He’s bluffing.
Manchin wants blue state taxpayers to spend money on West Virginia really bad, and all he has to do is let blue state taxpayers spend money on themselves (and humanity) at the same time. Progressives in the house have no reason to cave and only spend money on West Virginia priorities. Blue states can tax themselves and spend their own money on infrastructure if it all goes down in smoke, but West Virginia can’t spend New Yorkers’ money all on their own.
If both bills die it hurts everyone, but it hurts Manchin the most. That’s why both bills won’t die. That is, unless a Democratic senator dies and is replaced by a Republican governor. That risk is the price of Manchin’s gambit, and why I hate his guts—but we still are best off working with him.
Manchin will make a deal with some token changes that are meaningless but get him in the news.