• Just a few weeks ago, Democrats' agenda had pretty much withered away due to inaction.
  • But now legislative and ballot wins have put new winds in the sails of the flailing majority.
  • Even with the latest victories, Democrats face an uphill battle ahead of the midterms.

It was only weeks ago that it seemed Democrats were destined to leave most of their domestic priorities behind in the face of internal party splits and fierce GOP resistance.

Then came a deal that caught most of Congress flat-footed: a surprise, 725-page bill from key centrist Sen. Joe Manchin aimed at reining in prescription drug prices, extending financial assistance for Obamacare, and establishing over $300 billion in clean-energy tax credits amounting to the largest climate package in US history.

It marks a turning point for Democrats after multiple failures and puts some wind behind the party's back ahead of midterm elections.

"A lot of people have been critical of the president in the last year and a half — in particular the last eight months, talking about his administration," Secretary of Labor Marty Walsh told Insider. "If you take President Biden's first year and a half, will be two years within the year, and look what he's accomplished, he's accomplished as much as any, or if not more, than most administrations ever to hold that office."

However, even as Democrats are on the verge of approving their biggest domestic victory yet, the party still faces an uphill battle to keep control of Congress in the November midterms. With many young voters and progressive lawmakers disillusioned with Biden's pared-back bill and inaction, what Democrats do next may help to decide whether voters struggling with rising prices rethink the first two years of President Joe Biden's presidency.

Democrats had been losing — now they're notching victories

After the March 2021 passage of the American Rescue Plan, which sent out new stimulus checks (and continues to put direct deposits into some Americans' bank accounts), extended unemployment benefits, and turned the child tax credit into a more generous monthly check for parents, the Biden administration was riding high.

But the Build Back Better package was meant to be a follow up that never came. Since then, inflation has soared, Russia started a war in Ukraine, and the Supreme Court struck down Roe v. Wade, erasing the constitutional right to an abortion. It all seemed to spell bad news for Democrats, who saw their already-slim chances of midterm victory sinking.

In July, Biden saw his agenda blown up for the second time. Climate spending was out. Tax hikes were out. 

It seemed like yet another nail in the coffin for what began as an ambitious list of priorities that would rewrite America's social safety net. When it was promptly struck down, confidence in Congress, Democrats, and Biden himself dwindled. 

Then came the deal

It seemed like almost an uncharacteristically strategic maneuver by the traditionally reticent Democrats: Manchin, a West Virginia centrist who had already killed Democrats' proposed spending packages twice, had crafted the Inflation Reduction Act of 2022 with Senate Majority Leader Chuck Schumer.

That deal came on the heels of a bipartisan package to revive America's physical infrastructure, and the also-bipartisan passage of CHIPS, a package meant to bulk up the US's semiconductor industry and stoke competition with China. The timing of Schumer and Manchin's deal — notably after those legislative victories — meant that Senate Minority Leader Mitch McConnell had lost his bargaining power.

Republicans turned then to Sen. Kyrsten Sinema, who had previously torpedoed Democrats' spending ambitions by pushing back on any tax hikes. As expected, she excised a tax targeting wealthy investors — but then signed on to the rest of the package.

It amounts to legislative whiplash, with Sinema suddenly holding the defibrillators for the once-dead Biden agenda. She might just shock it back to life — along with Democrats' still-slim chances of a midterm victory.

There are wins on the ballot, too

At the same time, voters are pushing back against GOP priorities at the ballot box. In Kansas, voters were presented with a referendum that would've gotten rid of the right to abortion in the state. 

The red state not only overwhelmingly voted no, but voter turnout surged — a potentially bad sign for Republicans who were banking on disappointed voters not to turn out for Democrats, as Insider's Grace Panetta reports.

The voters who did show up to shoot down that referendum weren't necessarily Democrats. Of the 19 counties that voted down the referendum, 14 voted for Trump in 2020

Democrats are taking it as a positive sign, with Senate Majority Leader Chuck Schumer saying it shows "winds blowing" in the direction of Democrats. Meanwhile, political consultants are scrambling to figure out what, exactly, this could mean going forward.

If Schumer is right — especially as the Biden agenda sees a remarkable turnaround — it might mean winds blowing just a bit more towards the flailing Democrats.

But the odds still aren't in Democrats' favor

When Manchin went back to revive Democrats' spending package, he had the looming midterms in mind.

Right now, Democrats' razor-thin majority in the Senate makes Manchin and Sinema's votes extra consequential. But the possibility of a continued Democratic Congress is still slipping away rapidly in the upcoming midterm elections.

The Inflation Reduction Act is, as the name suggests, aimed at reducing inflation. But that doesn't mean it will bring down prices immediately. Sky-high inflation is a bad sign for Democrats, since consumers have less disposable income — which Goldman Sachs analysts have said is the "strongest predictor of midterm election results." 

Polling also looks bleak for the Democrats, with Republicans still favored to win the House

The new package also moves away from progressive priorities like affordable child care, paid leave, and a higher minimum wage, showing that Biden still needs to acquiesce to the more conservative parts of his party if he wants to pass anything for the time being. That could be a roadblock for the young voters who turned out in spades in 2020 — and won the whole thing for Biden — but find themselves disillusioned with how much Democrats' priorities have been pared back. 

And, of course, this all still hinges on the big if: Democrats passing the package. The countdown clock is looming with a final passage expected in days.

"Now, obviously, the election season's coming up," Walsh said. Republicans are going to pick on inflation being high, he said.

He concluded: "What they can't ignore is that American workers are making more money. More American workers are back to work. And we have industries, quite honestly, that were lost under Republican administrations that are going to come back under President Biden's administration."

Read the original article on Business Insider

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