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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