Manchin makes a deal with Democrats on new bill to hike taxes on rich and help climate

Sen. Joe Manchin said Wednesday he has a deal with Democratic leadership on a bill that would cut inflation and include energy provisions after he previous scuttled President Joe Biden‘s green agenda.

The surprise announcement dropped after the Senate passed a rare bipartisan bill to fund domestic semiconductor chip manufacturing to boost competitiveness with China

It also came as Manchin is out with COVID and working remotely. Manchin, one of the most conservative Democrats in Congress, has long been a hold-out on some key social, climate, health and economic items for Democrats.

The announcement will allow for movement on Biden’s social agenda, which has been stalled for seven months, and could reap major political benefits for Democrats ahead of the November midterms. 

Senate Joe Manchin said he has a deal with Democratic leadership on a bill that would cut inflation and include an energy policy after he previous scuttled President Joe Biden’s green agenda

Details on the deal 

Senator Manchin and Schumer’s new bill would raise $739 billion in new revenue through a variety of proposals:

$313 billion by implementing a 15-percent corporate minimum tax

$288 billion from empowering Medicare to negotiate lower drug prices 

$124 billion from strong IRS enforcement of tax law 

$14 billion from closing the carried interest loophole for money managers

 

It also includes $433 billion in new spending: 

 $369 billion on energy security and climate change 

$64 billion to extend health care subsidies for the Affordable Care Act

 

That would leave $300 billion to reduce the deficit 

The Democratic senator from West Virginia announced he and Senate Majority Leader Chuck Schumer reached a deal on a measure to ‘address record inflation by paying down our national debt, lowering energy costs and lowering healthcare costs.’

It also includes tax policy that would protect ‘small businesses and working-class Americans while ensuring that large corporations and the ultra-wealthy pay their fair share in taxes.’

There were not many specifics but Manchin said it would also include a plan to lower prescription drug prices. 

It will include a 15 percent corporate minimum tax, $369 billion for energy and climate programs, $300 billion in deficit reduction, and a three extension of the subsidies for the Affordable Care Act. 

The White House has signed off on the deal.

‘This afternoon, I spoke with Senators Schumer and Manchin and offered my support for the agreement they have reached on a bill to fight inflation and lower costs for American families,’ Biden later said in a statement. 

‘This is the action the American people have been waiting for,’ Biden said, touting the breakthrough. 

Earlier this month, Manchin torpedoed the president’s green agenda on Capitol Hill when he said he could not support billions of dollars in new climate spending as part of a larger economic package known as Build Back Better.

He gave concerns about record high inflation as his reason.

Biden, in return, vowed to use his executive power to push through his climate plans and Democrats on Capitol Hill had resigned themselves to passing a narrow bill that would lower the cost of prescription drugs and extend additional subsidies for the Affordable Care Act.

There was no immediate explanation as to why Manchin suddenly agreed to this new legislation.

But, in his statement, Manchin made it clear he doesn’t support Build Back Better, which had started to become a poison pen for Biden as Republicans slammed the legislation for containing wasteful government spending and a wish-list of liberal agenda items.

‘For too long, the reconciliation debate in Washington has been defined by how it can help advance Democrats political agenda called Build Back Better. Build Back Better is dead,’ Manchin said. 

The senator’s new bill he announced is called The Inflation Reduction Act of 2022. 

Schumer said the Senate would vote on it next week.

‘We have reached agreement with President Biden and Speaker Pelosi to pass comprehensive permitting reform legislation before the end of this fiscal year. We urge every member of the U.S. Senate to support this important legislation,’ Schumer and Manchin said in a joint statement.

Earlier this month, Senator Joe Manchin torpedoed President Joe Biden's green agenda on Capitol Hill when he said he could not support billions of dollars in new climate spending as part of a larger economic package known as Build Back Better

Earlier this month, Senator Joe Manchin torpedoed President Joe Biden’s green agenda on Capitol Hill when he said he could not support billions of dollars in new climate spending as part of a larger economic package known as Build Back Better

Biden cheered on the breakthrough, saying the legislation, if enacted, will be 'historic'

Biden cheered on the breakthrough, saying the legislation, if enacted, will be ‘historic’ 

But Senator Joe Manchin has cut a deal with Senate Democratic Leader Chuck Schumer on new legislation will 'address record inflation by paying down our national debt, lowering energy costs and lowering healthcare costs'

But Senator Joe Manchin has cut a deal with Senate Democratic Leader Chuck Schumer on new legislation will ‘address record inflation by paying down our national debt, lowering energy costs and lowering healthcare costs’

Manchin comes from a state where coal is a majority industry.

He vowed to support a new energy policy in his statement Wednesday but tempered his support by saying the country must not remove ‘dependable and affordable fossil fuel energy before new technologies are ready to reliably carry the load.’

‘I support a plan that will advance a realistic energy and climate policy that lowers prices today and strategically invests in the long game. As the super power of the world, it is vital we not undermine our super power status by removing dependable and affordable fossil fuel energy before new technologies are ready to reliably carry the load. This legislation ensures that the market will take the lead, rather than aspirational political agendas or unrealistic goals, in the energy transition that has been ongoing in our country,’ he said.

Republicans immediately attacked the deal.

‘Senate Democrats can change the name of Build Back Broke as many times as they want, it won’t be any less devastating to American families and small businesses. Raising taxes on job creators, crushing energy producers with new regulations, and stifling innovators looking for new cures will only make this recession worse, not better,’ said Republican Sen. John Cornyn of Texas. 

Republicans, led by Senate GOP Leader Mitch McConnell, had threatened to block the Chips legislation if Democrats rammed through Biden’s Build Back Better package of social, health and climate programs using reconciliation. 

The process allows them to avoid a Senate filibuster threat – meaning they can pass legislation with the help of only Democratic votes.

Manchin and moderate Democratic Sen. Kyrsten Sinema have typically been the hold-outs of the party, which holds 50 seats in the Senate, with Vice President Kamala Harris utilized as a tie-breaker vote.  

Once Chips passed, McConnell was down his main bargaining chip. 

Manchin’s statement resurrecting a reconciliation deal came just hours later. 

Manchin’s turnaround: Senator’s full statement on backing new bill after sinking Build Back Better 

“Over the last year, leaders in Washington have ignored repeated warnings about the severe threat of inflation and the consequences of unprecedented domestic spending. Despite these concerns and my calls to give the country time to fully realize the impacts of such historic levels of spending and our inflation crisis, many Democrats have continued to push for trillions more in spending to meet a political deadline. As difficult as it is for some to hear, political calls to action that ignore the severity of the crises we face and will continue to face are a recipe for national disaster.

“We must be honest about the economic reality America now faces if we want to avoid fanning the flames of inflation. At its core, the purpose of reconciliation is to get our economic and financial house in order. Contrary to foolish talk otherwise, America cannot spend its way out of debt or out of inflation. With respect to my position, I have never and will never walk away from solving the problems facing the nation we all love. I strongly support the passage of commonsense policies that reduce inflation and focus on the major challenges confronting America today and in the future.

“I have worked diligently to get input from all sides on the legislation my Democratic colleagues have proposed and listened to the views of my Republican friends to find a path forward that removes inflationary policies so that Congress can respond to Americans’ suffering from high prices. Based on that work, I now propose and will vote for the Inflation Reduction Act of 2022. Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination. Whether it is the threats to our energy security, high inflation, exploding national debt, persistent income inequality, supply chain chaos or the emergence of a new Cold War, it is time to put away the partisan swords and advance legislation that is in the best interests of the future of this nation and the American people we all represent – not just one party.

“It is past time for America to begin paying down our $30 trillion national debt and get serious about the record inflation that is crushing the wages of American workers. In practical terms, the Inflation Reduction Act of 2022 would dedicate hundreds of billions of dollars to deficit reduction by adopting a tax policy that protects small businesses and working-class Americans while ensuring that large corporations and the ultra-wealthy pay their fair share in taxes.

“Tax fairness is vital to our nation’s economic future. It is wrong that some of America’s largest companies pay nothing in taxes while freely enjoying the benefits of our nation’s military security, infrastructure and rule of law. It is commonsense that a domestic corporate minimum tax of 15 percent be applied only to billion-dollar companies or larger ensuring that America’s largest businesses are no longer able to operate for free in our economy. Furthermore, to avoid inevitable partisan gamesmanship and increase confidence in the fairness of the tax system, tax reform should never put U.S. businesses at a disadvantage against international competitors. Our tax code should not favor red state or blue state elites with loopholes like SALT and should focus more on closing unfair loopholes like carried interest. Through the enforcement of a fair tax code, we can use the revenue to cut the deficit and lower the cost of healthcare for working families and small businesses.

“In addition to fighting inflation, we must stop pretending that there is only one way to combat global climate change or achieve American energy independence. The Inflation Reduction Act of 2022 addresses our nation’s energy and climate crisis by adopting commonsense solutions through strategic and historic investments that allow us to decarbonize while ensuring American energy is affordable, reliable, clean and secure. The need to balance all of these critical energy priorities is no longer open to debate given the energy threats we face.

“I support a plan that will advance a realistic energy and climate policy that lowers prices today and strategically invests in the long game. As the super power of the world, it is vital we not undermine our super power status by removing dependable and affordable fossil fuel energy before new technologies are ready to reliably carry the load. This legislation ensures that the market will take the lead, rather than aspirational political agendas or unrealistic goals, in the energy transition that has been ongoing in our country. The Inflation Reduction Act of 2022 invests in the technologies needed for all fuel types – from hydrogen, nuclear, renewables, fossil fuels and energy storage – to be produced and used in the cleanest way possible. It is truly all of the above, which means this bill does not arbitrarily shut off our abundant fossil fuels. It invests heavily in technologies to help us reduce our domestic methane and carbon emissions and also helps decarbonize around the world as we displace dirtier products.

“Our persistent and increasing dependence on foreign energy and supply chains from countries who hate America represents a clear and present danger and it must end. The increased risk of geopolitical uncertainty demands that we turn our focus to increasing U.S. energy production and bringing good paying energy and manufacturing jobs back to America. While this may seem like commonsense, this Administration’s current solution is to push forward more costly regulations resulting in less U.S. production while inexplicably asking other nations to pump more oil and relying on Chinese President Xi for the critical minerals our economy needs.

“Let me make it clear, I will not vote to support policies that make the United States more dependent on foreign energy and supply chains or risk moving the country closer to the unstable and vulnerable European model of energy we are witnessing today. Most importantly, I am heartened by the bipartisan recognition that for America to achieve our energy and climate goals, it is critical we reform the broken permitting process. President Biden, Leader Schumer and Speaker Pelosi have committed to advancing a suite of commonsense permitting reforms this fall that will ensure all energy infrastructure, from transmission to pipelines and export facilities, can be efficiently and responsibly built to deliver energy safely around the country and to our allies.

“For too long, the reconciliation debate in Washington has been defined by how it can help advance Democrats political agenda called Build Back Better. Build Back Better is dead, and instead we have the opportunity to make our country stronger by bringing Americans together. I will do everything I can to usher in a new era of compromise and commonsense that will make America more energy secure, financially sound and a more united country for this generation and the next.

“From here forward, the debate over a future reconciliation bill or any targeted legislation must focus on supporting the everyday hardworking Americans we have been elected to serve. I support the Inflation Reduction Act of 2022 because it provides a responsible path forward that is laser focused on solving our nation’s major economic, energy and climate problems. The question for my colleagues is whether they are willing to put their election politics aside and embrace the commonsense approach that the overwhelming majority of the American people support and will best serve the future of this nation.”