By RYAN LIZZA and EUGENE DANIELS
08/08/2022 06:15 AM EDT
With help from Eli Okun and Garrett Ross
Senate Majority Leader Chuck Schumer (D-N.Y.) at the Capitol yesterday after passage of the budget reconciliation bill. | Francis Chung/E&E News
THE WEEK —Today: The Bidens travel to flooded-damaged eastern Kentucky. … Tuesday: President JOE BIDEN signs the CHIPS and Science Act into law. Primaries in Connecticut, Minnesota, Vermont and Wisconsin. RUDY GIULIANI testifies before a grand jury in Georgia. … Wednesday: Biden signs the PACT Act (the toxic burn pits bill) into law, and departs to Kiawah Island, S.C. July inflation numbers are released. … Thursday: More inflation data: Producer Price Index … Friday: The House returns to take up the Inflation Reduction Act. Primaries in Hawaii. The University of Michigan releases new consumer sentiment data, which is expected to show an improvement since last month.
ORAL HISTORY — We know readers love tick-tocks, those now-it-can-be-told accounts of what really went on that appear soon after a bill is safely passed. This morning, there are several good ones about how the Inflation Reduction Act made it through the Senate. We chopped them up, rearranged them, added our own reporting, and, in what we hope is a recurring feature, present Playbook’s master narrative of how it all went down.
“The precursor bill [Build Back Better] was vast in scope, provisioning child care, free community college for low-income Americans and subsidized health insurance, along with new provisions to ease immigration. Drawing its name from Biden’s 2020 campaign slogan, its backers — including [Sen. BERNIE] SANDERS, whose budget work helped enable the bill — saw it as the most ambitious legislation since the Great Depression.” (WaPo’s Tony Romm)
“[Sen. JOE] MANCHIN killed the $1.7 trillion Build Back Better bill back in December after failed negotiations with President Joe Biden. (POLITICO’s Burgess Everett and Marianne Levine)
“‘We were probably too aggressive,’ said Sen. MARK R. WARNER (D-Va.), a behind-the-scenes negotiator over the past year, reflecting on what went wrong. ‘The idea we were going to solve virtually every issue in one bill … was probably a bridge too far.’” (Romm)
“Democrats, at Biden’s direction, began rethinking the package, a set of negotiations led by [Majority Leader CHUCK] SCHUMER.” (Romm)
The president and Manchin spoke over the phone during this period, but they abandoned one-on-one dealmaking, instead giving Schumer and Manchin space to negotiate. Biden directed STEVE RICCHETTI to be his main liaison to the senator. White House chief of staff RON KLAIN, whose relationship with Manchin imploded in December, talked to Schumer every day, per an administration official. (Playbook)
“Schumer and Manchin broke bread, and Manchin delivered his negotiating position: He wanted to wait until April before trying again. And when they did, he only wanted to talk to Schumer.
“After Russia invaded Ukraine [on February 24] and Europe’s energy supplies were squeezed while U.S. gas prices began rising, Manchin then saw an opportunity to make big climate change investments while simultaneously boosting fossil fuel production this spring.
“‘That is the catapult that basically launched me,’ Manchin said in an interview.” (Burgess/Marianne)
“As they kept most Democrats out of the loop on the negotiations, Mr. Schumer said one of his top aides kept Ms. Sinema abreast of the talks.” (WSJ’s Andrew Duehren and Siobhan Hughes)
The White House quietly moved things along. Klain had dinner with Manchin to try to patch things up, but Ricchetti remained the senator’s point of contact. BRIAN DEESE, director of the National Economic Council, traveled to West Virginia with Interior Secretary DEB HAALAND and Energy Secretary JENNIFER GRANHOLM. Biden’s aides got serious about Manchin’s parochial energy requests and an outline of an agreement on those policies took shape. (Playbook)
“[Manchin] and Schumer were looking at a package that brought in more than $1 trillion in revenue and spent significantly more than the package that passed Sunday.” (Burgess/Marianne)
Wednesday, July 13 (release of the June inflation report)
“But Manchin began having second thoughts after the July 4 recess, as inflation indicators continued to flash red.” (Burgess/Marianne)
Thursday, July 14
“‘I just said, “Chuck, I can’t do that” … That’s when he got mad,’ Manchin said. ‘Half-hour later, they put the dogs on me.’ …
“After that blow up, Democrats coalesced around prescription drug reform and a short extension of Affordable Care Act subsidies, relegating energy, climate change and taxes to the dustbin.” (Burgess/Marianne)
“Mr. Manchin told Mr. Schumer that he could agree to soon pass legislation that only lowered drug costs and extended ACA subsidies, putting the tax increases and climate programs in danger. When that stance was reported in the news media, many Democrats and Republicans took that to mean the talks on any package were over.
“‘I was sort of surprised and frankly, he knows this, I was upset. I thought we had come pretty close to an agreement,’ Mr. Schumer said in an interview. Mr. Manchin has said the two men agreed to give talks another shot after their tempers cooled.” (Duehren/Hughes)
Friday, July 15
Ricchetti talked to Manchin on Thursday night and again on Friday, hoping the dialogue could resume. But there was no evidence Manchin wanted to engage with White House officials, who privately told reporters that Manchin would never come around and that it was useless to wait for him. Having given up on him, Biden issued a statement endorsing the plan to move ahead with the healthcare-only bill.
With climate legislation seemingly dead, the White House also prepared options for Biden to declare a climate emergency and announced that the president would soon travel to Massachuseets with Senator ED MARKEY, who publicly urged Biden to make the declaration. (Playbook)
Monday, July 18
“Manchin quietly resumed his talks with Schumer.” (Burgess/Marianne)
Manchin also called Deese and Ricchetti that morning and revealed that he was still talking and still wanted a deal. Deese quietly journeyed to the Hill and met with Schumer and Manchin’s staff in Manchin’s hideaway to talk through the structure of an agreement.
In the ensuing days, Ricchetti continued to talk to Manchin, Deese worked with Manchin’s staff, and Klain stayed in touch with Schumer. But the White House was largely relegated to technical assistance. Everyone agreed that the final details would be negotiated between Schumer and Manchin. (Playbook)
Why did Manchin come back to the table?
“Manchin says he never took it personally, yet there are two schools of thought in the Democratic caucus about whether that pressure campaign worked. Some argue that the attacks on Manchin from his own colleagues drove him back to the table. Others say a cohort of Democratic senators who quietly reassured Manchin amid the blowback proved far more effective.” (Burgess/Marianne)
“Democrats said a threat by [Senate Minority Leader MITCH] MCCONNELL to block the microchip bill should Democrats proceed with the climate and tax bill backfired by motivating Mr. Manchin to pursue a compromise.” (Hulse)
Wednesday, July 27
“When they announced their deal on July 27, the Democratic Caucus was triumphant.” (Burgess/Marianne)
“To assuage Manchin, Democrats had to give up some of their more ambitious plans — free prekindergarten for all, paid family and medical leave for workers nationwide — and offer new support for fossil fuels.” (Romm)
Ricchetti, Klain, Deese and Office of Legislative Affairs director LOUISA TERRELL briefed Biden, who was isolating with Covid. Afterwards, Biden called Manchin and Schumer and publicly endorsed the deal. (Playbook)
Thursday, Aug. 4
“Senator Chuck Schumer was huddled in his Capitol office on Thursday evening awaiting a climactic meeting with [Arizona Democratic Sen.] KYRSTEN SINEMA, a critical holdout on his painstakingly negotiated climate change, tax and health care deal, when the loud booms and flashes of a powerful thunderstorm shook Washington, setting the lights flickering.
“Mr. Schumer and his aides, so close to a signature legislative achievement to top off a surprise string of victories, glanced anxiously at one another and wondered if it was a bad omen. A 50-50 Senate, a pandemic that kept Democrats constantly guessing about who would be available to vote and the sheer difficulty of managing the nearly unmanageable chamber had left them superstitious. …
“He needn’t have fretted. After a half-hour meeting, Mr. Schumer shook hands with Ms. Sinema … who agreed to lend her support to the legislation.” (Hulse)
“She opposed a proposed increase in taxes on private-equity managers’ carried-interest income, a provision that Mr. Manchin had sought. ‘He very very wisely and unselfishly said, “Look, I can’t get everything I want either, so we’ll have to drop it.” Sen. Sinema felt strongly it shouldn’t be in,’ Mr. Schumer said.” (Duehren/Hughes)
“On Aug. 4, Warner joined Manchin on his house boat to talk about the deal Sinema would soon announce on taxes. After getting soaked in a rainstorm, Warner left with a new outfit — wearing a pair of Manchin’s shorts and a T-shirt — and a hope that Manchin, Sinema and Schumer would see eye-to-eye.” (Burgess/Marianne)
Saturday, Aug. 6
“Manchin returned Warner’s suit, fully pressed.” (Burgess/Marianne)
“Before debate began, the bill’s prescription drug price curbs were diluted by the Senate’s nonpartisan parliamentarian who said a provision should fall that would impose costly penalties on drug makers whose price increases for private insurers exceed inflation. It was the bill’s chief protection for the 180 million people with private health coverage they get through work or purchase themselves.” (AP’s Alan Fram and Lisa Mascaro)
“When Democrats unveiled the final legislation Saturday, it imposed the 15 percent minimum tax on some businesses owned by private equity. That had been included in previous versions of the legislation but omitted from the initial draft of the deal with Manchin. Sinema opposed it, an alarming development. ‘I thought we wouldn’t pass the bill,’ Schumer said. ‘It was hard to figure out how to make it work.’” (Burgess/Marianne)
Sunday, August 7
“The talks with Ms. Sinema, which continued right up until the final vote, also led Democrats to repeatedly scale back the 15% minimum tax on large, profitable corporations. Not only did they relax the measure on Sunday, they had also previously altered it to allow companies to continue to accelerate depreciation for tax purposes. Some manufacturers had warned that denying or deferring accelerated depreciation could negatively impact their businesses.
“To add revenue back into the bill … Democrats added in the 1% excise tax on stock buybacks. They also extended limitations on deductions for business losses by two years.” (Duehren/Hughes)
“Schumer notched the wins without deep involvement from the White House. President Biden, who had campaigned for the presidency citing his deep experience cutting bipartisan deals in the Senate, ceded to him much of the responsibility for nailing down the details. The final negotiations with Mr. Manchin proceeded one on one in near-total secrecy.” (Hulse)
“Biden, who had his share of long nights during his three decades as a senator, called into the Senate cloakroom during the vote on speakerphone to personally thank the staff for their hard work.” (Fram/Mascaro)
“Even before the vote was final, Democratic lawmakers on the chamber floor rejoiced and cheered, shaking hands and hugging, as their Republican counterparts cast their votes and headed for the exits for a month-long summer break. Manchin made a beeline for Schumer’s desk, as the two men leaned their heads together and clasped their hands. Sen. BRIAN SCHATZ (D-Hawaii), a proponent of climate change provisions, broke into tears.” (Romm)
Klain, on Twitter: “Majority Leader @SenSchumer. That’s the tweet.”
Good Monday morning. Thanks for reading Playbook. Drop us a line: Rachael Bade, Eugene Daniels, Ryan Lizza.
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HOW CLOSE WE CAME — In a new New Yorker excerpt from their forthcoming book, “The Divider,” Susan Glasser and Peter Baker dive into top generals’ fears in the final months of the Trump administration that the president could try to use the military to remain in power. They have the resignation letter, never sent, that Joint Chiefs of Staff Chair Gen. MARK MILLEY drafted in June 2020.
Then he decided to stay: “‘Fuck that shit,’ he told his staff. ‘I’ll just fight him.’ The challenge, as he saw it, was to stop Trump from doing any more damage, while also acting in a way that was consistent with his obligation to carry out the orders of his Commander-in-Chief. Yet the Constitution offered no practical guide for a general faced with a rogue President. … ‘If they want to court-martial me, or put me in prison, have at it,’ Milley told his staff. ‘But I will fight from the inside.’”
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BIDEN’S MONDAY:8:30 a.m.: The Bidens will depart Rehoboth Beach, Del., for Kentucky, arriving in Chavies at 11:45 a.m.12:30 p.m.: Biden will take part in a briefing on the area’s flooding response at Marie Roberts Elementary School in Lost Creek.2 p.m.: The Bidens will visit with affected families and see the response in eastern Kentucky, and Biden will make remarks.3:25 p.m.: The Bidens will depart Chavies and make their way back to the White House by 5:50 p.m.Press secretary KARINE JEAN-PIERRE will gaggle on Air Force One on the way to Kentucky.VP KAMALA HARRIS’ MONDAY — The VP will meet with university/college presidents to talk reproductive health care access at 3:15 p.m.THE SENATE and THE HOUSE are out.
STEP INSIDE THE WEST WING: What’s really happening in West Wing offices? Find out who’s up, who’s down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider’s guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won’t find anywhere else, subscribe today.
PHOTO OF THE DAY
Maintenance workers power wash the exterior of the White House on Sunday in Washington, DC. | Sarah Silbiger/Getty Images
DEMOCRACY DIGEST — Bloomberg’s Ryan Teague Beckwith and Bill Allison have a major look at how officials in Arizona, Georgia, Michigan, Pennsylvania and Wisconsin could determine whether the 2024 election is stolen via political interference. They detect plenty of warning signs in a data-driven Election Risk Index. “The bumper-sticker version of what we found: The 2022 vote should be fine. … But the picture two years from now is shaping up to be much darker.”
— In Michigan, Trump-endorsed GOP A.G. contender MATTHEW DEPERNO breached voting equipment in a small county as he and a team sought to find evidence for baseless election fraud claims, Reuters’ Nathan Layne scooped. The state is investigating the incident and three others. Democratic A.G. DANA NESSEL asked Friday for a special prosecutor to take over the probe to avoid a conflict of interest whereby she’d investigate her political opponent, Heidi Przybyla reports for POLITICO.
— “In Wisconsin, G.O.P. Voters Demand the Impossible: Decertifying 2020,” by NYT’s Reid Epstein
IT’S JANUARY 2021 SOMEWHERE — Could control of the Senate hinge on a Georgia runoff for the second cycle in a row? The prospect is rattling many around the Peach State, as Sen. RAPHAEL WARNOCK’s lead in public polling mostly hasn’t hit 50% and a Libertarian candidate will join Republican HERSCHEL WALKER on the ballot, reports Brittany Gibson. “And at that point, Democrats concede, fatigue could become a factor as there have been near-nonstop political battles in Georgia over the last few years. … While Warnock is ahead in the polls, no one on his campaign believes the lead [will] last on its own.”
WHAT ADAM KINZINGER IS UP TO — The outgoing Illinois GOP congressman is launching a new effort to recruit and train “pro-democracy” candidates for local election offices and other positions across the country, Zach Montellaro scoops. Keep Country First Policy Action’s Country First Academy starts today, with “a particular focus on recruiting for local election official positions in counties, along with finding and training volunteers who staff polling places and count ballots. … The group will soon have field staff in several states ahead of the 2023 municipal elections, and it hopes to expand its program for the 2024 elections.”
THE WIZARD OF OZ — Pennsylvania Lt. Gov. JOHN FETTERMAN is using MEHMET OZ’s Hollywood ties against him in the Senate race — a reversal of the usual partisan dynamics when it comes to Tinseltown, reports Deadline’s Ted Johnson. (That’s despite the fact that Fetterman counts BARBRA STREISAND, DON HENLEY, CHRISTIAN BALE, MARK RUFFALO and JOHN LEGUIZAMO among his donors.) Fetterman has linked the Hollywood criticism to his attacks on Oz’s New Jersey ties; Oz is looking to take a page out of Trump’s celebrity playbook. Related read: “Fetterman Tries to ‘Weirdify’ Dr. Oz in Senate Race — and Builds Polling Lead,” Bloomberg
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DEVELOPING — Olivia Beavers: “SCOOP: NRCC Chair Rep. TOM EMMER is telling his GOP colleagues he [is] running for the whip position if House Republicans win in November, 3 sources tell me. Marks a big shift for him.”
THE LONG ROAD — Sen. TIM KAINE (D-Va.) is still suffering from long Covid — but despite his personal testimony, Dems haven’t been able to convince Senate Republicans to take legislative action on it, Alice Miranda Ollstein reports this morning. “In meetings behind closed doors and in public hearings over the last year, doctors, academic experts and patient advocates with long Covid have repeatedly laid out a series of demands for Congress to address the mounting crisis from several angles. They’ve been met, largely, with a collective shrug.”
Sen. JIM INHOFE (R-Okla.): “I have other priorities. We’re handling all we can right now.”
MANAFORT SPEAKS — In his first major post-prison interview, PAUL MANAFORT tells Insider’s Mattathias Schwartz that he makes no apologies for his actions — though he has changed in one respect: “What’s different … is my unwillingness to incorporate into my life people who have not proven themselves to be … honest with me.” With a memoir, “Political Prisoner,” coming out this month, Manafort “is eager to get back in the game,” Schwartz writes.
BEYOND THE BELTWAY
FIRST IN PLAYBOOK — Next week, Democratic mayors across the country will take part in a “Mayors Stopping Crime” initiative that aims to highlight their innovations to prevent violence, get guns off the streets and hold perpetrators accountable. More than a dozen cities will hold events, from San Diego to Stamford, Conn., between Aug. 15 and 21.
HAPPY MONDAY — “Scientists Fear We’re Not Ready for Nightmare New COVID Variant,” The Daily Beast
INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don’t miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY.
Caroline Kennedy and Wendy Sherman commemorated their fathers’ service — and pushed U.S. influence in the South Pacific — on Guadalcanal.
TRANSITIONS — Mary Collins Atkinson is now comms director for Rep. Mariannette Miller-Meeks (R-Iowa). She previously was deputy press secretary for Sen. Tom Cotton (R-Ark.), and is a Cory Gardner alum. … Trentqual Rhone is now press/staff assistant for Rep. Suzan DelBene (D-Wash.). He previously was a press assistant at Protect Our Care. … Zachary Krasner is joining Grassroots Analytics as its first-ever chief technology officer. He most recently has been at Bridgewater Associates.
ENGAGED — Brett Logan, director of U.S. market access and state government relations at the Alliance for Regenerative Medicine and a Trump CMS and Lamar Alexander alum, proposed to Emily Massey, a partner at Continental Strategy and a Trump DHS and CISA alum, on Saturday night on the Georgetown waterfront. They were introduced by mutual friends in the Trump administration. Pic
— Chris Bedford, a senior editor at The Federalist and founding partner of RightForge, proposed to Sarah Westwood, a politics reporter at the Washington Examiner and a CNN alum, on Thursday in front of their new house, after the moving truck left. They met eight years ago, when she was an intern at the Examiner and he was an editor at the Daily Caller. Pic
— Anthony Caputo, a research analyst at the Republican Governors Association and an NRCC alum, proposed to Rebekah Clark, a strategy consultant at Deloitte and a Trump administration alum, on Saturday night on a Waterfront rooftop. He surprised her with a prom-themed engagement party with a dozen close friends, recreating prom for her since she never had one. The couple originally met at Rocket Bar. Pic
WEEKEND WEDDING — Rich Edson, senior national correspondent at Fox News, and Elizabeth Zumwalt Harmon, a DHS alum, got married this weekend in Marrakech, Morocco. Pic … Another pic
WELCOME TO THE WORLD — Molly Cole, foreign policy adviser for Sen. Chris Van Hollen (D-Md.), and Enser Cole, director of finance at Sport Fair, welcomed Enser William Cole IV on Friday. Pic … Another pic
HAPPY BIRTHDAY: Defense Secretary Lloyd Austin … White House chief of staff Ron Klain … CNN’s Kylie Atwood … Virginia Heffernan … Ken Cook of the Environmental Working Group … Jay Gertsema … ABC’s Claire Brinberg … Tyler Bowders … PwC’s Emily Rogers … Jonah Seiger … Morning Brew’s Josh Sternberg … Samantha Cantrell of Rep. David Kustoff’s (R-Tenn.) office … George Tzamaras of the American Immigration Lawyers Association (62) … Jo Duchesne of Rep. Ted Lieu’s (D-Calif.) office … David Friedman … Mike Biundo … Catharine Cypher … Jackson Diehl … Hayley Matz Meadvin … Michael Toner … POLITICO’s Daniela Falvo and Matt Trujillo … POLITICO Europe’s Matthew Karnitschnig … Mike Dankler … Jeff Chu … CBS’ Lance Frank … former Michigan Gov. Jim Blanchard … Habib Durrani … David Bass of Raptor Strategies … Teach for America’s Joe Walsh … Marc Ambinder
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