Finance

Manchin Shuts Down Latest Plans For New Tax Hikes, Climate Spending

Manchin Shuts Down Latest Plans For New Tax Hikes, Climate Spending

Sen. Joe Manchin (D-WV) has once again derailed the Biden agenda, telling Democratic leaders on Thursday that he won’t support new spending on new tax hikes or spending on climate measures, in what Bloomberg describes as a “potentially fatal blow” to Democrats’ ambitious economic agenda.

Manchin’s decision – which comes amid the worst inflation in more than 40 years at 9.1% – follows a year of negotiations within his party, and months before midterm elections that will decide the fate of the Democrats’ control over both chambers of Congress.

Three people familiar with the discussions say Manchin told Senate Majority Leader Chuck Schumer (D-NY) that he’s only willing to support lowering prescription drug costs and extending enhanced Obamacare subsidies – forcing Democrats to accept a much smaller package without most of their long-term ambitions.

His decision is a de facto veto of Biden’s hopes to revive the economic plan that fizzled last year, angering Democratic progressives who had been counting on sweeping policy wins. Manchin’s vote is pivotal in the evenly divided Senate, where Democrats need a united caucus to pass the economic package by simple majority under special budget reconciliation rules. 

Just days ago, Manchin and Schumer were negotiating over hundreds of billions in spending on measures designed to fight climate change, including tax breaks for renewable energy, electric vehicles and other clean power sources. The loss of those plans will be a bitter pill for many Democrats on Capitol Hill and at the White House. Solar stocks fell in early US trading. -Bloomberg

Manchin noted the horrendous inflation in his decision – slamming lawmakers for failing to heed his prior concerns.

“I was talking about inflation before it was even thought about,” he told reporters, adding “And now I’m more concerned than ever before.”

Manchin’s decision sent solar stocks down sharply in early Friday trading.

Congressional Democrats were crestfallen, to say the least.

“I’m not going to sugarcoat my disappointment here,” said Senate Finance Chairman Ron Wyden (D-OR), who had been in negotiations with Manchin about clean energy incentives. “This is our last chance to prevent the most catastrophic — and costly — effects of climate change.”

Sen. Sheldon Whitehouse (D-RI) demanded that President Biden issue an executive order to ‘address climate.’

“With legislative climate options now closed, it’s now time for executive Beast Mode,” he tweeted, adding “Free at last. Let’s roll. Do it all and start it now.”

What?

A Manchin spokeswoman said that Democrats need to accept “economic realities” that would only boost consumer prices.

“Political headlines are of no value to the millions of Americans struggling to afford groceries and gas as inflation soars to 9.1%,” said spokeswoman Sam Runyon. “Senator Manchin believes it’s time for leaders to put political agendas aside, reevaluate and adjust to the economic realities the country faces to avoid taking steps that add fuel to the inflation fire.”

Manchin’s latest roadblock comes just seven months after he killed Biden’s $2 trillion economic package, which killed a slate of progressive initiatives.

The death of the climate package, which at one point contained some a historic $555 billion on clean power, electric vehicles and resilience to global warming, would represent a major setback in the Biden administration’s efforts to confront global warming emissions. The president pledged last year that the US would cut its greenhouse gas emissions 50% to 52% from 2005 levels by the end of the decade.

As much as $320 billion in new and expanded tax credits for wind and solar power, nuclear plants, biofuels, advanced energy manufacturing and electric vehicles, would have cut global warming causing emissions by nearly 40% by 2030, according to Democratic estimates. Recently, Schumer had offered to Manchin a $375 billion package of energy and climate provisions as well as support for permitting changes sought by Manchin but Manchin said no. -Bloomberg

Environmentalists are aghast

“There truly aren’t words for how appalled, outraged, and disappointed we are,” said Tiernan Sittenfeld, a senior vice president with the League of Conservation Voters. “Senator Manchin had every opportunity to stand up for climate, jobs and justice, and save families money when they need it most, but instead he is choosing to stand with polluters.”

Also in limbo is a plan to levy a global minimum tax on companies, which Democrats planned to use a now-dead tax and spending package to bring them into alignment with major parts of that agreement which was negotiated by the Treasury Department and reps from more than 130 countries.

Lastly, as Bloomberg notes, “Democrats had also promised to increase IRS funding, by $80 billion over 10 years, as a way to help bring in more revenue to balance with costs for their plan. Manchin has voiced support for that in the past, though it’s unclear what the status of that will be now that the broader package appears to have come apart.”

Tyler Durden
Fri, 07/15/2022 – 10:14

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