Sen. Joe Manchin is losing patience with his Democratic colleagues over their landmark climate legislation, and the sentiment is reciprocal.
The West Virginia Democrat has spent weeks ramping up his criticism of President Joe Biden’s administration of the Inflation Reduction Act, a massive package that Manchin helped write as part of an agreement that rocked Washington last summer. Last week, he threatened to join Republicans in voting to repeal the law, as the House GOP is demanding in its debt-ceiling legislation.
Manchin’s remark took his colleagues off guard, even though such a repeal would be unlikely in Congress. It happened just as Biden was launching his reelection campaign, which is heavily based on the legislation’s climate and health-care provisions.
“I’m surprised he wants to repeal it. In an interview, Sen. Angus King (I-Maine), Manchin’s close colleague on the Energy Committee, said, “I think it’s one of his greatest accomplishments.”
The IRA is significantly less of a political bright spot for Manchin, whose reelection prospects are hampered by growing disfavour in his own state, which is fueled in part by his support for the law. Manchin has yet to declare his candidature, but a formidable competitor, Republican Gov. Jim Justice, entered the West Virginia Senate contest last week.
Democrats understand that Manchin’s reelection might determine whether they keep their thin 51-seat Senate majority in 2024. But they are growing tired of his attacks on their signature climate law, even though they have come to expect it and know there is little they can do to change his mind. In the 51-49 Senate, his votes against Democratic policy and Biden nominees have already hindered his party’s agenda.
Some Democrats are concerned that Manchin’s criticisms will cause public confusion about one of the law’s most contentious provisions: the $7,500 tax credits for electric vehicles. He has accused the Treasury Department of breaking the law by ignoring rigorous rules he drafted to require electric vehicles to be manufactured in the United States with American-made parts.
“It never hurts to be seen butting heads with the administration when you’re Joe Manchin, but I think this is genuine resentment over the fact that Congressional intent seems pretty clear, even if the statutory construction left room for Treasury to manoeuvre,” said Liam Donovan, a lobbyist with the firm Bracewell who previously worked for the National Republican Senatorial Committee. “And, given that he would not have been on board for the bill at all if this had been the understanding, it reads as a personal betrayal.”
Democrats argue that the administration has done all possible to balance the IRA’s dual aims of lowering the cost of electric vehicles while encouraging American manufacturing and jobs.
“Fifty of us agree that [boosting electric vehicle deployment] is a priority,” stated Sen. Martin Heinrich (D-NM) in an interview. “The law is the law. He can run for president if he doesn’t like implementation.”
In recent weeks, Manchin has joined Republicans in supporting resolutions opposing the administration’s energy and environmental policies, most recently on Wednesday when he was the only Democrat to vote with Republicans to overturn an EPA regulation on heavy-duty truck emissions.
Manchin also co-sponsored Sen. Rick Scott’s (R-Fla.) resolution to undo Biden’s suspension of solar power tariffs, which passed the House on a bipartisan basis Friday.
Manchin, the chairman of the Senate Energy Committee, has also expressed his displeasure with the administration by delaying the confirmation of a number of Biden nominees, including Richard Glick to chair the Federal Energy Regulatory Commission, Laura Daniel-Davis, Biden’s choice for assistant Interior secretary for land and minerals management, and Gigi Sohn as a Federal Communications Commission commissioner.
The White House has endorsed fossil fuel projects favoured by Manchin, including the Willow oil and Alaska LNG projects, as well as the Mountain Valley Pipeline, which would transport natural gas generated in West Virginia.
Manchin declined to comment for this piece, but his spokesperson, Sam Runyon, stated that his objections were due to the administration’s deviation from the bill’s goal.
“President Biden, then-Speaker Pelosi, and Majority Leader Schumer were fully in agreement with Sen. Manchin that the IRA was an energy security bill, and the legislative language is crystal clear,” she said. “The Administration continues to flagrantly violate the law in an attempt to replace Congressional intent with their own radical climate agenda that simply did not, and would not, pass.”
Some Republicans have expressed support for Manchin’s stance.
“Is it a game of fire?” Sure. Is Joe concerned? “I don’t think so,” remarked Manchin’s frequent legislative colleague while she chaired the Energy Committee, Sen. Lisa Murkowski (R-Alaska). “Good on him for calling the administration out.”
Murkowski observed that the climate bill appeared to be dead for the majority of last year until Manchin’s support helped Democrats to pass it on a party-line vote. The legislation includes $369 billion in incentives for sustainable energy and electric vehicles, as well as health-related provisions such as a cap on insulin expenses for Medicare recipients.
“They made a deal with him,” Murkowski explained. “And it was a difficult deal, and they wanted his vote, and they got it — at some political cost to him, as he would admit.” And now [the Biden administration] is attempting to reinterpret or interpret the measure in the manner in which they wanted it had been passed. That is their issue.”
In recent weeks, Manchin has regularly criticised Biden’s electric vehicle policy, including revealing his support for Republican efforts in Congress to remove EPA auto pollution limits aimed to accelerate EV adoption. He accused the administration of “lying to Americans with false claims about how their market manipulation to boost EVs will help American energy security.”
In remarks to the US Chamber of Commerce on April 18, he said, “I never wanted to give the electric vehicles a 75-cent credit, let alone $7,500.”
“Y’all broke the law,” Manchin later scolded Biden’s Energy Secretary, Jennifer Granholm, during a hearing on April 20, accusing the administration of “liberalising” the implementation of the tax subsidy to encourage electric vehicle sales — and warning that this method could send money and jobs to China.
Republicans are ready to capitalise on Democratic dissatisfaction with how the administration is carrying out the climate law. Republican senators, who unanimously rejected the bill, contend that it wastes money and that its dual goals — rapidly weaning the US economy off fossil fuels while reducing reliance on China for clean energy technologies — are nonsensical.
“Perhaps he’s looked at it [the IRA] more closely and realised it’s not what he thought it was,” Manchin’s Republican colleague from West Virginia, Sen. Shelley Moore Capito, said in an interview. “I can’t believe he’d be so naive.” “However, who knows?”
Other Democrats, however, claim that the administration is carrying out the law passed by Congress.
“Almost all of us who voted for this legislation and contributed to it wanted to supercharge EV sales,” Rep. Jared Huffman (D-Calif.) said in an interview. “Obviously, Sen. Manchin did not. He suspected he was destroying the EV business. And it’s driving him insane that it’s not working out.”
The EV tax credit negotiations were difficult from the outset.
After rejecting Democrats’ climate and social spending proposal as Build Back Better last July, Manchin and Senate Majority Leader Chuck Schumer quietly began negotiations. The electric vehicle tax credits were among the final issues they negotiated.
Manchin had previously slammed Democrats’ interest in subsidising electric vehicle sales, calling the proposal “ludicrous.”
Manchin, whose state is home to a non-unionized Toyota manufacturing plant, also slammed Democrats’ earlier idea to provide a tax break for electric vehicles manufactured by union employees. He described the proposal as “not American.” The version that became law did not include it.
In secret talks, Manchin, Schumer, and their staffs finally reached an agreement on electric vehicles, unveiling the renamed Inflation Reduction Act on July 27. It provided a credit of up to $7,500 for electric vehicles that met a tangle of severe rules on the countries from whence their battery materials and components were sourced. These rules have since caused a massive trade dispute with European governments, whose enterprises are barred from taking advantage of the incentives.
“He [Manchin] is completely opposed to the credit.” And when he wrote it, he sincerely thought no one would use it. As a result, he’s disappointed that only a few automobiles can use it,” said Sen. Debbie Stabenow, a Democrat from auto-heavy Michigan.
Heinrich said a clash with Manchin over execution was “inevitable” given the disparities in how Manchin and the White House characterised the end product, which Manchin sees as an energy security measure aimed to shore up all sorts of energy production. In the name of tackling climate change, Biden is using the law to press for a speedy transition away from fossil fuels.
Representative Pramila Jayapal (D-Washington), chair of the House Progressive Caucus, dismissed the notion of a schism within the Democratic Party.
“The majority of [the IRA] we are all together on,” Jayapal stated. “I believe he [Manchin] believes we should transition to renewable energy.” We probably have different ideas on how the transition should look and how we should get there. “
However, energy experts say the law did not give the Biden administration much leeway in developing regulations to fit its complex domestic content restrictions. Manchin believes the administration is abusing the latitude it has been given. He’s particularly irritated by the Treasury’s original three-month delay in establishing guidelines, which allowed electric vehicles to qualify for the tax credit without meeting any domestic sourcing requirements until mid-April.
When the Treasury eventually issued the advice in March, it provided some concessions to automakers concerned about the standards being unduly stringent, but the vast majority of EVs on the market were still ineligible for the credit.
Nonetheless, Manchin complained that the Treasury rules allowing foreign suppliers to share in the tax credit bounty were too lax.
He specifically targeted the Biden administration’s classification of some foils, powders, and other battery components. By designating the powders as “critical minerals,” rather than “battery components,” Treasury avoided imposing even stricter limits on automobiles eligible for the tax credit.
Manchin has also chastised the Treasury for allowing leased vehicles to qualify for full tax incentives as “commercial” vehicles, a loophole that gets past some of the law’s constraints.
A critical piece of guidance is still lacking: clarity on which firms’ cars may be prohibited from receiving credit due to their ties to China. The Treasury Department anticipates releasing that provision later this year.
“Manchin very clearly wanted to put deglobalization ahead of decarbonization,” said Kevin Book, managing director of the research firm ClearView Energy Partners. “He wants this stuff made here, and if that means delaying the transition, so be it.” Treasury is moving towards a faster transition.”
However, most Democrats disagree that Biden has disregarded congressional intent. They cite to figures that show the IRA has already resulted in at least $243 billion in investments in battery plants, electric vehicle manufacturing, and other green energy projects since Biden signed it into law in August.
According to the Department of Energy, at least $95 billion in private-sector investments have been announced across the United States’ clean vehicle and battery supply chain since Biden’s election, including $45 billion since the IRA was passed.
Heinrich acknowledged that it may be “politically expedient” for Manchin to claim that the IRA is not developing as planned.
“But the reality is that this legislation is working, and this administration is trying to manage both what we need to do long term, which is make all of this stuff here, but also build the runway to get there,” Heinrich explained.
