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Manchin, Schumer Negotiating Scaled-Back Reconciliation Bill

Jeff Carlson  

· 5 minute read

Jeff Carlson  

· 5 minute read

Senate Majority Leader Charles Schumer (D-NY) is negotiating a scaled-back reconciliation package totaling about $1 trillion in hopes of bringing a bill to the Senate floor before the August recess. Schumer and Sen. Joe Manchin (D-WV) have been meeting privately over the past few weeks and have made progress, but sources say a deal remains far off.

To date, the two have agreed on a Medicare prescription drug pricing proposal the Congressional Budget Office estimates would save the federal government $280 million over the next 10 years. In addition, they are said to have reached a deal to raise taxes by 3.8% on the pass-through income of small-business owners who make over $400,000 annually with the anticipated revenue targeted for Medicare expenses.

Problems in other areas, however, could derail the Schumer-Manchin talks. The West Virginia senator has said he’s interested in adding provisions that address the climate crisis, but disagreements remain over tax credits for clean-energy manufacturing, as well as fees on methane emissions and carbon-intensive imports.

Extending enhanced premium subsidies for enrollees in the Affordable Care Act is also a major sticking point, as Manchin remains concerned over increasing the U.S. federal budget deficit. There is also no agreement on a global minimum tax, and Democrats and Republicans in the House of Representatives are still at odds over deductions for state and local taxes.

Additional complications threaten the move to approve reconciliation legislation before last year’s authority expires September 30. Schumer is isolating for a week following a positive test for COVID-19 over the weekend, and Senate Minority Leader Mitch McConnell (R-KY) is threatening to block votes on the China-focused U.S. Innovation and Competition Act (USICA) if Democrats move forward with a reconciliation bill.

“Let me be perfectly clear: There will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill,” McConnell said in a social media post over the July Fourth recess.


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