Clip: Democrats strike deal on climate change and health care

Jul. 29, 2022 AT 5:20 p.m. EDT

The range of President Biden’s political fortunes this week was on full display. While the president dealt with grim economic reports that showed a slowing economy for a second straight quarter, he was also handed key legislative victories that included a reversal by West Virginia Sen. Joe Manchin, who backed a $739 billion deal to tackle climate change, health care costs and other initiatives.

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Alcindor : This week, the range of President Biden's political fortunes was on full display. He dealt with grim economic reports and enjoyed surprise legislative wins.

On Wednesday, the Federal Reserve took another aggressive step aimed at tackling inflation. It increased interest rates by three quarters of a percentage point.

Then in a surprise move, Senator Joe Manchin of West Virginia announced he and Senate majority leader Chuck Schumer reached an agreement on President Biden's top domestic agenda items. This is a deal that had seemed dead for months. $739 billion agreement is named the Inflation Reduction Act. They say it taxes climate change, increases taxes on the wealthiest corporations, lowers health care costs, and fights inflation.

Sen. Joe Manchin (D-WV) : This is a good piece of legislation. This is not American or Republican. It's an American legislation. It really is.

Alcindor : But Democrats weren't able to enjoy that good news for too long. On Thursday morning, new numbers showed last quarter the economy shrank by 0.9 percent. And had a news is making people worried even more about a potential recession.

McCarthy : Do Democrats really believe that spending hundreds of billions of tax dollars right now while pursuing and punishing rich investments in the long run will lower inflation?

Alcindor : Joining me to discuss this and more, Jonathan Lemire, White House bureau chief for "Politico" and host of MSNBC's "Way Too Early". He is also the author of the new book out this week "The Big Lie: Election Chaos, Political Opportunism, and the State of American Politics After 2020".

Thank you, Jonathan, for staying up with us.

We also have Ayesha Rascoe, host of NPR's "Weekend Edition".

And joining me at the table, John Bresnahan, co-founder of "Punchbowl News", a political newsletter that we're all watching and reading, and Amara Omeokwe, economics reporter for "The Wall Street Journal."

Thank you all for being here.

When I saw this week happening, I was like where are you? And could she come on the show? Because so much going on, right?

You told our producers that the guiding -- driving theme of this week was whether or not we were in a recession. President Biden has been saying we're not in a recession. But, of course, the GOP has been saying we're in a Biden recession.

So, ultimately, who decides of we're in a recession and practically what does that mean?

Amara Omeokwe, Ec onomics Reporter, The Wall Street Journal : Well, the reason why we have mixed messaging on whether or not we are in a recession because there is no precise definition of what a recession is. So you have this common short-hand definition of two quarters of economic contraction which we have now. The GDP figures are showing that.

But there’s also this official nonprofit academic group, the National Bureau of Economic Research, they are the ones who make the official declaration of a recession and they have not called that yet. And they often don't call recessions in real time. They usually do that sort of after the recession has already begun.

And what the Biden administration is arguing is that that academic group look at a wide range of factors when they're considering whether or not we're in a recession. They look at the labor market. They look at household balance sheet. They look at things like that.

And when you look across the economy, there are still some signs that things are going well. But, of course, there are other signs that things are slowing down. And so there's really that tension there.

Alcindor : And you talk about the tension that's there, there are a lot of economic developments that you just said. The GDP, the Fed hikes. I’m wondering what you think about sort of -- a regular American who is watching all this, wondering what's most important and how does that impact every day Americans who are just trying to survive, what would be the answer?

Omeokwe : Well, Americans overwhelmingly say that they are very concerned about inflation. They're concerned about the higher prices they're seeing for everyday staples like food, like gas, like rents. A lot of Americans are feeling that pain.

And we see the Federal Reserve responding as you said sort of ratcheting up their response to try and bring down inflation. That by far is going to be the most important factor in the months to come about where inflation goes and where the economy goes. And part of what's driving these recession fears is that what the Fed is doing could slow the economy to the point where we do see a significant economic slowdown where we do see a recession.

Now, the Fed has said they are trying to avoid that. They’re trying to cool inflation without causing recession. But there is some fear that they won't be able to pull that off.

Alcindor : Yeah. And, you know, talking about pulling things off, John, this was a big week in Congress. I was shocked when I saw that this deal, this appears -- and want to say the deal appears to be stricken because sort of couch things I’ve learned that from my friends at "Punchbowl News" that nothing is done until it's done.

But tell me a little bit about what you're hearing from both sides, Democrats and Republicans, about this reconciliation deal and its significance.

John Bresnahan, Co-Founder, Punchbowl News :Yeah. You had it in your lead-in, Senator Manchin and Senate Majority Leader Chuck Schumer inked a $740 billion agreement. It's not finalized. It's still being reviewed.

There -- has to go through a technical review process and then the Senate will take it up next week and start voting on portions of it. There will be amendments. There will be a real long process to -- going to take a couple of weeks to get this through Congress. Maybe they finish it in the Senate next week and maybe the week after and the house comes back.

But this was a shocker. We didn't see it coming. Manchin had walked away from some negotiations for the second time just recently.

But he kept saying he -- you know, I’m still at the table and still at the table and he would walk by us in the Capitol, OK, you're still at the table. But we didn't believe him.

I talked to him from 20 minutes the other night. He just said you know, he really wanted to make a deal. He had always wanted to make a deal and he knew what everyone was saying about him. And he was completely aware of what progressives and Democrats were saying about him.

But he never felt he had gotten in the place but he gave credit to Schumer and Schumer does deserve credit. He stayed with him. Even when the White House was fed up with Manchin and President Biden, you know, had -- was not happy when Build Back Better fell apart but Manchin got to a place where he thought there could be a deal and comfortable with what he'd seen and he feels like the country needs this kind of deal right now.

Alcindor : And a quick follow you mentioned Build Back Better. What's the name change? What's in that?

Bresnahan : Well, you know, what's funny because we were calling it, we are -- we had nicknamed this build back Manchin and he didn't like that at all. So, he -- they’re calling it the Inflation Reduction Act.

Alcindor : This is basically the Build Back Better act?

Bresnahan : No, it is not. There are elements of it. There’s Medicare prescription drug negotiations. There is some corporate tax increases, or corporate minimum tax. There's three years of Obamacare subsidies.

There's a huge investment in climate change and energy credits. There's some very interesting energy tax credits on that. There's something on -- carried interest, this is for very wealthy money managers. They --

Alcindor : Yeah. So, a very big bill with a lot of stuff in it.

Bresnahan : Yeah, huge.

Alcindor : And, Jonathan, of course, I have to come to you. What's the White House strategy when you think about the fact that President Biden was at the podium, at the White House saying this bill is going to reduce inflation?

Jonathan Lemire, White House Bureau Chief, Politico : Well, they know that inflation is still top of mind for most Americans. And probably still the defining issue heading into these mid-terms in November. And you just laid out there the mixed economic picture we have in this country right now.

But the White House, let's just put their -- they're cautiously optimistic, cautiously gleeful at the possibility that they can get this bill done. As John just said, the president was so frustrated with Joe Manchin when he blew up the process back in December and did so on Fox News which really rubbed a lot of people on the West Wing the wrong way. And certainly, the White House never quite gave up hope but they deferred to Schumer here.

The president took -- was hands off. Much like with the gun legislation that got done a few weeks ago, thinking his presence might be a problem even at times. Schumer and Manchin were the lead on this. But Schumer stayed in close touch with the White House as it went.

And they were so very pleased that they were on the precipice of getting this done. And obviously we're still looking at Senator Sinema of Arizona who seems to pride herself in being an enigma and she has not yet committed to support this legislation. But if it does go through, not only does it give Democrats something tangible to run on going into this November, but it changes the fortunes for this president as well who was just about a year ago when the Afghanistan withdrawal went poorly, and the delta variant showed up, that at that point, President Biden had a really strong first six or seven months in office and things went off the rails and the White House has struggled to find its footing since.

But this would be a significant win, along with the bipartisan infrastructure deal, along with that first COVID relief package, and suddenly aides are saying the entirety of the presidency so far needs -- would be transformed.

Alcindor : Yeah. And Ayesha, I want to come to you because Jonathan says the White House is cautiously gleeful. When you look at the American people and you look at the polls, they're not cautiously gleeful. What are you hearing from your sources about what everyday Americans are feeling in this economy and how this legislation is -- this deal might change that?

Ayesha Rascoe, H ost, "Weekend Edition Sunday" , NPR : well, you know, every day Americans and we talked to a lot of them on "weekend edition" about how their prices are going up, whether it's for gas, or whether -- you know, it's their energy bills, all of these things, they're feeling the strain. Like they want to know -- they're having a hard time getting by. They're working multiple jobs. They're trying to figure out how to make it and they feel like they can't.

I think this bill is going to be a very big deal if it passes for Biden's political future. But the thing of it is that it's going to take time for these things to be implemented, for them to make a difference. Whether they make a difference before the midterm is really unclear. And it's not clear that it will make a difference in people's pocketbooks immediately. And that's what they want. They want relief.

Alcindor : People want relief, Amara, as Ayesha just said. How much power -- how much influence can the White House and Congress really have on inflation?

Omeokwe : Fiscal policy can do things at the margins so the initial analysis about this Inflation Reduction Act does say that it could reduce inflation somewhat. Not a lot. And that it won’t happen quickly as Ayesha was referencing. It's not something that’s going to happen before the midterms. It’s not likely something that’s going to happen in the short term, maybe in 2024, and after.

And that shows again that the Fed really is the major player here.

Alcindor : And when you think about major players, John, I also think about senator Sinema. Jonathan got at the fact she hasn't been onboard. What are you hearing whether this deal will become an actual bill and agreement that will end up being signed by President Biden?

Bresnahan : You know, Manchin told me he had spoken to Sinema about this. He wasn't speaking for her. He thinks she could be in a good place on this.

She's not saying anything. She plays this very close to the vest. Sinema is -- she's a wonk. She will get into this. She’ll get into -- the folks I talked to who talked to her about this, senators, and House members, they -- you know, she'll get into the nitty-gritty on this and really look at it.

She doesn't like tax increases. That was her big problem with the Build Back Better. So this is going to be -- it's going to be an issue for her. We may see some tweaking on this. I’m not sure. We may -- what if Sinema came back and said I can support this, you know, they’d had to work it with Manchin but Sinema is now the key vote.

Alcindor : And, Jonathan, Sinema being the key vote you wrote this amazing lead that caught my attention in "Politico". You said somehow, some way, Joe Biden is back in the game. Can you talk a bit more about that given what John just said?

Lemire : Yeah. Certainly, it’s not done yet. But if this were to come to be and if Biden perhaps even plays the role of a closer here, it would be a significant win for this White House. This is -- as -- a moment ago, the string of really tough luck for this president, as well as mistakes made along the way. It's been a string of bad news here.

And for instance, he has received high marks from both sides of the aisle for his -- the way he's rallied the world to help Ukraine defend itself against Russia. But that's not getting him any votes at home. Americans don't vote on foreign policy.

And on domestic issues, Democrats, you know, really facing some headwinds here. We see that in the polls. But if this can be a win, and it should be -- White House aides were noted the timing that it came to be just hours after President Biden ended his COVID isolation and seems to have beaten the virus without much trouble, that it could be the start of a new chapter for him.

That maybe we’ll start seeing his poll numbers go up and point to a first year and a half and will be two years with some pretty sizable accomplishments. That can match up with some of his Democratic predecessors first two years as well.

Alcindor : And talking about sort of a new chapter, Amara, I want to come to you, a key part of maybe starting a new chapter will be gas prices. The White House has been saying they're coming down and they're coming down. Others say it's still high.

What's your understanding of the way forward what's next especially when it comes to gas prices?

Omeokwe : The question is will we continue to see declines? I mean, if you talk to administration officials, they certainly say that a potential risk for the economy in the months to come is the potential for energy prices to go back up.

And so, what they've been working on on the international stage with international allies is trying to implement this cap on Russian oil. Essentially trying to, you know, keep global oil supplies high while limiting the revenues that Russia receives from its sales of oil. But those negotiations are complex and ongoing right now.

So you know, the question is will the reductions that we saw continue? And it's -- still to be determined.

Alcindor : And we only have 30 seconds because I want to get -- John, Chips passed. The Congress maybe is working?

Bresnahan : You know, it’s remarkable. Jonathan was talking about it.

I mean, Biden has -- you know, if they get this reconciliation bill, he has a pretty decent record for 50-50 Senate and a four-vote margin in the House. Chips passed. They got a $280 billion bill and not going to help anybody right now but in the long term this could be good for the country.

Alcindor : Yeah. Well, we'll have to keep talking about the economy but thank you, Amara, for joining us and for sharing your reporting.

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