Category: Environment

Politico

Manchin’s ‘playing with fire’ — and some Democrats are tired of the drama

Josh Siegel – May 1, 2023

Sen. Joe Manchin is losing patience with his fellow Democrats over their signature climate law — and the feeling is mutual.

The West Virginia Democrat has spent weeks escalating his attacks on President Joe Biden’s implementation of the Inflation Reduction Act, the sweeping bill that Manchin helped write in a deal that stunned Washington last summer. Last week, he threatened to join Republicans in voting to repeal the law, as the House GOP is demanding in its legislation for raising the nation’s debt limit.

Manchin’s comment caught his caucus colleagues off guard, even if such a repeal would be a long shot in Congress. It came just as Biden was launching a reelection campaign that rests heavily on that legislation’s climate and health care provisions.

“That surprises me that he wants to repeal it. I think it’s one of his greatest accomplishments,” said Sen. Angus King (I-Maine), a close colleague of Manchin’s on the Energy Committee, in an interview.

The IRA is far less of a political bright spot for Manchin, whose potential reelection hopes are clouded by growing disapproval ratings in his home state, partly driven by his support for the law. Manchin has yet to announce whether he’s running, but a formidable challenger entered the West Virginia Senate race last week — GOP Gov. Jim Justice.

Manchin’s fellow Democrats understand that his reelection could determine whether they retain their slim 51-seat Senate majority in 2024. But they are also growing weary of his attacks against their marquee climate law — even if they’ve come to expect it and know there’s little they can do to change his mind. And his votes against Democratic policies and Biden nominees have already complicated his party’s agenda in the 51-49 Senate.

Some Democrats fear that Manchin’s criticisms will do real damage by confusing the public about one of the law’s most debated-provisions: its $7,500 tax credits for electric vehicles. He has accused the Treasury Department of violating the law by flouting strict provisions he wrote designed to force electric vehicles to be made in the U.S. with American-made parts.

“When you’re Joe Manchin it never hurts to be seen butting heads with the administration, but I think this is genuine umbrage over the fact Congressional intent seems pretty clear, even if the statutory construction left room for Treasury to maneuver,” 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 had this been the understanding, it reads as a personal betrayal.”

Democrats counter that the administration has been doing its best to balance the IRA’s competing goals of lowering the cost of electric vehicles while promoting U.S. manufacturing and jobs.

“Fifty of us agree that [boosting electric vehicle deployment] is a priority,” Sen. Martin Heinrich (D-N.M.) said in an interview. “The law is what it is. If he doesn’t like implementation he can run for president.”

Manchin in recent weeks has also joined Republicans in supporting resolutions they’ve brought up for a vote disapproving of the administration’s energy and environmental policies, most recently on Wednesday when he was the only Democrat to vote with Republicans in overturning an EPA regulation on emissions from heavy-duty trucks.

Manchin also co-sponsored Sen. Rick Scott‘s (R-Fla.) resolution to undo Biden’s suspension of solar power tariffs, which could come up for a vote this week after passing the House on a bipartisan basis Friday.

And Manchin, chair of the Senate Energy Committee, has also expressed his ire with the administration by torpedoing a series of Biden’s nominees, including Richard Glick to chair the Federal Energy Regulatory Commission, Laura Daniel-Davis, Biden’s pick for assistant Interior secretary for land and minerals management, and Gigi Sohn as a commissioner of the Federal Communications Commission.

The White House has supported fossil fuel projects that Manchin has backed — angering environmentalists — including the Willow oil and Alaska LNG projects, as well as the Mountain Valley Pipeline that would deliver natural gas produced in West Virginia.

Manchin did not comment for this article, but his spokesperson Sam Runyon said his objections were because the administration had strayed from the intent of the bill.

“President Biden, then-Speaker Pelosi and Majority Leader Schumer were in full 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 blatantly violate the law in an effort to replace Congressional intent with their own radical climate agenda that simply didn’t, and wouldn’t have, passed.”

Some Republicans have expressed sympathy for Manchin’s position.

“Is it playing with fire? Sure. Does Joe care? I don’t think so,” said Sen. Lisa Murkowski (R-Alaska), Manchin’s frequent legislative partner when she chaired the Energy Committee. “Good for him for calling the administration out.”

Murkowski noted that the climate law had been seemingly dead for most of last year until Manchin’s support allowed Democrats to pass it on a party-line vote. The law includes $369 billion in incentives for clean energy and electric vehicles, as well as health measures such as a cap on insulin costs for Medicare recipients.

“They made a deal with him,” Murkowski said. “And it was a hard deal and they wanted his vote, and they got it — at some political cost to him and he would admit that. And now [the Biden administration is] trying to rewrite the bill, or interpret in the way they wished they had been able to get it passed. That’s their problem.”

Manchin has repeatedly denounced Biden’s electric vehicle policies in recent weeks, including by announcing he would support Republican efforts in Congress to overturn EPA auto pollution rules designed to speed up EV adoption. He accused the administration of “lying to Americans with false claims about how their manipulation of the market to boost EVs will help American energy security.”

He repeated that theme in remarks to the U.S. Chamber of Commerce April 18, saying, “I never wanted to give the electric vehicles 75-cents’ credit let alone $7,500.”

“Y’all broke the law,” Manchin later told Biden’s Energy secretary, Jennifer Granholm, at a hearing April 20, accusing the administration of “liberalizing” its rollout of the tax subsidy to stimulate sales of electric vehicles — and warning that that approach could send money and jobs to China.

Republicans are eager to pounce on Democratic dissension over how the administration is executing the climate law. GOP lawmakers, who unanimously opposed the law, argue that it spends too much money and say its twin goals — quickly weaning the U.S. economy off fossil fuels while reducing reliance on China for clean energy technologies — are incoherent.

“Maybe he’s looked at it [the IRA] more deeply and realized it’s not what he thought it was,” Sen. Shelley Moore Capito, Manchin’s GOP counterpart from West Virginia, said in an interview. “I can’t believe he would be that naïve. But who knows?”

But other Democrats say the administration is carrying out the law that Congress passed.

“Almost all of us who voted for this legislation and contributed to it wanted to supercharge EV sales,” said Rep. Jared Huffman (D-Calif.) in an interview. “Clearly Sen. Manchin did not. He thought he was maybe sabotaging the EV industry. And it’s driving him nuts that it’s not working out that way.”

Negotiations over the EV tax credit were fraught from the start.

After Manchin rejected Democrats’ climate and social spending agenda last July when it was packaged as Build Back Better — Manchin and Senate Majority Leader Chuck Schumer quietly resumed negotiations. The electric vehicle tax credits were among the last items they haggled over.

During the preceding months, Manchin repeatedly criticized Democrats’ interest in subsidizing electric vehicle sales, calling the idea “ludicrous.”

Manchin, whose state is home to a non-unionized Toyota manufacturing facility, also derided Democrats’ original proposal to offer an extra incentive for electric vehicles made by union workers. He called the proposal “not American.” The version that became law dropped it.

Manchin, Schumer and their staffs finally forged a compromise on electric vehicles in secret talks, unveiling the renamed Inflation Reduction Act on July 27. It offered a credit of up to $7,500 for electric vehicles, but only for those meeting a thicket of stringent requirements on what countries their battery minerals and components come from. Those requirements have since sparked a major trade feud with European governments whose companies are blocked from the incentives.

“He [Manchin] does not support the credit at all. And really when he wrote it, he hoped nobody could use it. And so he’s disappointed there are a few vehicles that can use it,” said Sen. Debbie Stabenow, a Democrat from auto-industry-heavy Michigan.

Heinrich said a clash with Manchin over implementation was “inevitable” given the different ways Manchin and the White House characterized the end product, which Manchin sees as an energy security measure designed to shore up energy production of all types. Biden is using the law to push a rapid transition away from fossil fuels in the name of combating climate change.

Rep. Pramila Jayapal (D-Wash.), chair of the House Progressive Caucus, downplayed the idea of a rift within the Democratic Party.

“The majority of [the IRA] we are all together on,” Jayapal said. “I do think he [Manchin] believes we should have a renewable energy transition. We probably have different ideas for what the transition looks like and how we get there. “

But the law didn’t leave the Biden administration much wiggle room in developing regulations to fit its complex domestic content restrictions, energy experts say. Manchin contends the administration is abusing the leeway it got. He’s especially taken umbrage at the Treasury’s initial three-month delay in issuing rules, which until mid-April allowed electric vehicles to qualify for the tax credit without meeting any domestic sourcing requirements.

When Treasury finally announced the guidance in March, it offered some olive branches to automakers worried about the rules being overly restrictive, but still left the majority of EVs on the market ineligible for the credit.

Even so, Manchin cried foul, calling the Treasury rules too loose in allowing foreign suppliers to share in the tax credit bounty.

He took particular aim at the Biden administration’s classification of certain foils, powders and other components used in the batteries. By classifying the powders as “critical minerals,” rather than “battery components,” Treasury avoided placing even more severe restrictions on vehicles eligible for the tax credit.

Manchin has also criticized Treasury for allowing leased vehicles to qualify for full tax breaks as “commercial” vehicles, a workaround that skirts some restrictions in the law.

And a crucial piece of guidance is still missing: clarity on which companies’ vehicles could be barred from receiving the credit because of their connections to China. The Treasury Department says it expects to release that provision later this year.

“Manchin very clearly wanted to put deglobalization ahead of decarbonization,” said Kevin Book, managing director of ClearView Energy Partners, a research group. “He wants this stuff made here and if it slows down the transition so be it. Treasury is leaning toward trying to transition faster.”

Most Democrats, though, disagree that Biden has ignored congressional intent. They point to projections showing the IRA has already been a boon to the country’s clean energy jobs: It has prompted at least $243 billion in investments in battery plants, electric vehicles factories and other green energy projects since Biden signed the law in August.

Since Biden became president, there have been at least $95 billion in private-sector investments announced across the U.S. clean vehicle and battery supply chain, according to the Department of Energy, including $45 billion since the IRA passed.

Heinrich said he knows it may be “politically expedient” for Manchin to argue the IRA is not taking shape as he intended.

“But the reality is 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 said.

CORRECTION: A previous version of this report incorrectly quoted Kevin Book.