Manchin won’t raise taxes but wants prescription drug reform

Sen. Joe Manchin (D-W.Va.) has closed the door on a climate, energy and tax package, but remains open to a much smaller bill that focuses on deficit reduction, prescription drug reform, and funding for health care subsidies, according to people familiar with the matter.

Why it matters: Manchin’s offer will come as a bitter disappointment to the White House and his colleagues in the Senate.

Between the lines: While Democrats have been publicly skeptical that Manchin could reach an agreement with Senate Majority Leader Chuck Schumer (D-N.Y.), they have been privately optimistic that Manchin might support roughly $300 billion to promote renewable energy.

• And they weren’t concerned about Manchin balking on raising corporate taxes, as the West Virginia senator has long talked about repealing the Trump tax cuts and bringing more “fairness” to the tax code.
• But Wednesday’s 9.1% Consumer Price Index report validated many of Manchin’s longstanding concerns about pumping additional money into the economy.

Zoom out: The apparent demise of major new and expanded clean energy and electric vehicle investments will make it exceedingly difficult for the U.S. to meet its climate change targets.

What they’re saying: “Political headlines are of no value to the millions of Americans struggling to afford groceries and gas as inflation soars to 9.1%,” said Sam Runyon, Manchin’s communications director.

• “Senator Manchin believes it’s time for leaders to put political agendas aside, reevaluate and adjust to the economic realities the country faces to avoid taking steps that add fuel to the inflation fire.”
• The White House declined to comment.

Driving the news: Manchin informed Schumer Thursday that he was rejecting any additional money for climate spending — or any attempts to raise corporate taxes.

• He is in favor of a two-year extension for subsidies to purchase health insurance on the Affordable Care Act exchanges.
• His offer to the Democratic leader skews heavily toward deficit reduction, envisioning roughly $200 billion from the $287 billion in prescription drug savings going toward that purpose.
• The Washington Post first reported on the contours of Manchin’s offer.

Go deeper: Some House Democratic lawmakers have been sounding the alarm about raising taxes, with centrist Rep. Josh Gottheimer (D-N.J.) gauging support for a potential counterproposal.

• Gottheimer remained committed to providing money for green energy, but without raising new revenues. He also wanted to lift the cap on the state and local tax (SALT) deduction.

Flashback: Manchin declared Biden’s bigger $1.75 trillion Build Back Better agenda dead in December in a Fox News interview.

• He gave Democrats some reason to be cautiously optimistic in May when he told Axios in an interview that he and Schumer were re-engaging.
• But he was alway sure to temper expectations, telling Axios: “There could be nothing … There could be truly nothing. That’s all I can tell you.”

The bottom line: Manchin’s latest move will force Democrats to make a difficult decision.

• He’s forcing them to accept a package that will lower prescription drug prices and shore up health insurance even if it doesn’t raise taxes on corporations or do anything on climate.