| Not even Santa Claus can satisfy the Democratic Christmas wishlist as their hopes to pass the Build Back Better package or a voting rights proposal by next week’s holiday were dimmed significantly on Wednesday. Talks between top Democrats and Sen. Joe Manchin (D-W.Va.) are on the verge of cratering, all but ensuring that the party’s nearly $2 trillion social spending and climate bill will not be passed by Christmas, a self-imposed goal of Senate Majority Leader Charles Schumer’s (D-N.Y.). As The Hill’s Alexander Bolton details, at issue is the Democratic effort to extend the child tax credit for one year. Instead, Manchin is proposing the idea of extending the credit for multiple years so that the proposal, which is likely to be extended by Congress in the future, is fully reflected in the Build Back Better bill, which is now officially projected to cost roughly $2 trillion over the next decade. “Manchin is trying to back out of a deal with the White House,” said one Democratic source familiar with the negotiations between President Biden and Manchin. “Manchin earlier agreed to a one-year extension of the child tax credit. They shook on it.” Extending the expanded child tax credit for ten years would cost $1.6 trillion, according to the Tax Foundation, which would nearly equal the entire cost of the colossal package as drafted by the House. Manchin also showed signs of boiling over on Wednesday. At one point, the moderate member railed at a reporter, calling him “bullshit” after being asked to confirm the child tax credit-related spat with the White House. “This is bullshit. You’re bullshit,” Manchin yelled at Arthur Delaney, a reporter for HuffPost, adding “I’m done, I’m done” as his voice rose (The Hill). Despite the Democratic appetite for the tax credit, one possibility that is likely not in the cards is a standalone bill to deal with it. Speaker Nancy Pelosi (D-Calif.) on Wednesday downplayed the odds of that taking place saying that she was not going to “let anybody off the hook” by nixing it from the Build Back Better bill (The Hill). “I think that this is called the legislative process. And we have our rules, then they have their rules. I'm not going to have a post-mortem on something that hasn't died. I think we will have legislation that will pass.” Pelosi said of the status of the multi trillion-dollar proposal. Upshot: A Christmas deadline was set after Democrats initially floated an unrealistic deadline of Halloween. Flashback: Remember this? Now, the question is: Can the party pass anything this big by the end of January? Even that seems like a high hurdle, some Democrats say privately. The Wall Street Journal: Democrats’ $2 trillion package stalls as Manchin talks make little headway. The New York Times: Democrats ready to punt social policy bill to 2022 as Manchin balks. Politico: “Going very poorly”: Biden can't nail Manchin down on Dems' bill. With passage of the Build Back Better agenda before next weekend likely not happening, Democrats turned their gears momentarily to the possibility of filibuster reform with the hopes of breaking a months-long stalemate on voting rights and election legislation (The Hill). Key word: momentarily. Those hopes were dashed hours later when Sen. Kyrsten Sinema (D-Ariz.) said in a statement that while she supports the elections bill in question, she will not consider doing away with the 60-vote threshold to advance it. “Sen. Sinema continues to support the Senate's 60-vote threshold, to protect the country from repeated radical reversals in federal policy which would cement uncertainty, deepen divisions, and further erode Americans’ confidence in our government,” a Sinema spokesman told The Hill. Politico: Sinema pops Democrats' filibuster trial balloon on voting rights. The Hill: Senate approves $768 billion National Defense Authorization Act. CNN: Biden says former Trump chief of staff Mark Meadows seems “worthy of being held in contempt” for failing to appear for an interview with the Jan. 6 committee. The Washington Post: Role as former President Trump’s gatekeeper puts Meadows in legal jeopardy — and at odds with Trump. The Hill: Schumer tees up nominations marathon as deal with Sen. Ted Cruz (R-Texas) elusive. 
© Associated Press/J. Scott Applewhite > Economy: The Federal Reserve is now two meetings away from ending quantitative easing this spring, after which interest rates may rise, Chairman Jerome Powell said on Wednesday (NBC News). The Fed board voted unanimously to wrap up its massive bond-buying program in half the time it initially anticipated, and projected three rate hikes in 2022 (The Hill). “The extent to which they will be separated in time is something we haven’t really discussed,” he noted, referring to the Fed’s separate “tools” of accelerating its anticipated tapering and lifting interest rates. “Inflation is more persistent and higher, and the risk of that remaining persistent and higher has grown,” Powell told reporters. “This is a strong economy,” he emphasized, when asked about inflation and challenges in the labor market. Powell said he was not commenting on fiscal stimulus enacted last spring or spending policies proposed by the White House and Democrats in Congress. “It’s really not our role. It’s really important that we stay out of that business,” the chairman added. During Trump’s term, Powell sidestepped commenting on the GOP Tax Cuts and Jobs Act beyond broad economic theory. By 2019, Trump publicly pressured the central bank to cut interest rates and underscored his displeasure with the chairman, telling The Hill during an interview that he had the power to fire him. Powell then gave a speech insisting the Fed would not let political considerations shape its efforts to foster maximum employment and stable prices. “The Fed is insulated from short-term political pressures — what is often referred to as our ‘independence,’” Powell said in June 2019. “Congress chose to insulate the Fed this way because it had seen the damage that often arises when policy bends to short-term political interests.” On Wednesday, Powell denied that the Fed’s pivot to faster tapering was in any way related to the timing of Biden’s Nov. 22 announcement that Powell would be renominated for a term that begins in February. “Absolutely nothing to do with it whatsoever,” the chairman said. Powell noted what he called unpredictable risks that could impact the U.S. economy, mentioning COVID-19 as one among many. “Just one month after initiating the taper, they have doubled the pace of withdrawal in an effort to conclude by March so they can raise interest rates sooner,” Greg McBride, chief financial analyst at Bankrate, told NBC. “The omicron variant is a wild card for both Fed policy and the overall economy. Until there is greater clarity about transmissibility and possible economic fallout, the Fed has left themselves room to reverse course should it become necessary.” 
© Associated Press/Amanda Andrade-Rhoades | 
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