The Dwindling Choices on Build Back Better

About a month ago, I wrote that the negotiations over the Build Back Better Act would at some point begin to resemble the film Sophie’s Choice. Longtime champions of the bill’s transformative elements would have to fight with one another over whether those elements get to stay or go.

I didn’t realize at the time how precisely that analogy would hold. According to Axios, last week Sen. Joe Manchin (D-WV) told progressives that they have to choose which program for children would survive in the reconciliation package: the expanded Child Tax Credit, or paid family and medical leave, or universal pre-kindergarten, or child care subsidies for families. This is literally the plot of Sophie’s Choice! Progressives, like Meryl Streep, must pick their favorite child (program) and leave the others to the vicissitudes of the SS officer (who I guess is Manchin in this analogy).

This is an impossible choice. (For what it’s worth, an expert panel chose pre-K.) But that’s life in the Manchin Sinematic Universe (h/t Cosmo Clyde). The filibuster in a sense caused this failure to set priorities by forcing everything into a single bill. Minus the filibuster, a rolling series of legislative efforts on each of these programs would make clear which ones have the votes and which don’t, and the agenda would get streamlined that way. The omnibus strategy, by contrast, has given everyone the belief that their priority will make it in, and makes them more reluctant to drop it.

So, although House Speaker Nancy Pelosi insists that “the guidance I am receiving from Members [of the Democratic caucus] is to do fewer things well,” that’s less true in reality. Progressive Caucus leaders like Rep. Pramila Jayapal (D-WA) have made very clear that they don’t want to make the Sophie’s Choice. (She’s even fundraising off resisting this option.)

Jayapal and others have picked up on the suggestion of our Harold Meyerson, who counseled to keep all the policies in the bill—from housing to health and family care to education to climate—and sunset them at four years, enabling them to campaign in 2024 on keeping them up and running. “The universality of benefits and the immediacy of benefits are … more important to us than having it for the entire 10 years,” Jayapal told Politico, and she has made similar comments over the past week.

If you believe in deliverism, then making a tangible difference to the broad public and running on keeping the Republicans from canceling it out makes some intuitive sense. But there are major caveats. First, the actual policies being offered are already constrained, pinched, and unlikely to do much but frustrate people. Paid leave is a good example, where a publicly run program was altered to a giveaway to private life insurance companies, through a complicated structure guaranteed to make paid leave seekers endlessly scream. Combine that (which isn’t supposed to start until 2023 anyway) with a 2025 sunset and it hardly seems worth it.

Similarly, early data on the Child Tax Credit shows that it’s barely reaching non–tax filers, meaning that it’s unlikely to meet its ambitious goals of reducing child poverty by half. Front-loading benefits that actually get delivered might be a good call; front-loading benefits that don’t makes them easy to quietly jettison.

And that jettisoning would be quite likely. The best example to use here is the federal assault weapons ban passed under President Clinton, which had a ten-year sunset clause. With Republicans in charge of Congress, it expired without fanfare in September 2004, and has never returned. Contrast this with the persistent attempts by Republicans to repeal Obamacare, which they could never muster the votes to accomplish.

It’s just easier to let something expire in our system than to affirmatively repeal it, veto points being what they are. Democrats would not only need to win the White House in 2024, but the Senate and the House as well, in order to extend their programs. In the past 30 years, a Democratic trifecta has been a once-a-decade event, if that, and the 2024 Senate map is incredibly daunting. I think some modelers can overdo the pessimism, but there is a sense that this Congress presents a final chance to make big changes. Relying on future Congresses to extend those changes is quite a gamble, no matter how popular those changes may be (and especially if they are kludgy and inadequate).

So do I have any other bright ideas? The brightest, of course, is to not cut the damn bill. Reducing the spending to $1.5 trillion, as Manchin offered as an opening bid, would reduce the benefit of Build Back Better by two million jobs, according to the Economic Policy Institute. The artificial scarcity created by tying taxes to spending in the bill has damaging consequences, and it’s not being done for any coherent reason, so you end up bargaining with air. There’s also the issue of Democratic holdouts expressing deep concern about the deficit, about which the general public couldn’t care less.

But realistically, getting all of the necessary priorities into the bill at the full level where they can be effective is not possible at this point. For one, Manchin and Sen. Kyrsten Sinema (D-AZ), the main obstacles to a baseline agreement, have completely different goals. Manchin’s threshold for taxing the wealthy is higher than Sinema’s, and Sinema’s threshold for overall spending (we think) is higher than Manchin’s. Sinema refuses to negotiate with anyone but the White House, and so what we hear reported comes through a game of telephone from unreliable narrators. The only major thing the two appear to agree on is reserving $100 billion to $200 billion for … deficit reduction! Given all this, we’ll be lucky to get in the $2 trillion range previously targeted as a middle ground.

One option that has been tragically underexplained is the extent to which tax cuts, like the advance Child Tax Credit, count as spending or as, well, tax cuts. If other tax credits, which could include child care subsidies, clean-energy credits for things like electric vehicles, and potentially a lot more, fall under the tax credit bucket, more money frees up under the spending cap. The House Ways and Means Committee markup included $1 trillion in expanded tax credits, for example, and that’s without labeling the subsidies for Affordable Care Act exchange coverage as advance tax credits, or doing it for rental assistance for housing, which could certainly qualify. Add $1 trillion to a $2 trillion spending level and suddenly you have far fewer Sophie’s Choices to make.

Both sides could defend this solution: The Manchin Sinematic Universe (or Miniverse, when contrasted with the rest of the Democratic Universe) can say they cut spending, while progressives could tout the overall outlays. It should be said that this would be in line with just about every Republican tax bill in history, none of which contemplated putting tax cuts in the spending column. But while this was once a live option in White House talks, according to my colleague Bob Kuttner, we’ve heard less about it lately. It’s also unclear whether the MSU would be willing to go along, as you would still have to come up with more revenue increases to meet their goal of deficit neutrality.

If Democrats can’t pull off the tax cut gambit, it leads to some very unpalatable bargaining. While it’s true that ultimately we’re talking about whether Biden’s first-year fiscal impact will hit $4.5 trillion or $5.5 trillion, numbers that would have been unthinkable even in the Obama era, the choices that will need to be made will be contentious and could easily fail. With each passing day, more hard lines are drawn and opinions become more entrenched. I’d add that feelings get hurt, but, to move beyond feelings, the only people actually hurt by all this are the millions of Americans hoping for help with the extreme challenges of a threadbare social safety net and a government they feel doesn’t care about them.