How secret talks resurrected Joe Biden's agenda and shocked Washington

 How secret talks resurrected Joe Biden's agenda and shocked Washington

How secret talks resurrected Joe Biden's agenda and shocked Washington

The perpetrator was well-known. Sen. Joe Manchin, a moderate West Virginia Democrat, expressed concern about the impact of the massive climate, tax, and social safety net plan on inflation. The news was met with frustration and anger, but not surprise, in Jeddah, where Biden was holding tense meetings with Saudi leaders.

Thirteen days, two Covid infections, and a few heated arguments later, the tide has turned. Manchin and Senate Majority Leader Chuck Schumer stunned most of Washington on Wednesday when they announced an agreement on a version of Biden's long-stalled climate, energy, and tax agenda, four days after restarting their negotiations in secret.

It's less than half the size of Biden's original Build Back Better bill, and Manchin made it clear that the name had been changed. Republicans are unanimously opposed, and some Democrats in both the Senate and House have yet to sign on, making the Inflation Reduction Act of 2022 far from a done deal.

However, after appearing dormant for months, the agreement breathed new life into ambitions that many Democrats had largely abandoned. With the passage of a bill boosting US computer chip production on Thursday, the President's legislative prospects are improving.

On Wednesday, Biden spoke with Manchin, who is isolated with Covid in the West Virginia mountains. Biden had mostly given up on formal talks with Manchin after witnessing the senator repeatedly derail his agenda. It was the Democrats' first formal call on the agenda since December.

"Government work can be slow, frustrating, and sometimes even infuriating," Biden said a day later, emerging into the White House's State Dining Room to announce the unexpected developments. "Then the hours, days, and months of hard work for those who refuse to give up pay off. History is being written. People's lives are altered."

The climate and tax agreement was put together in almost complete secrecy, taking many by surprise when it was announced in the late afternoon on Wednesday.

Sen. Tina Smith of Minnesota tweeted, "Holy shit." "I'm taken aback, but in a good way."

That was a far cry from the mood among Democrats on July 14, when Manchin publicly demolished the climate and energy policies at the heart of the Biden administration's pledge to drastically reduce carbon emissions.

The blow to the President's domestic agenda two weeks ago came as no surprise to the White House, which had suffered a string of setbacks over the previous year. Senior administration officials were already skeptical of negotiations between Manchin and Schumer to revive the President's plans.

As he was quick to point out, Biden had been largely excused from the talks.

"I didn't negotiate with Joe Manchin," he told a reporter on July 15 inside the Waldorf Astoria hotel in Jeddah when asked if Manchin was negotiating in good faith. "I'm not sure."

The most conservative Democrat in the Senate expressed concern about the latest inflation figures. According to a July 14 report, inflation rose 9.1 percent year on year in June, a 40-year high.

"When 9.1 came in, I said, 'I can't, I just can't do it,'" Manchin said Thursday, recalling a conversation he had with Schumer after the two had been in private talks for three months about reviving Biden's climate priorities. "That's when Chuck became agitated."

The discussions were not always calm and collected.

"Our tempers get a little bit ahead of us at times," Manchin admitted, adding that some had "let the dogs out" on him for allegedly walking away from the deal.

However, by the following week, the two senators had cooled off. On July 18, as they passed each other in a Capitol hallway, Manchin asked Schumer if he was still upset.

"I said to myself, 'This is ridiculous,'" Manchin explained. "Let's recalibrate and see if there's something that can be done. 'OK,' he says, to his credit."

At a news conference on Thursday, Schumer said Manchin approached him that day with an offer: "Can we work together and try to put together a bill?"

However, the timeline was still uncertain.

Manchin had stated publicly that he would do nothing on climate until September and would have to wait until the August inflation figures were released. Schumer insisted to Manchin that a climate agreement be reached before then.

"I told them, 'As long as we finish it in August, we won't have to wait until September.'" Schumer elaborated.

Manchin initially refused, but Schumer persisted with proposals that the West Virginian could support. The senator eventually returned and said he was willing to move forward with an August deadline, according to the aide.

A few commitments and concessions helped secure his support.

Tax increases on the wealthy, advocated for by Biden and other Democrats, are not included in the final bill. And Manchin has stated that he would not have agreed to participate unless Democratic leaders promised to pass legislation addressing energy infrastructure permitting, which would pave the way for a shale gas pipeline in West Virginia.

Meanwhile, former Treasury Secretary Larry Summers, who issued early warnings about inflation last year, much to the chagrin of the Biden administration, privately reached out to Manchin to argue that the deal would be deflationary rather than inflationary.

During a CNN interview, Summers declined to comment on his private conversations, but he did offer reassurance to those concerned that the bill would increase inflation.

"This bill combats inflation and has a slew of collateral benefits," he said on "New Day."

Summers wasn't the only one working behind the scenes for Manchin.

Colorado Democratic Sen. John Hickenlooper told reporters that he and his staff were receiving analysis of the tax and climate deal from economists at the University of Pennsylvania's Wharton School of Business.

"We knew (Manchin) trusted Wharton because he'd used it before for modeling," Hickenlooper told reporters. "So we asked them to create a model of this. We did that and received modeling indicating that this is not inflationary in any way, which we sent to Joe."

Hickenlooper said he was trying to add to the chorus of voices trying to persuade Manchin that the deal would reduce inflation. Other senators, including Smith, Hawaii's Brian Schatz, and Delaware's Chris Coons, were making similar arguments, according to Hickenlooper.

"I was listening to everything Joe said he had a problem with and trying to address it," Hickenlooper explained. "When he said the problem was inflation and the rest he could handle, I took him at his word."

According to administration aides, senior officials at the White House were aware that serious discussions were taking place but were not directly involved. People close to Biden were wary of involving him in another round of legislative drama, only to have negotiations fall apart once more.

"President Biden was not involved," Manchin said on the radio Thursday. "I wasn't going to bring the President in because I didn't think it was fair, and this could very well not have happened at all. It could have easily gone wrong. I needed to see if we could pull this off."

The content of the agreement was not fully disclosed to White House officials until the very end. "It was a closely guarded secret," one official told CNN.

During the course of the negotiations, both Biden and Manchin became infected with Covid. Biden worked from the White House, while Manchin sought solitude in his home state's mountains.

By Wednesday, Manchin and Schumer had reached an agreement, which they announced just minutes after the Senate passed the computer chips bill. Some saw the timing as less than coincidental; Senate Republican Leader Mitch McConnell had threatened to filibuster the chips bill if Democrats advanced a bill containing Biden's agenda.

"I think everyone was surprised, certainly by Democratic representations about this deal, and I think there was a certain amount of people being blindsided — not only on our side but on the Democrats' side," Senate Republican Whip John Thune said Thursday.

When asked if McConnell handled the deal correctly, he said, "You'll have to talk to him about that."

Despite their celebrations on Thursday, Democrats face an uphill battle in gaining enough support for the package, even among members of their own party. Schumer told Democrats behind closed doors on Thursday that they were on the verge of passing items they'd been discussing for years.

"We'll have to stick together and work long days and nights for the next 10 days," he explained. "We will need to be strict with our messaging and focus. It will be difficult."

Kaitlan Collins of CNN contributed to this report.


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