Biden gets involved to help break Senate logjam

One of President Biden’s biggest selling points on the 2020 campaign trail was that he knows how Washington, and more specifically the Senate, works and could get things done.

On Friday evening he delivered when he helped break an eight-hour stalemate between centrist Sen. Joe Manchin (D-W.Va.) and other Democrats on extending unemployment benefits beyond March 14, when they are due to expire.

Under the deal, laid-off workers will receive $300-a-week federal unemployment benefits on top of their state benefits until Sept. 6. And the first $10,200 in unemployment benefits received in 2020 will be tax-free for households with less than $150,000 in annual income.

Democratic senators say Biden was “very involved” in trying to mediate. They say that Biden, who served in the Senate from 1973 to 2009, called Manchin directly to get him to support a compromise proposal backed by the rest of the Democratic caucus.

“President Biden has been very involved as you would expect him to be,” said a Democratic senator familiar with the negotiations.

The senator said both sides had been trading paper back and forth through Friday afternoon and characterized the talks as “delicate.”

The deal Biden helped craft extends weekly unemployment benefits to Sept. 6, which is a week longer than the Aug. 29 end date set by House-passed legislation. But the House-passed bill set weekly benefits at $400 a week, and progressive House lawmakers are likely to be angered by the benefit cut.

“The President supports the compromise agreement, and is grateful to all the Senators who worked so hard to reach this outcome,” White House press secretary Jen Psaki said in a statement following the announcement of the deal. “It extends supplemental unemployment benefit into September, and helps the vast majority of unemployment insurance recipients avoid unanticipated tax bills.”

“Most importantly, this agreement allows us to move forward on the urgently needed American Rescue Plan, with $1,400 relief checks, funding we need to finish the vaccine rollout, open our schools, help those suffering from the pandemic, and more,” she added.

The deal ends the weekly federal unemployment increase almost a month earlier than what Senate Finance Committee Chairman Ron Wyden (D-Ore.) and centrist Sen. Tom Carper (D-Del.) had agreed to Friday morning; they wanted to extend weekly $300 federal benefits to Oct. 4.

Now it looks like lawmakers will have to cut their August recess short and return to work before Labor Day to avoid the expiration of benefits in early September.

Democrats thought Friday morning they had 51 votes to pass the Wyden-Carper proposal, but Manchin derailed that plan around noon by signaling he would vote for a rival Republican amendment sponsored by Sen. Rob Portman (R-Ohio) to extend the $300 a week until July 18 instead of early October.

Unlike the Wyden-Carper deal announced Friday morning, the Portman amendment did not protect unemployment benefits received in 2020 from being taxed. 

One Democratic senator said “everybody thought there was an agreement” to extend unemployment benefits, but acknowledged “there was a miscommunication” with Manchin.

Manchin declined to comment early Friday evening when asked about his conversation with Biden.

Asked why Democratic colleagues were confused about extending unemployment benefits, Manchin said “I don’t know.”

Republicans on Friday accused Biden of twisting Manchin’s arm, essentially forbidding him from working with Republicans.

“I believe that to be true,” said Senate Republican Whip John Thune (S.D.).

Republicans say Manchin had already agreed to vote for the rival GOP amendment sponsored by Portman.

The impasse over how to proceed on unemployment benefits froze the Senate for more than eight hours after Senate Majority Leader Charles Schumer (D-N.Y.) left a vote on a minimum wage amendment open, giving him and Biden time to work with Manchin behind the scenes.

Manchin was spotted walking into Schumer’s office shortly after 7:15 p.m. Democrats then announced the deal with Manchin shortly before 8 p.m.

Senate Budget Committee Chairman Lindsey Graham (R-S.C.) accused Biden of breaking his campaign pledge to work with Republicans by pressuring Manchin not to vote for the Republican amendment on unemployment benefits.

“If President Biden is going to use his time to destroy bipartisanship, it’s going to be a long two years here,” he said. “I wish somebody would call up the president and say, ‘What’s going on in the United States Senate? What is it about Joe Manchin and maybe one or two others working with Republicans that makes you want to stop the entire process?’ ”

Republicans on Friday afternoon claimed they had enough votes to pass the Portman amendment with Manchin’s support.

“The problem has been that one of these amendments had more than 50 votes and the other amendment had less than 50 votes,” said Senate Republican Policy Committee Chairman Roy Blunt (Mo.).

“Democrats have been told, ‘No, you cannot work with Republicans on this amendment,’ ” he added.

Blunt said the Republican amendment on unemployment benefits would have saved $100 billion.

Sen. John Cornyn (R-Texas) said he heard that Manchin had committed to vote for both the Carper-Wyden deal and the Portman proposal.

“It sounded like he might vote for Portman and for Carper,” he said. “I don’t know how you do that and which takes precedence over the other.

“I’m just shocked this stuff wasn’t hashed out before,” he added.

Manchin declined to comment on the negotiations Friday until the deal was announced.

He later touted it in a press release as something that would enable “the economy to rebound quickly” and protect unemployed workers from “being hit with [an] unexpected tax bill.” 

Republicans say the $400-a-week benefit in the House-passed bill would create a disincentive for laid-off workers to return to the labor force.

One key element of the Manchin deal would offset the cost of forgiving taxes owed on unemployment benefits by extending a limit on tax breaks businesses can take on operating losses.

The deal would extend by one year the requirement that businesses spread out their claimed deductions on net operating losses. It was an important pay-for in the 2017 Tax Cuts and Jobs Act that was temporarily suspended by the CARES Act, which Congress passed a year ago.

Updated: 9:52 p.m.