Inflation hit a 41-year high on Tuesday, as the consumer price index
accelerated to 9.1% in June. More from WSJ

That, in turn, affects what might be Biden’s last, best shot at a deal
on reconciliation. Sen. Joe Manchin (D-W.Va.) said the new numbers make
him “more cautious than I’ve ever been” in reconciliation talks, he told
reporters. “Everything needs to be scrubbed, anything that can be
inflationary.”

AP’s Alan Fram: “It was unclear what impact Manchin’s comments would
have on his closed-door talks with Schumer, which have shown progress
lately. But they suggested he believed the day’s inflation report
strengthened his leverage in that bargaining and, beyond that, in
winning enough Democratic votes to push any agreement through the
tightly divided Congress.” 

Which brings us to an emerging source of anxiety for Dems in
negotiations: Taxes. Democrats have long campaigned on raising tax rates
on the wealthiest Americans and large corporations — and Manchin himself
wants to use reconciliation to revisit the issue in the context of
deficit reduction. But now, Dems are agonizing over the potential
political pitfalls that come with raising taxes in an election year, as
Burgess Everett and Sarah Ferris write this morning.

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