C&B Break Down a Wild Day on Capitol Hill

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CLAY: In the last hour, Joe Manchin addressed a huge scrum of media outside of the United States Capitol and effectively submarined the $3.5 trillion Bernie and Biden budget saying he will support no more than 1.5 trillion of that cost, meaning he lopped off, by himself, two trillion from the proposed budget. Why is this significant?

We’re gonna walk you through it here. But let’s first play a clip of Joe Manchin saying the reason why his vote matters so much is there’s only 50 senators and 50 votes for this reconciliation budget; and so if he’s not getting what he believes should be in that bill, then he’s not gonna support it. Here is Manchin saying that.

MANCHIN: We only have 50 votes. Basically, take whatever we don’t — aren’t able to — come to agreement with today, and take that to on the campaign trail next year, and I’m sure that they’ll get many more liberal/progressive Democrats with what they say they want.

CLAY: Okay. So that is Joe Manchin just moments ago in the last hour outside of the Capitol. What’s gonna…? Let’s kind of set this in context, Buck. Right now, there is an infrastructure bill that the expectations were it would come before the House on Monday. They have pushed that now to today.

The last I have heard is that they are expecting to bring that bill to the floor of the House. It has already passed the Senate with bipartisan support. Now, the challenge is, the liberal elements — the most liberal elements — of the Democratic Party have said they don’t want to vote for these separately because their concern is…

And I think it’s probably a valid one based on what you just heard Joe Manchin say. As soon as the infrastructure bill passes, there will not, then, be a 3.5 trillion or maybe even a $1.5 trillion bill that they can follow and they can pursue. So we’ll see whether or not that comes to the floor or not. The big take-away here is Joe Manchin has lopped off $2 trillion from this expense.

Still a lot of money, but $2 trillion gone, Buck. And now the question is, “Is this going to torpedo the infrastructure bill, potentially the budget at large, and everything is just going to go up in smoke all at once on Joe Biden’s legislative agenda?” How would you assess it? I’m trying to lay it out, ’cause I know this is complicated for people out there who haven’t been following this legislative minutia and are a little bit confused as to what might be going on.

BUCK: So I’m torn on this one, Clay, because on the one hand, there’s, “Oh, look, Democrat infighting. Isn’t this entertaining?” And, yes, maybe it won’t be a complete blowout of overspending. But, on the other hand, $1.5 trillion reconciliation package, half a trillion or a trillion dollars on infrastructure?

Whatever it ends up being, these are massive amounts of money. This is in addition to the federal expenditures that are currently, you know, locked into the budget and no one even really questions. They’re gonna raise the debt ceiling. The spending is going to continue. Inflation’s going to keep rising.

You have people that are arguing openly now for Modern Monetary Theory, and I mean elected officials, never mind talking head to just want to live in a fantasy world. But also, I’m reminded of how, for anybody who wonders about things like do we really have to — I don’t know — account for every vote?

Are election audits something we really need to pay much attention to? Hat tip my Friend Charles Cook down in Florida. He had some fun numbers here remind everybody, Clay. As we’re looking at the trillions and trillions of dollars that hang in the balance, you have 13,471 votes in Georgia that prevented Purdue from getting to 50% back in November.

Without, remember, one Senate seat, this is not happening. But what, how many voters we talking about in Florida here, really, as well, right? You look at the difference between just one Senate seat in one state, you look at how close some of these races were, and what would be right now a total gridlock situation where there’d be no additional spending.

Really, there’d be fighting maybe just over a much more modest infrastructure package. Every vote counts, friends. Every election, every vote, every opportunity to stand in the way of…I think it’s just basically ruinous. That’s where you have to see the Democrats for who they are.

They’re willing to roll the dice on this stuff because there’s an emotional belief in a lot of this. It’s the right thing to do, even if it means there’s inflation, even if it means the economy staggers and falls. They think this is what is righteous, not necessarily what is sound or sensible.

CLAY: Well, I will say this. A part of me thinks that Joe Manchin is crazy like a fox in trying to blow this whole thing up while pretending that he’s not. Because, as you mentioned in the last hour, he’s also saying that he wants the Hyde Amendment in place. Which, for people out there who have not paid a lot of attention to the Hyde Amendment, it essentially prohibits the use of federal funds, tax dollars, to pay for abortions, right?

I think I’m synthesizing that in a decent way. And Joe Biden flipped on the Hyde Amendment as a part of his presidential campaign. But I can’t imagine where we are right now with the Mississippi case soon to be in front of the Supreme Court, Buck. I just can’t imagine the Democrats in the House and Senate agreeing to that Hyde Amendment.

BUCK: And the Hyde Amendment point is important for of course whether or not that’s actually gonna be a stumbling block here. But also I think today is the 45th anniversary of the passage of the Hyde Amendment back in 1976. Hat tip Michael New for this historical background: 107 House Democrats supported the first Hyde Amendment.

“Every budget proposed by President Obama included the Hyde Amendment, and yet this year all House Democrats decided they would vote for a budget that didn’t include it,” end quote. Clay, the Democrat Party has moved to absolutism on the issue. It used to be just considered that was a concession they were gonna make. We’re not gonna actually take your tax dollars and pay for abortion.

The Democrat Party of Joe Biden — this is a new thing — is the Democrat Party that rejects the Hyde Amendment. So the fact that Manchin… Oh, they’re gonna say, “Oh, what’s he doing?” No, the extremists are the people that want to dramatically change everything and act like they have a mandate when they on don’t.

The radicals are not the people that are saying, “Hold on. Let’s look at what’s really going on.” It’s the people that are saying, “Shut up. Put 2,200 and whatever pages through, spend trillions of dollars, and break from traditions in the Congress of the past that had been used to cool the temperature down a little bit.” Those are the radicals. They’re Democrats.

CLAY: Well, and this is why in real time I’m so fascinated to react to this, because, again, the Joe Manchin official statement going public just happened in the last hour. And, Buck, I want to know how it changes the calculus of the infrastructure bill, in addition to the fact that Joe Manchin may have blown up the Bernie-Joe Biden budget, which he certainly has in many ways.

Has he blown up infrastructure? And so is his calculated decision here…? I mean, is he setting up everything to blow up? ‘Cause, remember, he wrote a Wall Street Journal piece saying we need a strategic pause. He’s been very focused on inflation, which I think, to his credit he should be.

And now is he trying to basically get it all into 2022? You know, he said, “Hey, I’m sure if this stuff is so popular, they can run on it in 2022.” He knows. He’s not an idiot. He knows that they’re not gonna have the House next year and they’re not gonna be able to pass this.

BUCK: This was a great moment from his press conference out on the steps of the Capitol, Joe Manchin pointing out ’cause this brings it home for people. We keep talking about inflation, 3%, 5%. It was gonna be transitory or transient or whatever. No, it’s actually now longtime and real and rising. Dollar General. I’m sure a lot of you been there. I’ve been there. Dollar General’s got some great stuff. It’s no longer Dollar General, Joe Manchin points out.

MANCHIN: I’ll give you a perfect example. In West Virginia, I just saw on today on to where the $1, we call general dollar store, Dollar General. They’re no longer Dollar General. They’re a Dollar and a Quarter, a Dollar and 50 Cent General. That’s hard for West Virginians. A lot of people do shop there.

BUCK: There you go. I think that makes it real for people, Clay.

CLAY: Well, unlike Jen Psaki, he seems to understand that when businesses have higher costs, they have to raise prices. Remember earlier this week we played Jen Psaki saying, “It would be so unjust and inequitable for any business to raise prices.” That’s how inflation works.

When the business has to pay more money for their product, they pass that cost along to consumers, which becomes a default tax increase. And that’s what many of you are seeing all over this country right now when we’re talking about 5% inflation.

So I think Joe Manchin is right here about the way that he is responding to the Biden budget. And I wonder, Buck, again, one, is he trying to submarine all this, torpedo it? Two, is the antipathy going to become so pronounced against Joe Manchin that he really thinks significantly about changing parties?

BUCK: I don’t think he’s submarining at all. He think he knows he’s in the captain’s chair, my man. He’s at the helm. I think he figures they’re gonna have to come toward him and that the more moderate Democrats now have cover among their constituencies and the radical Democrats got their whole, “Oh, but we tried so hard. We tried for that 3.5 trillion.”

But everyone’s… Clay, they’re going to spend a mind-blowing amount of money if they pass any of this. And Democrats will just have to accept that and live with it because, alternatively, what is the Biden agenda in the year 2021? What is worked well with Joe Biden and the Democrats in charge?

CLAY: I would say… I would give credit to Joe Biden potentially for this idea, if I thought he was capable of coming up with it. Is it possible Biden never wanted the three-five? He didn’t want to have a fight with the liberal wing of his base over not wanting the three-five and he’s had a secret handshake agreement with Joe Manchin on exactly how much Joe Manchin will support for months, knowing they needed his vote in order to get through in reconciliation?

And so Joe Biden staying quiet has known about this all along, and he’s letting Joe Manchin take the flak from the left wing of his party, which actually helps Joe Manchin’s chances of reelection in 2024 because he can say, “I stood up to my party.”

BUCK: And what about Biden’s interest in all of this? If you get the 3.5 trillion started to go through — and people say, “Oh, but they’re spending,” then you get all the people that pretend they’re wonks and they’re all just echoing what some nerd from the Washington Post is saying ’cause he read it from…

What will end up happening is that the markets will start to react to the increase in the government spending earlier on, right? You’ll start to see this reflected in what expectations will be at some level it becomes a psychology dictates the market. And what is a real problem for Joe Biden and the Democrats going into the midterms in general?

Gas prices, food prices, inflation.

So they’re almost saved from their worst spending ideas and influences by going with this middle pathway where they can say to their left wing socialist base, “We got a lot, but it’s not our fault. We tried.” Right? So this… I still feel like this ends up being… I know probably isn’t. I feel like this ends up being almost a political win for Democrats, assuming they pass the pared-down version.

CLAY: We’ll see.