Budget framework negotiations On July 13, the Democrats of the Senate Budget Committee reached a reconciliation budget limit agreement of $3.5 trillion in spending over the next decade. The next day, the Senate released a framework, which included most of the provisions of the AFP. On August 1, Manchin restated his opinion that the bipartisan and reconciliation bills should remain separate, citing concerns about the latter including how it would be paid for and uncertainty regarding whether it would pass. Representative
Alexandria Ocasio-Cortez responded by claiming that enough House Democrats would vote to block the passage of the bipartisan bill to force the approval of the incomplete reconciliation bill, citing the possibility of "a lot of corporate
lobbyist giveaways" being hidden in the former. On August 10, the Senate voted along party lines to begin debating a $3.5 trillion budget resolution. Early the next morning, the resolution passed along party lines. In August, a group of several moderate Democratic representatives urged Pelosi to hold a separate House vote on the bipartisan bill, writing, "We will not consider voting for a budget resolution until the bipartisan [bill] passes the House and is signed into law." While reaffirming that the House would not take up the bipartisan bill before the reconciliation bill passes in the Senate, Pelosi announced that she had asked the
House Rules Committee to consider the possibility of a rule to advance both packages, though this did not immediately satisfy the group of moderates. On September 2, Manchin indicated that he only supported between $1–1.5 trillion of the reconciliation package, and called for a "strategic pause". This prompted Biden to state, "I think we can work something out," On September 12, Manchin confirmed that he would not yet support the bill, stating, "We don't have the need to rush into this". Biden subsequently held meetings with Senators Manchin and
Kyrsten Sinema to discuss their objections to the package. Both House Majority Whip
James Clyburn and
House Budget Committee chairman
John Yarmuth suggested that the bill could be reduced from $3.5 trillion and still meet the president's goals. On September 23, Schumer announced that the White House and both houses of Congress had reached an agreement concerning a bill payment framework, which he described as a "menu of options". The House Budget Committee advanced the bill in a
markup session on September 25; it was next expected be reviewed by the House Rules Committee. On September 30,
Politico reported that Manchin and Schumer secretly signed an agreement proposed by the former in July to limit the total cost of the reconciliation bill to $1.5 trillion. In the text of the agreement, Manchin outlined his conditions for the bill and did not guarantee that he would vote for the final legislation if it exceeded his demands. A spokesperson for Schumer said that he had "merely acknowledged" Manchin's stance on the bill and would try to dissuade him from some of his demands.
House passage in November 2021, summarizing the final House bill A procedural vote on a House rule concerning the infrastructure and reconciliation bills, as well as the
John Lewis Voting Rights Act, passed along party lines on August 24. On September 7, the administration proposed a stopgap spending bill to avoid a
government shutdown at the beginning of October. An initial stopgap bill, which included a provision to raise the
debt ceiling, was passed by the House along party lines on September 21, but was subsequently blocked along party lines in the Senate. On September 30, a stopgap bill was passed to keep the government open until December 3, prolonging infrastructure negotiations. A prospective deadline for the House to advance both the reconciliation and bipartisan bill passed on October 1. On that date, Democratic leaders floated a $2.1 trillion compromise, but Manchin refused to budge above $1.5 trillion. The next day, Pelosi set a new deadline of October 31, having cited Biden's November trip to the
2021 United Nations Climate Change Conference as a hopeful incentive. On October 3,
Congressional Progressive Caucus chairwoman
Pramila Jayapal rejected Manchin's suggested spending limit, as well as his insistence on including the
Hyde Amendment in an expansion to Medicaid. Biden subsequently reaffirmed a target of about $2 trillion, which Manchin signaled being open to. Over the next few weeks, Democratic lawmakers reworked the bill to target the lower cost. Pelosi stated on October 25 that over 90% of its contents had been agreed to. On October 26, legislation for a 15% corporate minimum tax was unveiled; Sinema, a key moderate, stated her support. On October 28, the White House released a framework for the bill. Senate Democrats set a new deadline for around November 19, when the session recessed for Thanksgiving. On November 1, Manchin stated that he may not support the bill due to it allegedly costing more than claimed in the framework. Senate Budget Committee chairman
Bernie Sanders argued that the bipartisan bill, which Manchin helped negotiate, ran up to a $250 billion deficit, while the reconciliation bill was fully paid for. On November 5, the House Rules Committee approved a rule, which if adopted, would kick off debate on the bill. Several moderate Democrats requested a score from the nonpartisan
Congressional Budget Office (CBO) before lending their support. The score was released on November 18, finding that the bill would increase the budget deficit by $367 billion over ten years and that an estimated $127 billion would be offset by revenue generated through increased
IRS tax enforcement (differing from the
Treasury Department's estimate of $400 billion). The same day, the House voted along party lines to advance the bill. On November 19, the bill was passed 220–213 by the House; only one Democrat,
Jared Golden of Maine, voted against it, calling an increase in the SALT cap from $10,000 to $80,000 "a $275 billion tax giveaway to millionaires and the wealthy".
Senate revisions Initial negotiations The Senate is expected to revise the bill before sending it back to the House for a final vote. The Senate parliamentarian's review was expected to last through the week of December 7, after which Schumer hopes to bring the bill to a vote—probably the week before Christmas after negotiations with Manchin and Sinema. Manchin has voiced concerns about the bill including its potential effect on
inflation and whether it can pass by Christmas; he has called for changes to some of the tax provisions and cutting measures including paid family leave (which costs over $200 billion), and the enhanced child tax credit. Manchin has been negotiating with
Tom Carper over methane fees and how it would interact with
Environmental Protection Agency methane regulations. Senators Sanders,
Jon Tester and
Bob Menendez have met to consider options to revise the SALT cap. On December 10, the CBO released a revised score at the request of senator
Lindsey Graham and congressman
Jason Smith to view the cost of the bill if certain provisions were extended for the full ten years, Republicans rebuked the bill in light of the adjusted score, with Graham later stating that Manchin was "stunned" by it.
National Economic Council Director
Brian Deese clarified that the revised score is of a "hypothetical future bill" that Biden would not support, Biden later said that he did not know if he could secure Manchin's support for the bill; the two held talks on December 13 with plans to continue negotiating. Manchin has repeatedly voiced numerous concerns with extending the child tax credit, which is expected to expire. Senate Democrats defended the enhanced child tax credit, arguing that it has greatly reduced
child poverty. Manchin argued that Democrats are relying on multiple temporary programs such as the child tax credit that are intended to be extended yearly without funding, and called for the White House to be transparent on its funding in light of the revised CBO score and extend it for 10 years instead of one, which would cost $1.6 trillion. Such an extension would likely force out other priorities in the bill. When Manchin was confronted by reporters on news that he wanted to "zero ... out" the child tax credit from the package, he angrily denied wanting to cut it from the bill, calling them "bullshit". Manchin also privately raised concerns that parents would use their child tax credit payments to buy drugs and abuse paid leave to go hunting during deer season, which shocked his colleagues. He denied he made those concerns and stated through a spokesperson he only objected to the cost. The
Census Bureau has published monthly survey data reporting that low-income families that receive the payments have reported using it mostly on necessities like food, utilities, clothing and education. By mid-December, the Senate Energy and Natural Resources Committee had stripped a ban on all future offshore drilling from the House bill. Manchin, the committee's chairman, also sought to raise onshore drilling royalty rates for the federal oil and gas leasing program to only 16.7% (from 12.5%), instead of the House bill's 18.75%. Following meetings with Parliamentarian Elizabeth MacDonough to make sure all of the provisions comply with the
Byrd Rule necessary for passing a bill via reconciliation, According to the CBO, the third effort would have granted temporary amnesty to about 6.5 million non-U.S. nationals, and many of them and others would have become
lawful permanent residents. Some Senate Democrats affirmed that they would seek to include immigration measures regardless of the ruling, with
Elizabeth Warren arguing that "The reconciliation bill has included immigration provisions multiple times in the past." On December 14, Manchin quietly presented the White House with an alternate proposal of a scope closer to $1.75 trillion. It excluded funding for housing and racial equity initiatives, and included proposed tax hikes that Sinema had already opposed.
Manchin's standoff On December 19, Manchin announced on both
Fox News Sunday and his website that he would not support the bill, citing several factors including the bill's structure, high inflation, the
national debt, the severe spread of the COVID-19
Omicron variant, and "geopolitical uncertainty as tensions rise with both Russia and China." He added that many programs, specifically naming the child tax credit, would be extended year after year for a decade, inflating the bill's true cost. White House Press Secretary Psaki announced a willingness to continue negotiating with Manchin, but said if he was done negotiating this would represent "a sudden and inexplicable reversal in his position" and a "breach of his commitments" to the president and Democratic lawmakers. Biden called Manchin the night of the announcement and discussed reengaging in negotiations in 2022. Several senators called for a floor vote to force Manchin to publicly vote against the bill. Some Democrats called for a piecemeal approach to the bill's contents to sway Manchin and party leaders back into negotiations. and criticized White House staff for their handling of negotiations; this including being singled out in a December 16 statement by Biden on the stalled negotiations, which Manchin opposed because he thought it would bring unwanted attention to him and his family. He also blamed Democrats and activists for ignoring his point of view since July, specifically that the bill should only cost $1.5 trillion, as they need all 50 Senate votes to pass the bill. Pelosi vowed that her caucus would not give up, expressing optimism that Manchin would come around. Schumer announced that the Senate would vote on the bill in January 2022 to make public each senator's position. On December 21, Biden insisted that the bill would fight inflation and address medical costs, expressing optimism he could get Manchin to agree. One day before the Senate reconvened on January 3, 2022,
Axios reported that Manchin was willing to resume negotiations if the enhanced child tax credit was struck or modified to significantly lower the income caps governing eligibility. That day, Schumer said that voting legislation would take immediate precedence. On January 4, Manchin affirmed that "There is no negotiation going on at this time." Some Democrats called to separately pass the climate provisions of the bill after Manchin expressed support on a climate change and clean energy agreement, though he had strong objections to some energy measures he considered punitive to his home state. Manchin had entered discussions with those seeking to gain his support, among them
Counselor to the President Steve Ricchetti, Donald Trump's
National Economic Council director
Larry Kudlow, and Senator
Mitt Romney; they declined to discuss their conversations to reporters. In February 2021 Romney had offered an alternative proposal for the child tax credit, which earned criticism from his GOP colleagues as "welfare assistance". On January 8, 2022, after a collapse in negotiations, Manchin pulled support for the alternative proposal he had presented to the White House in December 2021. and privately signaled that he was no longer interested in supporting any form of the legislation unless Democrats fundamentally change the bill on his terms. The White House subsequently touted its accomplishments and support for the bill in a statement and dismissed the dire status of negotiations. On January 19, Biden acknowledged that it would be better to pass "big chunks" of the bill and try to negotiate other aspects later. He said he thought the provisions for clean energy and early education could pass, but expressed doubt about the child tax credit and college tuition aid. On January 20, Pelosi acknowledged that she expected the bill to be scaled down and rebranded to continue negotiations. She asserted that the bill's provisions related to combatting climate change, expanding health care coverage, and lowering prescription drug costs should remain, but also expressed doubt on universal preschool and the child tax credit. Manchin reiterated that he had pulled support for his compromise bill and that future negotiations would start "from scratch". He maintained that any future bill would have to deal with the pandemic, inflation, the national debt, and prescription drug prices to earn his support. Later in the day, several House Democrats said they would only support a bill if it included an increase to the SALT cap. On February 1, Manchin said that he was not in discussions over the bill, calling it "dead", and mentioned inflation, COVID-19 and the ongoing
Russo-Ukrainian crisis as more important priorities. Sanders strongly criticized his comments.
Attempts to salvage and final result After failing to pass the Build Back Better Act earlier in the year, Democrats attempted to pass key provisions of the bill more in line with Manchin's demands. According to Kaine, who is close to Manchin, his party was aiming to pass pieces of the legislation during the spring, preferably by Memorial Day, or before the congressional recess in August 2022. Manchin's spokesperson Sam Runyon said that Manchin had expressed willingness to reengage in negotiations. Progressive Democrats signaled the possibility of a deal with Manchin, but some expressed concern. Manchin said he would not write a partisan bill, believing the White House or Senate Majority Leader Schumer should write it for him to sign off on should it meet his requirements. After missing the Memorial Day deadline, Senator
Ron Wyden said that the new deadline was August 1, 2022, when Congress goes into recess. Manchin said that, besides what he will accept, he wanted efforts to combat inflation as an important priority in the bill. In July, Senate Democrats reached an agreement to end a tax loophole to extend the solvency of
Medicare, lower prescription drug prices and raise at least $250 billion in revenue. Manchin opposed sending direct payments to companies that generate clean energy for consumer use and capped energy spending at around $300 billion. On July 27, Manchin and Schumer announced the
Inflation Reduction Act of 2022, the final result of these negotiations, surprising other congressional Democrats. The bill, which includes provisions on tax, health care, and climate and energy spending, was introduced in the Senate as an amendment to the Build Back Better Act. On August 7, the Senate passed the bill on a 50–50 vote with
Vice President Harris breaking the tie. On August 12, 2022, the House passed the bill on a 220–207 vote. President Biden signed it into law on August 16. == Expected impact ==