Jonathan Chait writes:

Sunday morning, Joe Manchin threw a giant twist into the plot of the Biden presidency by announcing his opposition to the administration’s signature domestic agenda. But the new plot had a gaping hole: Biden noted that, a few days before walking away, Manchin had made a counteroffer to Biden at the White House.

What was the counteroffer? And why did Biden reject it?

The Washington Post fills in the answer. Manchin’s proposal included universal pre-kindergarten, an expansion of the Affordable Care Act, and hundreds of billions of dollars in green energy spending, all totaling the promised $1.8 trillion.

The main conceptual difference between Manchin’s bid and Biden’s ask is that Biden is trying to fund more programs with the same amount of money and does it by phasing several of them out after a few years. Manchin opposes this from the right as a fiscally irresponsible scheme to start up programs that will get extended but lack any funding source. The more important argument against it is that these plans won’t be permanent, because a future Republican Congress will happily let them expire, which would mean the hard-won spending Biden negotiated will be for naught.

In order to make all the spending permanent, you have to cut some programs. Manchin decided to cut the Child Tax Credit, family leave, and child care. I would rather have all those programs, and if I had to keep one, I’d rather keep the Child Tax Credit. However, Manchin clearly holds the leverage here and is flaunting it by demonstrating his willingness to walk away with no deal. [Continue reading…]