Senator Joe Manchin (D-West Virginia) on Wednesday paused negotiations with Senate Majority Leader Chuck Schumer (D-New York) on the budget reconciliation bill saying that it “needs to be scrubbed much better” after a new report showed that inflation hit 9.1 percent in June. Manchin said he’s not sure if he can agree to anything beyond the prescription drug reform component of the bill, which has already been sent to the Senate parliamentarian’s office and has the support of all 50 members of the Democratic caucus. He said that deficit reduction is going to be 50 percent of the new revenue gained from prescription drug savings and tax reforms, such as a 3.8 percent tax on wealthy individuals and couples who earn more than $400,000 or $500,000, respectively, from pass-through businesses. Manchin has pushed back against a goal set by Senate Democratic leadership of passing the bill before the August recess, saying that he sees September 30th, the end of the fiscal year, as the deadline. Manchin also said there’s been no talk of lifting the cap on the state and local tax deduction (SALT), something that two Democrats from the Northeast, Representatives Josh Gottheimer (New Jersey) and Thomas Suozzi (New York), are demanding, further complicating discussions.
While the reconciliation talks slowed down, and with Senate Minority Leader Mitch McConnell (R-Kentucky) holding the broader China bill hostage, negotiations between the House and Senate on their dueling legislation have been frozen, with only 12% of their differences ironed out. The Biden administration has been quietly encouraging Congress to focus solely on passing the $52 billion for the semiconductor industry before leaving for August recess. McConnell floated a potential off-ramp and opened the door to also just passing the CHIPS funding as a way to get some money out the door quickly. Commerce Secretary Gina Raimondo seized that opening and made the case to focus on the CHIPS and ITC provisions to lawmakers on Wednesday which has been quietly gaining stem.
For today, the Senate convened at 10:00 A.M. and will consider the nominations of Kate Elizabeth Heinzelman to be General Counsel of the Central Intelligence Agency and Julianna Michelle Childs to be United States Circuit Judge for the District of Columbia Circuit.
The House also convened at 10:00 A.M. and continues work on H.R. 7900 – National Defense Authorization Act for Fiscal Year 2023. Yesterday, the House completed processing amendments through Connolly Amendment #495, and today will resume debate beginning with En Bloc #5. A full list of amendments can be found here.
The House may also complete work on eight bills under suspension of the Rules.
Adam S. Olsen, Washington, D.C.
