Democrats Do the Manchin Mambo

Plus, the F-35's troubles continue ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Good Tuesday evening. Here’s what we were up watching instead of seeing Man City top Real Madrid in what was apparently a seven-goal thriller. Joe Manchin, again the center of attention. (Graeme Sloan/Sipa USA) Democrats Do the Manchin Mambo Democrats have started their delicate dance again. Call it the Manchin Mambo. As President Joe Biden and members of his party turn their attention to reviving elements of their stalled domestic agenda, their hopes once again rest on Sen. Joe Manchin. The West Virginia centrist late last year scuttled a $1.7 trillion package of climate programs, social spending and tax increases called the Build Back Better Act, leaving Democrats to wonder just what portions of their plan they might be able to salvage. The key question remains: What does Manchin really want? “This is now the time for Manchin to demonstrate he wants a deal of some sort by indicating exactly what would be acceptable to him. The time for 20 questions is over,” Bill Galston, a senior fellow at the Brookings Institution, told The Washington Post. “If he is serious about doing the deal, now is the time to do it.” Manchin on Tuesday met with Senate Majority Leader Chuck Schumer (D-NY) and he indicated to reporters afterward that his focus is on fighting inflation and reducing the deficit, not on bringing back a sweeping social spending package. “Debt reduction is the only way to fight inflation,” Manchin reportedly said, adding that he wants to raise the corporate tax rate to 25% and close loopholes in the tax code. "There's not a Build Back Better revival," Manchin said. "There's not." Manchin has indicated repeatedly that he has concerns about using a party-line reconciliation package for legislation that deals with social programs, emphasizing that such bills should go through regular order. At the same time, he has continued to express support for deficit reduction, energy and climate initiatives and lowering prescription drug costs as well as rolling back some of the 2017 Republican tax cuts through a reconciliation bill, which would need the support of all 50 Senate Democrats. Manchin has reportedly also launched bipartisan talks about an energy and climate change package, which could complicate any Democratic efforts to construct a party-line reconciliation bill. “He remains seriously concerned about the financial status of our country and believes fighting inflation by restoring fairness to our tax system and paying down our national debt must be our first priority,” a spokeswoman said in a statement to [The Washington Post]( that also mentioned fighting climate change, promoting U.S. energy independence and prescription drug costs as priorities. White House worries Manchin won’t agree to any deal: The Post’s Jeff Stein and Mike DeBonis report that White House officials fear they won’t be able to reach any deal with Manchin by July 4, which many lawmakers see as the deadline for action before election season ramps up. Some officials reportedly say privately that they’d consider themselves lucky if they end up with a deal worth $1 trillion — and some reportedly note that Manchin has benefitted politically in conservative West Virginia from his high-profile defiance of President Biden and other Democrats. “In recent weeks, White House officials have quietly tried gauging Manchin’s interest in a package that would consist primarily of clean-energy initiatives, prescription drug reform and higher taxes on the rich and corporations,” Stein and DeBonis report. The ideas being considered also include $500 billion in deficit reduction, a Manchin priority. “But despite his support for these provisions generally, Manchin has not yet made clear to the White House precisely what he would support in a final agreement, the people familiar with the administration’s discussions said.” One unnamed White House adviser told the Post: “There’s real fear inside the building that Manchin’s stonewalling will run out the clock on Biden’s legislative agenda throughout the rest of the year, leading the administration and congressional Democrats into November without anything else to offer voters.” The bottom line: Manchin may represent the crucial 50th Democratic vote for a reconciliation package, but while Democrats try to figure out what he’d support they can’t take the other 49 votes for granted. Sen. Kyrsten Sinema (D-AZ) opposes some of the ideas Machin supports, such as raising the corporate tax rate. “There are varying levels of optimism among different colleagues in the Senate. I am the most skeptical,” Sen. Dick Durbin (D-IL) told [Bloomberg News](. “I want to put two of my colleagues in a room with a blank sheet of paper and ask them, ‘What will you agree to?’” White House Pushes Wider Use of Covid Treatment Paxlovid The Biden administration has secured the purchase of 20 million doses of Paxlovid, a treatment for Covid-19, and plans to make the drug more available around the country. Approved in December, Pfizer’s anti-viral drug is being promoted as a key tool in helping the country return to something like normal after two years of pandemic restrictions. The White House said Tuesday that it would increase the number of pharmacies carrying the drug from 20,000 to 30,000 in the near future, with a goal of 40,000 in the coming weeks. “Although Paxlovid was initially in short supply after Food and Drug Administration (FDA) authorization, the Administration has worked with Pfizer to accelerate the delivery of these pills, and they are now in ample supply,” the White House said in a statement. Speaking to reporters Tuesday, White House Covid-19 response coordinator Ashish Jha said the country is at an inflection point in the pandemic, with deaths continuing to fall even as cases rise, driven by the BA.2 variant of the virus. Still, he warned that the virus remains a threat and repeated the administration’s call for more funding. “We know that the risk of potential surges, even of a potential new variant, remains out there,” Jha said. “The good news is we are at a point where we have a lot more capabilities, a lot more tools to protect the American people: testing, vaccines, therapeutics.” But the effort needs more money, with a $10 billion funding bill hung up in the Senate. “So far, Congress has not stepped up to provide the funds that are needed for our most urgent needs,” Jha said. “Now, I know they were off on a two-week recess; they are back. I’m looking forward to working with Congress — we all are — to get the funding needs of the American people met on this — on the issue of COVID and COVID treatments.” Number of the Day: 58% About 58% of Americans had been infected by Covid-19 by the end of February, following this winter’s wave of the highly infectious omicron variant, according to a [new report]( from the Centers for Disease Control and Prevention. Infection rates vary by age, with about 75% of children (up to age 17) having been infected, but only 33% of those age 65 and over. About 64% of those aged 18 to 49 have been infected, while 50% of those between 49 and 64 have been. “The data from blood tests offers the first evidence that over half the U.S. population, or 189 million people have been infected at least once since the pandemic began — double the number reflected in official case counts,” The Washington Post’s Lena H. Sun and Dan Keating [write](. F-35 Joint Strike Fighter Is Running Late and Arriving Too Early: GAO The F-35 Joint Strike Fighter is on track to be the most expensive weapons system in U.S. history, with a total lifetime cost pegged at roughly $1.7 trillion. Although more than 750 of the jets have been delivered to the U.S. military and foreign customers, problems persist in the production line, with more than 25% of the aircraft arriving late, according to a new report from the Government Accountability Office. At the same time, GAO says that F-35s are being delivered before a modernization program initiated four years ago has been completed, meaning that hundreds of jets may have to be retrofitted in the future, requiring additional time and expense. Due to the ongoing problems, the Department of Defense has been unable to declare that the F-35 is ready for “full-rate production,” a bureaucratic certification that the jet is ready to go. But Lockheed Martin is producing the jets at a relatively high rate of roughly 150 per year anyway, which could mean that about a third of all Joint Strike Fighters end up being manufactured before being given the all-clear by the Pentagon. [Read the full GAO report here](. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- News - [Fears Mount Inside White House That Manchin Won’t Agree to Any Deal]( – Washington Post - [Manchin Stirs the Pot While Other Dems Try to Resuscitate Their Party-Line Vision]( – Politico - [Manchin Won’t Support New Health Policy Unless Congress Rolls Back Trump Tax Cuts]( – STAT - [Biden Signals He’s Open to Canceling Student Loans]( – Washington Post - [Biden Administration Will Comply With Expected Federal Order Blocking Termination of Title 42]( – CNN - [A Major Recession Is Coming, Deutsche Bank Warns]( – CNN - [Senate Report Suggests Military Housing Company’s Fraud Continues]( – Roll Call - [Talks of Suspending California’s Gas Tax Increase Fizzle Out]( – Politico - [Hot Job Market, an Economic Relief, Is a Wall Street Worry]( – New York Times - [Senate Confirms Lael Brainard to Be Federal Reserve Vice Chair]( – Washington Post - [Vice President Harris Tests Positive for Coronavirus]( – New York Times - [With Supply More Abundant, Pharmacies Struggle to Use Up Covid Pills]( – New York Times - [Birx: Trump’s Disinfectant Comments Were a ‘Tragedy on Many Levels']( – Politico Views and Analysis - [Republicans Have Stopped Trying to Kill Obamacare. 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