Investors and analysts reacted quickly to the potential legislative defeat of President Biden's Build Back Better Act. Yet, history says it is too early to write off the passage of significant legislation because it defines a presidency.
In 1993, then-President Bill Clinton faced a similar fight over his budget bill, which included a mix of spending cuts and tax increases aimed to reduce the budget deficit by roughly $500 billion over the next five years.
Similar to today, Republicans were strongly opposed to the legislation, arguing it would do little to reduce the federal deficit and undermine the economy with a list of new taxes. Most Democrats, who had the majority in the Senate 56 to 44, expressed lukewarm support of the legislation but decided to support it only because it was the only viable alternative of doing nothing.
But the final vote was in doubt until Senator Bob Kerry (Democrat-Nebraska) ended weeks of negotiations by saying he would cast a vote in favor of the legislation. Senator Kerry felt the pressure of the moment, stating on the floor of the Senate, "President Clinton, if you are watching now, as I suspect you are, I tell you this: I could not and should not cast a vote that brings down your presidency . . . ,"
In the end, Clinton's budget bill passed the Senate by a vote of 51 to 50, with Vice President Gore casting the deciding vote. With the Senate evenly split today (50 Republicans and 48 Democrats and two independents who caucus with the Democrats), it would require a vote by Vice President Kamala Harris to pass the Build Back Better Act.
Senator Manchin finds himself in the same "hot seat." I would be willing to bet Mr. Manchin will ultimately reach a compromise with President Biden in early 2022 since he too would not want to be responsible for defeating defining legislation of Biden's presidency.