Inflation feeds unease over huge budget bill

WASHINGTON — Government reports on rising inflation and the potential costs of President Biden’s social and environment legislation raise fresh questions about the bill’s fate, with pivotal Sen. Joe Manchin again a central focus.

The moderate Manchin, D-W.Va., has spent months forcing Democrats to trim the 10-year, $2 trillion package, arguing it’s too expensive and at times citing growing inflation as a reason to slow work on the bill. On Friday, the Labor Department said consumer prices grew last month at an annual rate of 6.8%, the highest in 39 years.

A separate report from the nonpartisan Congressional Budget Office said that if many of the bill’s temporary spending boosts and tax cuts were made permanent, it would add $3 trillion to the price tag. That would more than double its 10-year cost to around $5 trillion. Democrats called the projections from the Republican-requested report fictitious.

Friday’s reports came two weeks before Christmas, by when Senate Majority Leader Chuck Schumer, D-N.Y., hopes to end months of talks and finally push a compromise bill through the Senate. The House approved an initial version last month.

With Manchin still seeking cuts in a measure that originally cost $3.5 trillion, the new reports at the least increased his leverage in a tortuous process that’s already seen several near-death moments caused by Democratic infighting. At worst, the numbers fueled worries that Manchin might reject the package.

Every Democrat in the 50-50 chamber will have to back the bill so Vice President Kamala Harris can cast a tie-breaking vote to approve it.

The political sensitivity of inflation and its impact on the Democratic bill, a collection of family services, health care and climate change priorities, was illustrated as leaders of both parties tried to spin the numbers to their advantage.

Democrats argue the legislation’s spending and tax credits for health care, children’s costs, education and other programs would help families cope with rising prices. Most of the bill is paid for with tax boosts on the wealthy and big corporations. Republicans say the legislation’s expenditures would further feed inflation.

Democrats limited the duration of many initiatives in their package to help contain the bill’s price tag. It’s an accounting move both parties have used to make their budget plans seem more affordable — even though they would like their proposals to be permanent and some may be extended because they are popular.

Democrats argued the estimated added $3 trillion cost was bogus because if they decided to seek any future extensions of their initiatives, they would propose savings to pay for them.