Sen. Joe Manchin III is very worried about the cost of passing President Biden’s agenda. But what about the cost of not passing it?
Manchin’s new moves reveal the folly of arbitrary centrism. This posture is essentially that any effort to restrain liberal governance is an inherent good, with no serious acknowledgement required of the real-world trade offs it entails.
Manchin has told the White House that the expanded child tax credit (CTC) must be packaged with a work requirement and be capped at family incomes of around $60,000, Axios reports. This would dramatically downsize current policy, which temporarily expands the CTC to $300 per month for most American families.
Separately, Manchin’s opposition to the bill’s clean energy program will likely mean it will be jettisoned, according to the New York Times. This policy, which would reward power companies that transition to clean energy sources and penalize those that don’t, is widely seen as critical to securing our decarbonized future.
To satisfy Manchin and fellow spendophobe Sen. Kyrsten Sinema (D-Ariz.), Biden has proposed a reconciliation spending target of around $2 trillion. This has Democrats scrambling to chop down the package from its original $3.5 trillion.
This is necessary because Manchin, who fears deficits and inflation, has drawn a line at $1.5 trillion. But that appears arbitrary: Manchin has even suggested to colleagues that he doesn’t particularly care which progressive priorities get jettisoned; he just wants to see some of them gone.
In other words, Manchin and Sinema don’t begin by saying: “Here’s what we need to do for the country. How should we pay for it?”
Instead, they declare at the outset that we must spend much less than whatever liberals want to spend, and that liberals must junk major priorities to meet that demand. But the senators remain maddeningly vague about what programs they themselves will or won’t support.
Manchin’s empty ideology
The arbitrary nature of this is captured in Manchin’s CTC demand. Current policy temporarily expands the CTC to poorer families and grants it to families making up to $150,000, making it a near-universal program. Manchin wants to impose a work requirement and means-test it to exclude those making more than a far lower threshold.
Manchin justifies such demands by warning against becoming an “entitlement society.” In this frame, the more we spend on things like the CTC and health care subsidies, the less incentivized people are to seek “rewarding” work. Fewer entitlements good; more entitlements bad.
The work requirement and means testing meet this ideological commitment. But the entire frame is wrong. The expanded CTC is empowering: It enables people to have families despite material constraints. It also provides a disproportionate boost in purchasing power in rural and less populous areas — because they tend to have more poor people and larger family sizes relative to population — potentially invigorating stagnating non-metro areas.
One is West Virginia. A recent Niskanen Center study found that it’s in the top 10 in the boost in purchasing power the expanded CTC provides as a percentage of state GDP.
What would happen in West Virginia under his changes? I asked Niskanen what its model shows, and the results are stark: The number of children benefiting would be cut by as many as 190,000, and the state’s residents could lose more than a quarter billion dollars in annual purchasing power.
Niskanen policy director Samuel Hammond calls Manchin’s position “performative austerity,” and points to a deep perversity. The work requirement is supposed to avoid fostering dependency. As it is, such a requirement is misguided: People need the CTC not because they are unwilling to work, but because children impose additional costs.
But beyond this, Hammond notes, means testing the program might create more dependency by creating incentives not to strive for a higher income, making it more like the sort of welfare program Manchin fears.
“If Manchin is worried about dependency, he should see the value in having the CTC be relatively universal,” Hammond told me. “Narrowly targeting the credit to the lowest income families risks creating a stigmatizing poverty trap.”
Similarly, Manchin wants to avoid sapping individual initiative. But downsizing the policy’s boost in purchasing power could undermine how empowering it might prove in stagnating areas by generating demand, and with it, more opportunity.
“The CTC expansion represented an influx of nearly $100 billion in new purchasing power for households with children,” Hammond said. “It has helped boost local economies, particularly in rural states with weak demand. Under Manchin's proposal that would be cut in half.”
The blindness of arbitrary centrism
Manchin’s effort to downsize Biden’s climate agenda would also mean huge downsides. The Times reports that West Virginia’s geography and topography means the state’s infrastructure faces unusual risk levels from extreme weather events.
More broadly, experts say killing the centerpiece of Biden’s climate agenda might badly weaken his hand at this fall’s climate conference in Glasgow. That could deal a setback to U.S. efforts to lead the world in averting long term catastrophe.
In both cases, the primary impetus seems to be mainly about doing less of whatever liberals want to do. But this will impose costs that will likely be much worse than those Manchin worries about. Alas, the ideology of arbitrary centrism is blind to these trade offs.
