Republican, infiltrating the Democratic Party. I’ve been around long enough, though, to remember that the Democratic Party used to have plenty of fiscal conservatives.

Especially from the South and the Midwest. They were variously called “blue dogs,” “yellow dogs,” whatever dogs.

I like those old blue dog democrats, of whom Mr. Manchin is one of. I also have written about another fiscally conservative Democrat, a certain John Fitzgeraldn Kennedy.

Years ago, my former boss, Ronald Reagan, passed his agenda of tax cuts and defense build-up with the help of blue dog democrats. Senator Sinema has recently been described as a John McCain independent of the sort who will vote her beliefs. She’s opposed to the corporate tax hike. My kind of gal.

Mr. Manchin favors a 25% corporate tax hike and a 28% capital gains tax. Sorry about that. But we’ll get to all of that later. Right now, reconciliation is dead. I believe there is going to be a long pause. and I have a happy face. The country will benefit. Save America. Kill the bill.


From Mr. Kudlow’s broadcast on Fox News.

The New York Sun

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