Inside secret Manchin-Schumer deal: Dems shocked, GOP feels betrayed

West Virginia Sen. Joe Manchin (RW.Va.) and Senate Majority Leader Charles Schumer (DN.Y.) reached their deal on a major tax and climate package Tuesday night, but kept it secret — giving Democrats just enough time to pass a $280 billion chip-and-science bill that Republicans would otherwise have blocked.

The announcement of the deal, which would generate $739 billion in new tax revenue, fund a slew of new climate provisions and cut $300 billion from the federal deficit, came as a complete surprise to their Senate colleagues.

“I would say it’s somewhere between a surprise and a shock,” Sen. Chris Murphy (D-Conn.) said after attending a special caucus meeting Thursday morning where Schumer explained the deal.

This was all the more surprising given that less than two weeks earlier, talks between Schumer and Manchin had dramatically collapsed, when Schumer announced he would proceed with a scaled-down budget reconciliation bill that included only ‘prescription drug reform and a two-year period. extension of expiring grants under the Affordable Care Act.

Manchin admitted Thursday morning that he and Schumer had a heated argument July 14 when the Democratic leader accused him of “walking away” from a deal after months of negotiations.

“It got a little warm and heated if you will,” he said.

“He said you walk, you’re not going to do this or that,” Manchin recalled. “I said, ‘Chuck, I’m not straying from anything, I’m just being very careful. West Virginians can’t afford the higher prices. They cannot afford higher gas prices, higher food prices.

Manchin said the talks broke down due to his reluctance to enact a major tax and climate bill after the Bureau of Labor Statics reported on June 13 that inflation hit 9.1% in June. compared to the previous year.

Manchin said Schumer called him out on the deal but insisted he never did.

“I’ve never backed down in my life and never left,” he said.

Manchin said he ran into Schumer again the following Monday and their anger cooled by then.

“On Monday we ran into each other again. I said, ‘Are you still upset?’ He said, ‘I’m very discouraged.’ I said, ‘Well, you shouldn’t be. Something positive could be done if we all want to work rationally,” Manchin said, recounting the key moment.

He said their teams started working together in earnest the next day, Tuesday, July 19.

Manchin said his staff and Schumer’s staff took the things they were working on before and “started restructuring that.”

They finally reached an agreement on Tuesday evening, acknowledging that they had to announce the package on Wednesday if it had a chance of going through before the scheduled start of a long summer break on August 6.

“Tuesday night everyone – there weren’t that many of us – those of us who might have had disagreements, finally came to an agreement,” he said. “We had the text pretty much lined up in that arena. This is why the text was finished on Wednesday. On Wednesday morning, it was confirmed to be a hit.

The timing happened to line up perfectly with Schumer’s plan to hold a vote on final passage of the flea and science bill on Wednesday at noon.

Republicans who voted tens of billions of dollars for the national semiconductor manufacturing industry and the National Science Foundation were outraged and felt betrayed.

Sen. John Cornyn (R-Texas), a key player in passing the flea and science bill, said he received “private assurances from certain Democrats, including the Chief of majority in the Senate that tax and climate provisions were off the table,” which Republicans say would be a prerequisite for moving the flea bill.

Cornyn went to the Senate on Thursday afternoon to protest the secret climate and tax accord.

“How can we negotiate in good faith, compromise if necessary, and get things done together after the Majority Leader and the West Virginia senator make a stunt like this?” he said with increasing exasperation. “To look you in the eye and say one thing and do another is absolutely unforgivable.”

Manchin on Thursday insisted that he and Schumer did not take a “quick shot” at Republicans when announcing the deal Wednesday afternoon.

“No, you know, I sure hope they don’t feel like that.” I mean, I understand they are, but I don’t know why,” he told reporters on a conference call.

Schumer told reporters Thursday afternoon that he and Manchin unveiled the legislative text and summaries of the agreement as soon as they completed it.

“Due to the length of the parliamentary birdbath, we wanted to get this done as quickly as possible,” he explained, referring to the work officials will do to determine whether the package can pass under a Obscure budget rule used to avoid a GOP filibuster.

Schumer noted that talks with Manchin broke down on July 14 but that Manchin “came to visit me” the following Monday, July 18.

“Manchin asked to meet me on the 18th and he said, ‘Can we work together and try to prepare an invoice?’ I said as long as we finish it in August, we won’t wait until September,” he said.

Manchin said his staff took the lead at that time.

“It was me and my team, and then we worked with Schumer’s team. My staff would drive it, we would write the invoice. Schumer’s staff would review it, we would negotiate,” he told West Virginia radio host Hoppy Kercheval on Wednesday morning.

He said his staff cut about $400 billion to $500 billion from other revenue-generating tax reforms in the bill.

“There was a lot more revenue in there before that,” he said, explaining how the bill changed after he and Schumer blew themselves up.

On Tuesday night, they agreed to set a minimum corporate tax of 15% for companies with profits over $1 billion, strengthen tax compliance enforcement by the IRS, and close the tax loophole. deferred interest which allows asset managers to pay capital gains tax rates on income earned. profitable investments.

Manchin kept President Biden on the sidelines during negotiations last year between Manchin and the White House that ended in failure and public recriminations after months of fruitless talks.

“President Biden was not involved,” he told West Virginia MetroNews.

“I wasn’t going to bring the president in. I didn’t think it was right to bring him in. This thing very well might not have happened at all,” he said, explaining that he didn’t want to involve the president in discussions of the case fell apart again.

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