Leer en Español
Despite voting for the $3.5 trillion budget, U.S. Senator Joe Manchin of West Virginia will not support President Joe Biden and his party’s “Human Capital” plan to provide additional funding for programs historically supported by Democrats such as more funding for Medicaid, community and HBCUs.
In his recent op-ed in The Wall Street Journal, Senator Manchin explained that “some in Congress have a strange belief there is an infinite supply of money to deal with any current or future crisis, and that spending trillions upon trillions will have no negative consequence for the future. I disagree.”
Sen. Manchin’s main concern stems from the so-called “Inflation Tax,” which would come from the rising cost of living that he believes his party’s spending plan would cause.
Joe Manchin calls the $3.5 trillion budget “artificial”
As Manchin notes, the U.S. debt already exceeds $28.7 trillion, approximately 127% of GDP. More than $5 trillion has been spent on the pandemic and by July cumulative inflation was already hovering around 4.1%.
Yet, “Democratic congressional leaders propose to pass the largest single spending bill in history with no regard to rising inflation, crippling debt or the inevitability of future crises.”
For the senator, Congress instead of passing a new spending plan should focus on coming up with budget reconciliation legislation. Manchin also believes that before any decision is made, it should be determined whether or not the inflation experienced in the United States is transitory.
The West Virginia senator also warns that Congress should analyze the impact that certain existing government programs, such as Social Security and Medicare, are having on the fiscal deficit.
According to the Congressional Budget Office, government spending over the next 30 years could quadruple due to the interest cost of the growing fiscal deficit and secondly because of the cost of social security for the inevitably aging American population.
Medicare costs are expanding considerably, and by 2021 its costs are expected to exceed its revenue, and by 2026 the program could be completely insolvent, so Medicare benefits could be cut in the future.
Manchin believes that the growing U.S. debt is one of the most pressing problems for Congress today, while his Democratic colleagues’ $3.5 trillion spending plan is an “artificial number” with no technical rigor and “ignores the economic reality” of the country.
Without Joe Manchin, the Democrats will have serious trouble getting a majority
With Manchin’s opposition, Biden and the Democrats will have trouble passing the plan bill for which the $3.5 trillion was approved. Several Senators within the Democratic Party such as Kyrsten Sinema (AZ), or Independent Senator Angus King (MN), could join Manchin’s opposition to the Biden administration’s spending plan.
With such slim margins, the Biden administration cannot afford to lose the vote of members of its own party, as it knows that the entire Republican Party will vote against the piece of legislation.
The Republican Party shares Manchin’s concerns about both the debt and inflation, and also oppose the income tax increase on all Americans earning over $400,000 that would be passed if the $3.5 trillion plan were to go into effect.
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica