When Joe Manchin announced his opposition to the Build Back Better Act last weekend, he offered two primary justifications. The first was that budget gimmicks concealed the legislation’s true cost: If all the bill’s temporary programs were extended, then it would effectively increase federal spending by $4.5 trillion over the coming decade, far more money than it would raise in new taxes. In the West Virginia senator’s estimation, this was an irresponsible sum to spend on new domestic initiatives. After all, the federal government already has a “staggering debt of more than $29 trillion,” inflation is driving up Americans’ cost of living, and geopolitical tensions threaten to force Uncle Sam to muster (even) higher levels of defense spending.
While morally dubious and economically specious, these complaints were familiar and had some real basis in fact. As I wrote earlier this week, the House version of Build Back Better really is chock full of budget gimmicks. And Manchin reiterated his opposition to those gimmicks incessantly over the past five months. The basic issue is this: When the Democratic leadership agreed to slash the top-line cost of Biden’s initial plan by 50 percent, at the request of Manchin and other moderates, they retained almost all of the original proposal’s programs. To resolve the math problems this created, they imposed stricter means tests on the policies, made them less generous, and/or set them to expire before the decade’s end. Yet the Democratic leadership continued to cast these now-temporary programs as “transformative” changes to the American social fabric, insisting that they would ultimately become permanent, as Congress would feel compelled to extend them before their expiration.
To the extent that Manchin’s anxieties about excessive federal spending were sincere, this arrangement did little to address them. And it also left many of the surviving programs deeply dysfunctional. Several progressive commentators argued that a bill comprised of a smaller number of permanent, well-funded programs would be superior on the merits and more in keeping with the spirit of Manchin’s demands.
Nevertheless, the White House reportedly held the line on the “many temporary programs” model in negotiations with Manchin. And it did not immediately accept a $1.8 trillion counteroffer that the West Virginia senator submitted last week, which included funding for a permanent pre-K program, an Affordable Care Act expansion, and green-energy subsidies.
All this makes an eventual compromise between Biden and Manchin seem eminently possible. Democrats have already given up on enacting the full Build Back Better agenda. So long as the core of the bill — a half-trillion-dollar investment in a green transition — is retained, why not let the Senate’s most valuable Democrat pick his favorite items off the president’s menu of social-welfare expansions? Can’t do them all properly anyway.
Alas, there was another justification in Manchin’s statement denouncing the existing version of Build Back Better last Sunday — one that was new and potentially fatal to the prospects of any future compromise.
In his statement, Manchin wrote that the existing bill would “risk the reliability of our electric grid and increase our dependence on foreign supply chains” by forcing decarbonization to proceed “faster than technology or the markets allow.”
The senator had not raised serious objections to Build Back Better’s climate provisions in months. Back in October, Manchin had effectively vetoed Biden’s Clean Electricity Performance Program (CEPP), a policy that would have required all electric utilities to draw 80 percent of their power from non-carbon sources by 2030. Utilities that complied with this standard would have enjoyed federal subsidies; those that defied it would have paid fees, which would then have been invested in green-energy technology.
That was the last big “stick” in Biden’s climate agenda. And its removal seemed to appease Manchin, who’d long suggested that he opposed measures that would penalize fossil fuels but could live with ones that rewarded clean energy. Given that Manchin is a coal magnate who represents one of America’s reddest states, this was a pretty decent bargain for climate hawks. After all, the bill’s surviving green-energy tax credits would actually do more to reduce emissions than the CEPP would have in isolation.
Unfortunately, Manchin appears to have finally realized this. As the New York Times reported this week:
Chris Hamilton, president of the West Virginia Coal Association, said he had conveyed to Mr. Manchin that the clean energy tax credits would be a death knell for the state’s coal industry. Even though the clean electricity standard was stripped from the bill, Mr. Hamilton said the coal industry still saw the tax incentives as a threat to the state.
“The credits that were in the bill would have resulted in an almost total displacement of coal generation within a relatively short period of time,” Mr. Hamilton said. “Those provisions were more onerous and more likely to displace coal-fired generation than the clean energy standard,” he said.
Meanwhile, the concerns that Manchin voiced in his Sunday statement — about how subsidizing green technology would jeopardize the stability of America’s energy grid — came right from a coal-industry group’s talking points.
All this invites the fear that the biggest fault line between Manchin and the White House on Build Back Better may be unbridgeable. It’s one thing for the West Virginia senator to oppose fees on carbon energy while supporting subsidies for the green variety. But if Manchin doesn’t oppose “punitive” climate policies so much as effective ones — which, by definition, will rapidly displace coal power — then no accommodation is possible.
To be clear, based on current reporting, Manchin was still on board with green-energy tax credits as recently as a week ago; he included such measures in the bill framework that he submitted to the White House. But his subsequent disavowal of Build Back Better, and the demagogic anti-green rhetoric contained therein, raises the possibility that Manchin has lost all tolerance for mitigating the global ecological crisis.
Either way, Biden and Manchin could probably reach an agreement on a budget reconciliation bill of some kind. There are undoubtedly policies that the West Virginia senator would like to enact and which he cannot advance through bipartisan legislation. Manchin has been a consistent advocate for rolling back portions of the Trump tax cuts, increasing Affordable Care Act subsidies, and establishing a federal prekindergarten program. And that last item has special significance for West Virginia. As a state that already operates a public prekindergarten program, the Mountain State would be instantly eligible for large federal matching funds under Biden’s program. There is no reason to doubt the sincerity of Manchin’s support for either public preschool or large transfers of money from the federal government to the West Virginia Treasury.
But a spending bill that did not include substantial investments in combating climate change could not be described as a version of Build Back Better. It would be an entirely different piece of legislation — and one that left the president’s top domestic priority unfulfilled.
Democrats must hope that Manchin did not abruptly change his position on green-energy tax credits within the past week. But they should also prepare for the possibility that Build Back Better is truly dead and that advancing decarbonization will require Biden to take matters into his own hands.