The announcement of the deal, which would raise $739 billion in new tax revenue, fund a raft of new climate provisions and pay down $300 billion from the federal deficit, came as a complete surprise to their colleagues in the Senate. “I would say it’s somewhere between a surprise and a shock,” Sen. Chris Murphy (D-Conn.) said after attending a special caucus Thursday morning where Schumer explained the deal.
It was all the more surprising because less than two weeks earlier, talks between Schumer and Manchin collapsed in dramatic fashion when Schumer signaled that he would push forward with a watered-down budget deal that included only prescription drug reform and a two-year extension of his subsidies. Affordable Care Act expiring.
Manchin admitted Thursday morning that he and Schumer lost their temper in a heated debate on July 14 when the Democratic leader accused him of “walking away” from a deal after months of negotiations.
“It got a little warm and hot if you will,” he said.
“He said you’re walking, you’re not going to do this or that,” Manchin recalled. “I said, Chuck, I’m not running away from anything, I’m just being very careful. West Virginians cannot afford higher prices. They can’t afford higher gas prices, higher food prices.” Manchin said the talks collapsed because of his reluctance to enact a major tax and climate bill after the Bureau of Labor Statics reported June 13 that inflation reached 9.1 percent in June from a year earlier.
Manchin said Schumer called him out of the deal, but insisted he never did.
“I’ve never turned back in my life and I’ve never left,” he said.
Manchin said he ran into Schumer again the following Monday, and their tempers had cooled by that point.
“By Monday we met each other again. I said, ‘Are you still upset?’ He said, “I’m very disappointed.” I said, “Well, you shouldn’t have been. Something positive could be done if we all want to work rationally,” Manchin said, recounting the key moment.
He said their staffs began working together in earnest the next day, Tuesday, July 19.
Manchin said his staff and Schumer’s staff picked up the things they were working on before and “started to restructure.” They finally reached a deal on Tuesday afternoon, acknowledging that they had to announce the package on Wednesday if they were to have any chance of getting it through before the scheduled start of a long summer break on August 6.
“By Tuesday night, everyone – there weren’t that many of us – those of us who might have had some disagreements, we finally agreed,” he said. “We had the script pretty much written in that arena. That is why the text was completed on Wednesday. On Wednesday morning it was confirmed that it was a trip.” It just so happened that the timing lined up perfectly with Schumer’s plan to hold a final passage vote on the brands and science bill at noon Wednesday.
Republicans who voted for tens of billions of dollars for the domestic semiconductor industry and the National Science Foundation were outraged and felt betrayed. Sen. John Cornyn (R-Texas), a key player in passing the chip-and-science bill, said he had been “privately assured by some Democrats, including the Senate Majority Leader’s staff, that the tax and climate provisions were off the table,” which Republicans said would be a condition for moving the stamp bill.
Cornyn went to the Senate Thursday afternoon to protest the secret climate and tax deal. “How can we negotiate in good faith, compromise where necessary and get things done together after the majority leader and the senator from West Virginia pull a stunt like this?” he said with growing exasperation. “To look you in the eye and tell you one thing and do another is absolutely unforgivable.” Manchin on Thursday insisted that he and Schumer did not make a “quick move” on Republicans by announcing the deal Wednesday afternoon.
“No, you know, I sure hope they don’t feel that way. I mean, I understand that it is, but I don’t know why,” he told reporters on a conference call. Schumer told reporters Thursday afternoon that he and Manchin released the legislative text and summaries of the deal once they finalized it.
“Because of the length of the parliamentary birdbath, we wanted to do this as soon as possible,” he explained, referring to the work officials will do to determine whether the package can be approved under an arcane budget rule used to avoid a GOP filibusters.
Schumer noted that talks with Manchin broke off on July 14 but that Manchin “came to see me” the following Monday, July 18.
“Manchin asked for a meeting with me on the 18th and said, ‘Can we work together and try to put together a bill?’ I said, as long as we finish it in August, we’re not waiting for September,” he said.
Manchin said his staff took the lead at that point. “It was me and my staff, and then we worked with Schumer’s staff. My staff drove it, we wrote the bill. Schumer’s staff would look at it, we would negotiate,” he told West Virginia radio host Hoppy Kercheval Wednesday morning.
He said his staff shaved about $400 billion to $500 billion in other revenue-generating tax reforms from the bill.
“There was a lot more revenue before that,” he said, explaining how the bill changed after he and Schumer blasted each other.
By Tuesday afternoon they agreed to set a minimum corporate tax of 15% on companies with more than $1 billion in profits, strengthening tax compliance enforcement with the IRS and closing the carried interest loophole that allows asset managers to pay capital gains tax rates of profits on income from profitable investments.
The Hill’s Morning Report — US economy shrinks, recession fears rise The Note: No, really — What if Alexandria Ocasio-Cortez runs for president? Manchin kept President Biden on the sidelines after last year’s negotiations between Manchin and the White House ended in failure and public accusations after months of fruitless talks.
“President Biden was not involved,” he told West Virginia MetroNews. “I wasn’t going to bring the president in. I didn’t think it was fair to bring him in. This thing might as well not have happened at all,” he said, explaining that he didn’t want to implicate the president as discussions about the case collapsed again.