The Four Ways Democrats Screwed Up the Build Back Better Negotiation
I don’t know if Build Back Better becomes law. It seems that if Democrats cut enough out of it, eventually Manchin will come on board and…
I don’t know if Build Back Better becomes law. It seems that if Democrats cut enough out of it, eventually Manchin will come on board and everyone will vote for whatever skeleton remains in order to save face. So I wouldn’t write the bill off for dead quite yet.
But regardless of what happens now, I think it’s hard to argue that the process hasn’t failed. The party wasted the entirety of 2021 on this bill and cut it, so far, by 50%, and still aren’t close to passage.
Everyone agrees Joe Manchin, Kyrsten Sinema, and a handful of House moderates are the proximate cause of this failure. By contrast, it’s highly unpopular to talk about how things went wrong further up the food chain. This makes sense: no one wants to antagonize the bulk of the Democratic Party, much less the party leadership, because they hold a lot of power.
But the reality is that the intransigence of Manchin and Co. was predictable. Despite this, Biden, Schumer, and Pelosi pursued a negotiating strategy that consistently maximized the leverage of people like Manchin and gave them many opportunities to wreck the bill.
There are four things that they got wrong:
FIRST ERROR: Democrats gave up their best leverage by passing the bipartisan bill. This is the obvious one, the one everyone saw coming. When Manchin and Sinema first proposed that Biden’s agenda be split into two buckets — one effectively titled “the easy stuff that Republicans agree with,” and the other effectively titled “the hard stuff centrists are skeptical about” — it was not hard to foresee centrists would try to pass the easy one and abandon the rest. Indeed, Biden and Pelosi assured us over and over they’d insist that the bills be tied together. But of course, in the end, they panicked and passed the easy bill, at which point it became much simpler for Manchin to walk away from the whole process. Why not? He’d already gotten most of what he wanted! It was a huge, predictable mistake, endlessly litigated already.
SECOND ERROR: Democrats negotiated the bill piecemeal, minimizing their bargaining power. Here is something you’d expect Democrats to understand: collective bargaining works better. When one negotiating party has a lot of leverage (like Manchin and Sinema did, since they could kill the whole agenda), you don’t want them negotiating with lots of individuals on the other side, one at a time. If they do, they can deploy their leverage in each individual negotiation, securing big win after big win. Instead, you want the other side to collaborate and speak to the powerful party with a single voice.
But in the Senate, Democrats seem to have done the opposite of this. Senators approached Manchin one-by-one, arguing with him about their own special issue priorities, and he seems to have just clobbered everyone, as you’d expect. This failure is mostly on Schumer and Biden, either of whom could have taken charge of the negotiations. (Schumer, instead of taking charge, struck a secret deal with Manchin that literally undercut everyone else in the party. Democrats probably should have sacrificed him Lord-of-the-Pigs style for this shocking derogation of duty, but instead, did nothing.)
THIRD ERROR: Democrats kept giving unilateral concessions, conceding cuts to the topline and eliminating programs, without getting anything in return. There’s a cliched movie bit where two people are bartering, that goes like this:
PERSON 1: “50 dollars.” PERSON 2: “10 dollars.”
PERSON 1: “40 dollars.” PERSON 2: “10 dollars.”
PERSON 1: “20 dollars?” PERSON 2: “10 dollars.”
PERSON 1: “11.50?!” PERSON 2: “Sold.”
The point of this bit is that Person 1 is a sucker who got taken. In a negotiation, one side should not give away a bunch of things without getting anything in return.
But this bit is precisely what happened with Build Back Better. Biden kept moving the topline figure for BBB downwards, cutting it from 3.5 trillion to 2.2, then to 1.9, then to 1.75. While this happened, Manchin gave up …seemingly nothing. It’s not that he was unwilling to move. Manchin finally allowed a topline figure of 1.75 trillion, higher than his original demand. In short, Manchin was clearly willing to negotiate — he just won the negotiation in a big way.
Now, without question, Manchin was going to require cuts to the bill, using his veto as leverage. But Biden should have only agreed to those cuts conditional on Manchin’s support, because Manchin can only veto the bill once. Instead, Biden just kept agreeing to lower the topline figure, without ever securing a commitment, and as soon as everyone had reoriented around the new figure, Manchin would make the same demand yet again. Watching Manchin cut the bill over and over was like watching a hostage negotiator conceding to paying five separate ransoms in a row, without ever getting the hostage back.
There’s a lot to say about this particular error. One is that it seems rooted in a particular comity-driven approach to negotiation that Biden subscribes to (and Obama disastrously subscribed to in his first term), where you make a deal by giving up a bunch of stuff in advance so the other guy likes you. It never works.
The second thing is Biden’s preemptive concessions are now causing knock-on problems. Manchin’s latest demand is that, because any CTC extension under his 1.75 trillion price tag must be short, the CTC extension should be cut entirely. But of course the 1.75 trillion price tag is itself a previous Manchin demand. If Biden hadn’t preemptively conceded to this price tag, Dems could try to resolve this tangle all at once, by saying Manchin must choose between a reduced CTC or a higher price. But Manchin has locked in a lower price tag, that’s a done deal, and now it’s just a fact on the ground that Dems have to deal with.
FOURTH ERROR: Centering Manchin by treating him like he holds all the cards. Throughout the Build Back Better negotiation, Joe Manchin in particular has been treated as if he is the King of America. His every preference, his every utterance is treated as if it determines the course of the law. He’ll say something like “I’d rather not see electric vehicle tax credits be so generous” and reporters frantically retweet it as if Manchin has a constitutional mandate to go through the bill and delete lines with a red pen.
But that’s not what Manchin has. As mentioned above, what Manchin has a single veto, which he can deploy one time. But if he deploys it, he causes massive damage to Joe Biden (who he supports), the Democratic Party (which he’s a member of), and the Democratic policy agenda (much of which he wants). In other words, Manchin’s veto comes at huge cost to himself, so while his leverage is strong, it’s far from total. And, anyway, “parties having leverage over each other” is just the nature of all negotiations— otherwise there’s no reason to negotiate in the first place.
Here, it’s instructive to consider how Republicans have approached close votes in recent years. Just like the Dems are experiencing with BBB, a handful of comparatively moderate GOP senators could have killed any Republican bill or flipped any vote. But Sue Collins and Lisa Murkowski and Bob Corker didn’t get to write the 2017 GOP tax bill to their exact specifications. Instead, McConnell opted for a very different approach: he advanced a bill that appealed to the vast majority of his caucus, and then he treated the moderates as fringe holdouts who would have to stand with, or against, the party. The holdouts did get some concessions. But in the end, they simply had to choose which team they were on.
This is a higher-risk approach and it failed during the ACA repeal. But it also maximizes the pressure on the holdouts — instead of getting the bill of their dreams, they’re presented with a fait accompli, and have to choose the least-bad option. Often, people don’t even know what the least-bad option is until the choice is forced on to them. Under pressure, people cave— just like Biden and Pelosi promised to couple BIF and BBB, and then caved a month later when they started to feel stressed about the bills being stuck in limbo.
You pressure people by sidelining them, making them feel powerless, forced to pick between bad options. But Democrats have treated Manchin not in a way that sidelines him and pressures him. Instead, they have consistently centered him and elevated him. They have gone to him hat in hand, pleading for his support.
It’s backfired terribly. Earlier this year, Manchin was suggesting he’d accept spending 4 trillion on Biden’s agenda. But over time, Manchin has clearly thought less and less about what kind of bill he’d grudgingly support, and more and more about what kind of bill he thinks is perfect. That is a direct consequence of a process that treats him as the final authority instead the most marginal holdout.