Marking the first year of his term in office, President Biden held a nearly two-hour press conference on Wednesday, January 19, 2022, that touched on everything including the possibility of a revamped Build Back Better reconciliation bill.

Since last December when Senator Joe Manchin (D-WV) pulled his support for the $1.7 trillion package, talks have stopped.  In Washington circles that has not stopped some observers from speculating on the possibility of a smaller package that could still get 50 Senate votes.  President Biden made that speculation public.

Biden singled out the environmental provisions responding to a question by saying, “Well, it’s clear to me that — that we’re going to have to probably break it up.  I think that we can get — and I’ve been talking to a number of my colleagues on the Hill — I think it’s clear that we would be able to get support for the — for the 500-plus billion dollars for energy and the environmental issues that are there — number one.”

While some congressional members rejected the phrase, “break it up” there is the potential to use the reconciliation from 2022 budget resolution for a smaller version. Even though we are four months into FY 2022, the reconciliation from last year’s budget process can still be used without creating a 2023 reconciliation although there are time and parliamentary hurdles that make it potentially very challenging.

If Senator Manchin still accepts the environmental provisions, what that leaves on the social program side is less clear.  There are several historic provisions in the current draft starting with the Child Tax Credit, expanded pre-kindergarten, universal child care, expansion of the Affordable Care Act, stronger prescription drug provisions for seniors, new in-home community-based long term care services, housing subsidies and many other items that could not all fit into a smaller deal.

The President said he didn’t want to negotiate with himself on what might come out of the current bill but when pressed by reporters on cutbacks he did seem to acknowledge he may not get two priorities, the CTC and free community college. Biden responded to a question by saying, “There’s two really big components that I feel strongly about that I’m not sure I can get in the package: one is the Child Care Tax Credit, and the other is help for cost of community colleges.  They are massive things that I’ve run on, I care a great deal about, and I’m going to keep coming back at…”

The congressional reaction, the day after the press conference was mixed.  Senator Manchin indicated that what his position was earlier on the reconciliation was not necessarily the case now and he said that he has not had renewed conversations with the White House. Prominent supporters of the CTC, including Senator Sherrod Brown (D-OH), Senator Michael Bennett (D-CO) have said they are not giving up on an extension of the CTC with Finance Committee Chair Ron Wyden (D-OR) saying he was going to “fight like hell for it.” That feeling was re-enforced by his House counterpart, House Ways and Means Chair Richard Neal (D-MA) who also said he was “not ready to throw in the towel” on renewing the 2021 version of the child tax credit expansion. Several suggested they were open to modifications such as reducing the credit for couples making closer to $400,000.

Where it goes from here is not clear, but the White House ideally would like to have a final reconciliation by the time the President gives his State of the Union address on March 1, 2022.