We touched on this issue at the end of Monday's post, but it's garnering more attention as the week progresses. Joe Manchin and Chuck Schumer blindsided Republicans -- and some Democrats, apparently -- with their announcement of a tax-and-spend 'BBB-lite' deal late last week. It wasn't just an agreement on principle; it was a fully-written bill. Its rollout was planned in secret, then sprung just as soon as Senate Republicans had helped pass the CHIPS Act, which Mitch McConnell had been holding up as leverage. With said leverage off the table, the truth could be told -- a deal to hike taxes and expand federal spending was in place, blessed by the most important swing vote in the upper chamber. The GOP, it seemed, had been rolled. But are Democrats about to pull a similar maneuver against Manchin himself?
People have been asking why Manchin signed onto a package that violates any number of red lines and stances he's announced in the past, including some very recent comments. What did he get out of it? There are some West Virginia goodies in there (although there are also some head-scratchers, from that perspective), and you don't identify as a Democrat in modern American if you're fundamentally uncomfortable with raising taxes, spending money, and growing government. It's what Democrats do. But it looks as though part of what pulled Joe over the finish line was a pledge from Democratic leadership that he'll secure some pro-fossil fuels concessions in a separate bill:
Senator Joe Manchin III of West Virginia has secured a promise from Democratic leaders and the White House to complete a highly contested 304-mile gas pipeline in his state, his office said, a major concession won as part of negotiations over a climate and tax bill...It would ensure that federal agencies “take all necessary actions to permit the construction and operation” of the gas line, known as the Mountain Valley Pipeline. The project — which has been opposed for years by environmentalists, civil rights activists and many Democratic state lawmakers in Virginia — would carry natural gas from the Marcellus shale fields in West Virginia across nearly 1,000 streams and wetlands before ending in Virginia...Other parts of the agreement would make it harder for opponents to hold up energy projects under the National Environmental Policy Act, a bedrock environmental law, by setting a two-year time limit for challenges. It would also require the president to establish 25 “priority” projects on federal lands that must include fossil fuels and nuclear energy. And it would revise a section of the Clean Water Act in a way that would make it more difficult to block or delay pipeline projects.
Republicans and other critics immediately started to wonder: If Democrats extract what they want out of Manchin, with the passage of a huge tax-and-spend bill, couldn't even a small number of them promptly refuse to go along with the secondary assurances he's been promised? Those vows were sufficient to get his name on the dotted line, but that piece of paper could become worthless the moment the Schumer/Manchin legislation heads to President Biden's desk. The New York Times explains how leadership has convinced the West Virginian that he won't be double-crossed on these secondary provisions, even in the face of progressive opposition:
Recommended
Some Democrats like Raúl Grijalva, the chairman of the House Committee on Natural Resources, have said they will not support any measures that fast-track pipelines or other energy projects. But three people familiar with Mr. Manchin’s agreement said Democratic leaders were likely to insert the Mountain Valley Pipeline and permitting provisions into a must-pass piece of legislation, such as the bill that funds the federal government, to maximize its chances. Mr. Manchin on Monday said he believed the United States needed to reform the rules around permits to increase energy production.
This could be a high-wire act. Democrats have zero margin for error in the Senate, and close to zero margin for error in the House. A few defections, especially ones ostentatiously dressed up as vengeance against Manchin for tanking any number of left-wing dreams over the last two years, would imperil what he's been promised. Leaders could cram these items into "must pass" legislation, in order to jam opponents, but nothing would be a sure bet. Manchin has warned of "consequences" if either end of his bargain isn't upheld, but what does he mean by that? If Democrats pass the part that they all like, then the separate piece of legislation on pipelines and permitting implodes for whatever reason, what is Manchin going to do? Switch parties? Unlikely. Exact revenge at some point down the line with a vote or two that Democrats loathe? Maybe, but that's already sort of par for the course with him. He'd still have a lot of power in a closely-divided Senate, of course, but vague admonitions may not deter progressives from the strong appeal of sticking it to him on BBB-lite 2.0, the one he really wants. Relatedly, this is interesting, via his West Virginia Senate counterpart:
Capito statement highlights the sequencing issue facing Dems' ancillary concessions. Manchin might know what's in this permitting bill, but he also has to know that dropping it for quick passage with a CR in the wake of reconciliation is bound to be a wreck. https://t.co/BBo3aRdwHm
— Liam Donovan (@LPDonovan) August 2, 2022
Conservative policy expert and activist Phil Kerpen offers a similar suggestion:
Waive the budget act to put this on the Manchin bill as an amendment or it isn't real.
— Phil Kerpen (@kerpen) August 1, 2022
With GOP votes you would only need 10 Democrats. Surely Schumer can deliver that. https://t.co/kjcny6OuB8
Assuming all 50 Senate Republicans are on board for (only) the pipelines and permitting side agreement Manchin has hammered out, 60 votes seems attainable to get over the cloture/filibuster hurdle. If Schumer is so committed to the entire deal, why not figure out a way to get this piece of it passed first (better, to force Pelosi's hand) or simultaneously? It's certainly feasible. Why would Manchin be willing to roll the dice and hope that his entire party -- many of whom can't stand him -- will see the second piece through, especially since a good number of them absolutely oppose it on the merits? Maybe he's just a very trusting man with, shall we say, somewhat inconsistent and incoherent thoughts, from time to time?
“It's absolutely ludicrous, in my mind,” said Joe Manchin just a few months ago about a spending provision in the bill HE NOW SUPPORTS
— Brent Scher (@BrentScher) August 2, 2022
From @SaysSimonson in @FreeBeacon https://t.co/8qWOE2Nw5a
Sen. Joe Manchin’s $485 billion budget reconciliation package includes a provision he once called "ludicrous" and counterproductive to fighting inflation, according to a Washington Free Beacon review of the bill. The deal Manchin struck with Senate Democrats to fight inflation includes tens of billions of dollars worth of electric vehicle tax credits, a policy once considered a non-starter for Manchin. As recently as April, Democrats thought negotiations reached an impasse after he said electric tax credits "make no sense to me whatsoever." "There's a waiting list for EVs right now with a fuel price at $4.00, but they still want us to throw $5,000 or $7,000 or a $12,000 credit to buy an electric vehicle," Manchin said on the Senate floor. "We can't produce enough product for the people that want it and we're still going to pay them to take it. It's absolutely ludicrous, in my mind." Despite those words, the Inflation Reduction Act includes electric vehicle tax credits for up to $7,500 per vehicle. Those tax benefits apply to any family making up to $300,000 and can be used on any electric vehicle that costs up to $80,000.
From "ludicrous" to "a feature of my bill," in a matter of a few months. Meanwhile, here's Manchin doubling down on his brazenly false insistence that there are no tax increases in the legislation (taxes go up by hundreds of billions of dollars, including billions that negatively impact many Americans earning well under $400,000), plus the White House's embarrassingly strained claim that the package would reduce inflation (highly dubious):
This is just bizarre. As in Baghdad Bob bizarre. We can all read the bill. https://t.co/S6gHyUUTFp
— Brian Riedl ?? ???? (@Brian_Riedl) August 1, 2022
White House officials' own rosiest, best-case-scenario spin is that their "Inflation Reduction Act" will have taken one third of one percentage point off inflation by nine years from now? https://t.co/l5HMKv9Mcb
— Andrew Quinn (@AndrewCQuinn) August 1, 2022
And how's this for an "Inflation Reduction Act" update, via the nonpartisan Tax Foundation?
Tax Foundation: "By reducing long-run economic growth, this bill may actually worsen inflation by constraining the productive capacity of the economy."https://t.co/9WWwDEceRO
— Doug Andres (@DougAndres) August 2, 2022
All in all, this isn't great:
Dems' months of claiming Republicans wanted tax hikes on all Americans was repeatedly debunked by @GlennKesslerWP.
— J.P. Freire (@JPFreire) August 1, 2022
Now:@JCTGov finds Dem hike taxes on lower/middle-income earners.@BudgetModel finds negligible deficit reduction.@UChicago paper finds price controls kill cures.
I'll leave you with Bret Baier reacting to his Fox News Sunday interview with Manchin, revealing the questions he wishes he'd asked, and commenting on the White House's 'shell game' weak rejection of a nonpartisan review of the bill's tax impact:
Join the conversation as a VIP Member