Wednesday, Aug 10, 2022

Manchin Kills Schumer’s Effort To Revive Biden’s Spending Plan

 

Senator Joe Manchin of West Virginia, the Democrat who controls the crucial swing vote in the 50-50 divided US Senate, has walked away from months of quiet negotiations with Senate Majority Leader Chuck Schumer over a stripped-down version of President Joe Biden’s Build Back Better liberal spending and climate change proposal.

In a move that many believe seals the doom of numerous Democrat candidates in the upcoming November midterm elections, Senator Manchin cited the current 9.1% rate of inflation and the rising threat of a recession as the reasons why he could no longer support the extra $300 billion in tax incentives for clean energy like solar and wind power that Schumer was proposing, as well as the extension of an existing 3.8% tax on high-income households to small business owners. Schumer’s bill would also have empowered Medicare to negotiate down the cost of a limited number of prescription drugs with pharmaceutical companies, and extended expiring subsidies for middle-class families subscribing to Obamacare health insurance plans.

The measure was designed to use the Senate’s limited reconciliation procedures so that it could pass with only 50 Democrat votes, plus a tiebreaker cast by Vice President Kamala Harris, and avoid being blocked by a Republican filibuster. Schumer and the Democrats had begun a push to pass the bill before Congress was scheduled to leave Washington for its annual August summer vacation, when Manchin suddenly announced he couldn’t support the measure.

The original version of the Build Back Better plan Biden proposed last year had called for $3.5 trillion dollars in new federal spending on climate change measures and a grab bag of liberal Democrat social welfare proposals, funded by large increases in taxes on businesses and the wealthy. It was killed last December by Senator Manchin, as well as Democrat Senator Kyrsten Sinema of Arizona, over their rising concerns about the impact of the extra spending on inflation, as well as the likelihood that its new taxes would slow economic growth.

DEMOCRAT HOPES TO LIMIT THE MIDTERM DAMAGE

Democrat leaders had believed that passage of the bill this summer, breaking a year of partisan legislative gridlock in Washington, DC, would give their midterm candidates across the country a significant accomplishment upon which to base their election campaigns, and help them overcome the unprecedented level of voter disapproval of President Biden’s poor job performance. It was also among the Democrats’ last hopes to reduce the size of an expected Republican sweep in the midterm elections, limiting the size of the expected GOP majority in the House, and maintain their current narrow 50-50+1 control over the Senate.

Manchin’s decision to kill Schumer’s bill, which was announced last week shortly after the government published shockingly high consumer and wholesale price inflation figures, sparked anger among liberal Democrats. They accused the West Virginia senator of bargaining with them in bad faith and sabotaging efforts by party leaders to salvage their midterm election hopes.

The day after Manchin’s announcement, President Biden promised to move forward on some of the measures the bill had contained to combat climate change, using his executive authority. “If the Senate will not move to tackle the climate crisis and strengthen our domestic clean energy industry, I will take strong executive action to meet this moment. I will not back down: The opportunity to create jobs and build a clean energy future is too important to relent,” Biden’s statement said.

The president also urged Senate Democrats to act quickly to pass those portions of the stripped-down package that Manchin says he still supports. These include measures to reduce the cost of certain prescription drugs, and to use some of those savings to fund an extension of expiring Obamacare health insurance premium subsidies for middle-class families.

THE BIDEN FIST BUMP SEEN AROUND THE WORLD

Ironically, President Biden made the announcement from Saudi Arabia, where he was meeting leaders of the Persian Gulf oil states. They included Saudi Crown Prince Mohammed bin Salman, whom US government officials have accused of ordering the murder of Washington Post columnist Jamal Khashoggi at the Saudi embassy in Istanbul in October 2018.

When campaigning for president, Biden had promised that his administration would turn the Saudi regime into an international pariah because of its dismal human rights record. Instead, Biden humiliated himself last week with the friendly “fist bump” he exchanged with the crown prince, whose picture was immediately distributed by a Saudi press agency to news and media outlets around the world.

Biden made the Middle East trip to beg the Gulf states to further increase their production of crude oil and relieve the intense political pressure on Biden at home due to sky high gas prices at the pump. Yet the Biden administration still refuses to relax the harsh restrictions it has imposed on the American fossil fuel industry, preventing it from expanding domestic production of crude oil and natural gas sufficiently to relieve the worldwide fossil fuel shortage that was exacerbated — but not created by — the Russian invasion of Ukraine, and to bring down the record high price of gas at the pump for American consumers.

At the end of his news conference in Saudi Arabia, Biden doubled down on his climate change policies, vowing that “I am not going away” on the climate fight. “I will use every power that I have as president to continue to fulfill my pledge toward dealing with global warming,” he said.

MANCHIN’S VERSION OF HIS CONVERSATION WITH CHUCK SCHUMER

During a West Virginia radio interview the morning after Manchin announced he was killing the Schumer proposal, the senator insisted he is still open to negotiations with the Biden administration over some of its provisions. However, he said he could not support its new spending on climate change until he had seen the inflation figures for July to determine whether price increases have peaked.

“I want climate. I want an energy policy,” Manchin declared in the interview with radio host Hoppy Kercheval. “I would not put myself through this if I wasn’t sincere about trying to find a pathway forward to do something that’s good for our country.” But he said that his main current concern is that, “Inflation is absolutely killing many, many people.”

Manchin said that he had told Schumer the night before, “Let’s wait until that [July inflation and Federal Reserve interest rate number] comes out… Can’t we wait to make sure that we do nothing to add to that? And I can’t make that decision on basically on taxes of any type, and also on the energy and climate.”

He then told Schumer to focus instead on drafting legislation to reduce drug prices. When Schumer responded by asking Manchin, “Are you telling me you won’t do the other [vote for climate change legislation] right now?” the West Virginia senator replied, “It’s not prudent to do the other right now.”

WHY DEMOCRATS CAN’T WAIT UNTIL SEPTEMBER

Manchin said that if better July inflation and economic numbers are released on August 10, after Congress will have left Washington for a five-week summer vacation, Democrats could then simply pass their climate change legislation in September. However, given the urgent pieces of legislation which must pass Congress before the end of the current fiscal year, and the intense campaign pressures on legislators running for reelection in November, the passage of any major new partisan bill during the month of September seems highly unlikely.

One of those urgent pieces of legislation that must pass by September 30 is a stopgap funding bill known as a continuing resolution (CR) to keep the federal government running after the start of the new fiscal year on October 30. The Republican Senate Minority Leader, Mitch McConnell, has threatened to hold up passage of the CR, precipitating a partial government shutdown on October 1, if Schumer tries to pass his proposed legislation with just 50 Democrat votes, plus the vice president’s tiebreaker, and avoid a filibuster by using the Senate’s reconciliation rules.

Another problem with delaying Senate consideration of the legislation until September is that by mid-August, many states will have already announced the monthly premiums for 2023 Obamacare health insurance plans purchased on their online exchanges during the enrollment period which runs from November 1 to December 15. If the extension of Obamacare premium subsidies for middle-class families in Schumer’s proposal has not been passed into law by that time, the insurance companies will increase their premium rates accordingly, making the insurance plan unaffordable for many families.

BIDEN’S REJECTED ENERGY PROPOSALS

Senator Manchin also expressed his objections to some of the goals in the energy portion of the Schumer proposal, such as totally eliminating the use of coal and ending any further investments in the production of other fossil fuels. Manchin represents West Virginia, where coal mining remains one of the bulwarks of the state’s economy. Manchin has said he wants the Democrat energy bill to include a robust program to continue the development of clean fossil fuels, including so-called carbon capture and storage technology which would enable the continued burning of coal for energy by eliminating its carbon emissions into the atmosphere.

Schumer’s proposal had also included a renewal of $7,500 in federal tax credits for buyers of electric cars, intended to help the American auto industry reach Biden’s goal that half of the new cars sold in the United States be electrically driven by 2030, up from just 6% of the new car market today.

Without those tax credits, the vehicles will be too expensive for many American consumers to buy, slowing the transition to electric cars and forcing the US auto industry to rethink its current efforts to phase out gas-powered cars in favor of all-electric vehicle technology.

The failed Schumer bill had also included extended 10-year tax credits for the US wind and solar power industries, enabling them to make longer-term investments to develop those technologies.

The West Virginia senator also noted in his conversation with Schumer that the mechanism which Democrats have proposed to pay for the clean energy investments in the proposal has run into serious trouble in Europe. The new revenues were supposed to come from raising the minimum tax on the foreign income of US-based multinational companies from the current 10.5% to the proposed 15% global corporate minimum tax rate that is currently being negotiated with more than 130 countries around the world. However, that proposal has run into stiff opposition, particularly in Europe, where Hungary has threatened to use its veto in the Europe Union to block its adoption.

As a result, Manchin said, the US cannot now impose that new 15% foreign income corporate tax without “putting all of our international companies in jeopardy.”

WHY DEMOCRATS ARE SO FRUSTRATED WITH MANCHIN

Liberal Democrats have been frustrated with Joe Manchin ever since they emerged with a 50-50 split in the Senate, giving them effective control, thanks to the victories of both of their Georgia senatorial candidates in a runoff election in January 2021. Initially, they dismissed his publicly expressed reservations about Biden’s big liberal spending proposals, beginning with his $1.9 trillion Covid relief package passed in March 2021, which Manchin eventually agreed to support in light of the pandemic emergency.

They then assumed that Manchin’s objections to the Biden spending bill were mostly for the consumption of his voters at home in West Virginia, who voted for Trump over Biden in 2020 by a 40% margin. Other Democrats believed they could convince Manchin to go along with the rest of Biden’s agenda by cutting political deals with him in private, in traditional DC fashion. But they were wrong. Last year, when negotiating with his fellow Democrats over the original Build Back Better bill, Manchin got the full treatment, including an invitation to breakfast with Biden at his Delaware home. But Manchin defied the predictions of many Democrat political strategists by holding firm to his objections to the excess spending in the bill.

Manchin is a former governor of West Virginia, and the only Democrat currently holding a state-wide elected position. He has also been free to follow his conscience, because his current Senate term does not expire until 2024, and he does not have to run for reelection this November. This has enabled him to distinguish himself as one of those rare politicians these days who sticks by his public statements, and refuses to break his promises to the voters back home in secret deals with his Democrat colleagues in Washington.

WHY PROGRESSIVE DEMOCRATS FEEL BETRAYED BY BIDEN

Washington State Congresswoman Pramila Jayapal, who is the leader of the Progressive Caucus in the House, said she was not surprised that Manchin had backed away from his negotiations with Schumer last week due to his growing concerns over inflation, even after Schumer was convinced that the two had come to an agreement.

Jayapal cited her bitter experience with a deal she had made with Democrat party leaders involving Manchin last fall. Her Progressive Caucus did not trust White House promises to secure congressional passage of both the original $3.5 trillion Build Back Better bill, with its generous liberal provisions, at the same time as the passage of the much more moderate bipartisan $1.2 trillion infrastructure bill that Biden had negotiated with Senate Republicans. Therefore, Jayapal’s Progressive Caucus insisted they would not allow the infrastructure bill to be passed by Congress and signed into law without passage of Biden’s Build Back Better bill first.

The Senate passed the infrastructure bill last August with a large bipartisan majority, but the measure languished without action by the House until November, because the Progressive Caucus had enough votes, combined with those House Republicans who also opposed the infrastructure bill, to defeat the measure if it came up for a vote.

The delay became a political embarrassment for the Biden White House and House Speaker Nancy Pelosi. After extended discussions between Jayapal and Manchin about his support for the provisions of the Build Back Better plan, and Biden’s assurances to Jayapal that he would be able to deliver Manchin’s Senate vote for that proposal, she dropped her caucus’ objections to the bipartisan infrastructure bill, enabling it to pass the House and reach the president’s desk.

HOW MANCHIN KILLED BIDEN’S ORIGINAL BUILD BACK BETTER PLAN

But on December 19, just a few weeks after Biden signed the infrastructure bill into law, hailing it as one of his administration’s most important legislative accomplishments, Manchin broke off negotiations with the White House over his support for a reduced version of the Build Back Better plan, and announced on Fox News that he could not support the bill that the White House had modified to win his approval, largely because of its expense.

“I cannot vote to continue with this piece of legislation,” Manchin said. “I’ve tried everything humanly possible. I can’t get there. This is a no.”

He then added, “We should be up front and pick our priorities. That’s the difference. And what we need to do is get our financial house in order, but be able to pay for what we do and do what we pay for.”

In a scathing statement Manchin released shortly thereafter, he blasted “my Democratic colleagues in Washington [who] are determined to dramatically reshape our society in a way that leaves our country even more vulnerable to the threats we face. I cannot take that risk with a staggering debt of more than $29 trillion [and with inflation hurting Americans] with no end in sight,” the statement said.

In light of her disappointing experience with Manchin on the earlier version of the Build Back Better Bill last year, Jayapal said that she was not surprised that Manchin had walked away last week from the agreement with Schumer on a cut back version of the same bill. She said that Manchin, “is not an honest negotiator … [he’s] somebody who lies to his own president about being willing to get something done and then consistently shows over and over again that he’s not interested in carrying out the Democratic Party agenda.”

WHY SO MANY DEMOCRATS MISREAD MANCHIN

A Washington Post analysis by Paul Kane suggested that the problem is Manchin’s negotiating style. “In private,” Kane writes, “Manchin often allows other negotiators to hear what they want to hear. He says nice things about certain proposals, talks about wanting to get a deal, creating what turns out to be false momentum for the really big deal.

“[But] out in the hallways after those meetings, Manchin has continually delivered more neutral assessments of where things stood [when talking on the record with reporters].”

That same pattern was evident during his low-key talks with Schumer over the summer. As the negotiations progressed, word was spread in Washington’s corridors of power by some of those involved in the talks, leading to media stories predicting that a deal would be reached enabling a bill to be passed by the end of July, before Congress adjourned for its August vacation.

A statement by Schumer to reporters in late June seemed to confirm these expectations. He described “very good and productive discussions,” before the majority leader added an important caveat: “But there are still some issues that have to be resolved.”

Manchin responded to Schumer’s statement with a more guarded comment, released through a Manchin staff member, which said that the senator, “continues to engage in respectful conversations about the best way to move our country forward, but is still seriously concerned about harmful inflation taxes hurting Americans.”

FALSE MEDIA EXPECTATIONS

Once again, most reporters in the liberal Washington press corps were eager to report what they wanted to hear, that the Manchin-Schumer conversations were making progress, while ignoring the other half of the statement, that Manchin was “still seriously concerned” about the impact of inflation on Americans.

On July 7, a Manchin spokesman issued a second statement on the talks with Schumer which said openly that, “Suggestions that a reconciliation deal is close are false. Senator Manchin still has serious unresolved concerns, and there is a lot of work to be done before it’s conceivable that a deal can be reached.”

Yet the Washington press corps stuck to their optimistic narrative up until last week, when word spread on July 14 that Manchin had told Schumer that the higher inflation numbers had made it impossible for him to agree to the current deal until the news on the economy improves.

In his radio interview the next day, Manchin expressed annoyance at those who accused him of misleading his fellow Democrats. He said that if they had listened to his words more closely, rather than reading in their own interpretations, they would have realized that he and Schumer were never that close to agreeing to a deal. “I am where I have been,” he declared simply.

LIBERALS DEMANDING THAT BIDEN ISSUE EXECUTIVE ORDERS

Frustrated Democrat liberals are now arguing that Biden doesn’t need to wait for congressional authorization to impose sweeping climate change measures by issuing executive orders. These include the imposition of a carbon border tariff on imports from countries with worse greenhouse emissions (such as China), requiring carbon capture from all major emitters of greenhouse gasses, and imposing stronger federal emissions control standards on all new cars and trucks.

“There is opportunity in this moment. The Biden administration has a wide lane to step up and start taking vigorous action to fight the climate crisis,” Rhode Island Senator Sheldon Whitehouse wrote in a series of tweets. “With reconciliation foreclosed as a path for ambitious climate action, Congress must pivot to potentially bipartisan climate solutions such as a border carbon adjustment. Meanwhile, the executive branch has lots of tools at its disposal.”

However, if Biden acts on Whitehouse’s suggestion and issues a broad range of executive orders to promote the climate change measures Schumer was proposing to Manchin, they are like to be subject to strong legal challenges. The conservative majority on the US Supreme Court has just issued a landmark decision that reduces the rule-making authority of the agencies of the federal government. If Biden were to issue an executive order to the Environmental Protection Agency to impose major new carbon emission standards, the Supreme Court ruling would require the agency to show it had been given explicit authority by an act of Congress to carry out that order.

Ed Markey, the progressive Democrat senator from Massachusetts, tweeted after hearing that Manchin had refused to agree to Schumer’s proposal: “Rage keeps me from tears. Resolve keeps me from despair. We will not allow a future of climate disaster. I believe in the power of the Green New Deal. The power of young people. I am with you. We will not give up.”

Democrat Senator Tina Smith of Minnesota condemned Manchin for “slamming the door” on the emerging agreement with Schumer.

Senator Martin Heinrich of New Mexico said, “We have an opportunity to address the climate crisis right now. Senator Manchin’s refusal to act is infuriating. It makes me question why he’s [the Democrat] Chair of the Senate Committee on Energy and Natural Resources.”

Progressive New York Congresswoman Alexandria Ocasio-Cortez thanked Heinrich for calling out Manchin and described his condemnation of the West Virginia senator as courageous.

DEMOCRATS RUNNING OUT OF LEGISLATIVE TIME

Liberal congressional Democrats were already frustrated that Biden had agreed last year to scale back the expanded child tax credits, universal prekindergarten, and child care subsidies that had been part of his original Build Back Better plan, in a failed effort to win Manchin’s support. Now they are being asked to drop the climate measures as well from Schumer’s scaled-back bill to get any of the items that remain in the measure passed into law while they still control both houses of Congress.

Democrats know that the legislative clock is ticking down on the current session of Congress. Manchin’s opposition to the climate provisions in Schumer’s proposal has probably killed any chance for passage of any such legislation before January, when Republicans are widely expected to gain majority control of the House and likely the Senate as well. That would almost certainly end President Biden’s ability to pass any new climate change legislation during the remaining two and a half years of his current term in office, or in time for this country to reach his ambitious 2030 climate change and 2050 “net-zero” carbon emission goals.

Looking back, progressive Democrat leaders such as Jayapal regret having accepted President Biden’s promise last year to deliver Senator Manchin’s vote in favor of his Build Back Better bill. They realize they should have made better use of the political leverage they had at that time, by holding steadfast in their refusal to allow a House vote on the bipartisan infrastructure legislation before passage of the Build Back Better bill.

ENVIRONMENTALISTS RUNNING OUT OF PATIENCE WITH BIDEN

Liberal environmental groups have also given up on hopes for the passage of new climate change legislation before the Democrats lose their current control over both houses of Congress due to the likely outcome of November’s midterm election. Activists are urging Biden to invoke the powers given to him by Congress under the National Emergencies Act to declare a national climate emergency, under which he could initiate a broad range of climate change measures that would normally require congressional authorization.

Ashley Thomson, a senior climate activist for Greenpeace USA, said that Senator Manchin’s latest move to block administration climate change proposals means that Biden “has no more excuses” and must begin to use his executive powers now to help prevent a predicted worldwide climate change catastrophe.

Biden has publicly pledged to reduce US greenhouse gas emissions by at least 50% from 2005 levels by 2030 and reach net-zero emissions by 2050. However, without implementation of the climate change provisions included in the reconciliation proposal Manchin has killed, experts say that Biden’s emissions goals are probably no longer achievable.

Liberal climate activists now insist that the president must start taking unilateral action. “President Biden can end public land [oil and gas] lease sales to fossil fuel companies, start regulating [greenhouse gases] through his existing powers with the EPA, and declare a climate emergency,” Thomson said. “We cannot continue to wait around for a bunch of corporate shills in Congress to do nothing while people are dying.”

The day after Manchin walked away from his talks with Schumer, there was a conference call between leaders of some of the country’s largest environmental lobbying organizations and three Biden White House aides, including Ali Zaidi, Biden’s deputy climate advisor. After that call, some of the activists complained to a New York Times reporter that the response by Biden’s aides was “not inspiring.” While they did acknowledge and urgent need for climate change action, they had no specific measures to suggest.

WHITE HOUSE ENERGY STRATEGY HAS BACKFIRED

The New York Times reports that Biden’s White House climate team is now considering a number of moves that would modestly reduce the current amount of greenhouse gas emissions. They include tougher EPA regulations on leaks of methane from oil and natural gas wells, as well as further cuts to the maximum allowable emissions from utilities. But these proposals are not nearly strong enough to begin to meet Biden’s announced goal of cutting America’s greenhouse gas emissions in half by the end of this decade.

Another White House strategy for cutting greenhouse gas emissions is to discourage the use of fossil fuels by increasing their price to consumers. The danger of this strategy is that it usually generates a strong political backlash from voters who feel the resulting economic pain at the pump every time they fill their car with gas.

The Biden White House was already under considerable political pressure over rising gas prices due to its war on the domestic fossil fuel industry well before Russian President Vladimir Putin invaded Ukraine in February. White House attempts to blame the entire increase in gas prices at the pump since Biden took office on Putin’s war have backfired badly.

As a result, the White House sent the president of the United States to beg Middle East dictators to pump more oil to reduce prices at the pump. Yet at the same time, the Biden administration is still refusing to lift its onerous restrictions on the domestic fossil fuel industry which could provide substantial price relief to American consumers if it were permitted by Biden’s policies to do so.

Other liberal climate change proposals now being urged upon Biden include the blocking of all further US fossil fuel exports, even though industry experts warn that such a move could be counterproductive, since the US no longer has enough domestic oil refining capacity to meet its fossil fuel needs. Climate change activists are also calling for a further shift of federal funding to expand wind and solar power and battery manufacturing, even though those technologies are not yet capable of reliably providing for all this country’s energy needs. One result of the premature forced transition to green energy sources is that rolling power shortages are expected to affect two-thirds of this country’s electrical grid this summer.

These activists also ignore the suffering of middle- and working-class consumers from the inflation, which has been partially driven by record high prices for gasoline and diesel fuel — and that will only be made worse if Biden heeds their proposals to further limit the domestic production and use of fossil fuels.

IGNORING THE FACTS OF GREENHOUSE GAS EMISSIONS

Climate change activists also ignore the fact that the US has been a worldwide leader in reducing its greenhouse gas emissions by 12% since 2005. That is mostly due to the voluntary substitution by the US power industry of cheaper and cleaner-burning, domestically-produced natural gas for coal in the generation of electricity.

China is now the main source of global greenhouse gas emissions, producing more than twice as much annually than the US. Instead of reducing its carbon usage, China is currently building 95 new coal-fired generating plants. India, which is third in greenhouse gas emissions behind the US and Indonesia, which is in tenth place, are also each currently building more than 20 new coal-fired plants.

Taken together, that means that global carbon emissions will continue increasing for years to come, regardless of any new climate change policies that the Biden administration may adopt.

BIDEN LOSING HIS TOP CLIMATE EXPERTS

Another indication of the failure of Biden’s climate change and green energy policies is a report by the New York Times of the imminent departure of some of his top environmental advisors. These include Gina McCarthy, who had served as the head of the EPA under President Barack Obama and was serving as the leader of the Biden White House office of climate policy. It also includes former secretary of state John Kerry, who has been serving as Biden’s international envoy on climate issues, and who is expected to resign after leading the US delegation to the next round of UN-sponsored climate change negotiations to be hosted by Egypt in November.

Both have no doubt been embarrassed by the administration’s inability to get Congress to pass most of Biden’s overly ambitious climate change legislation, as well as the president’s failure to keep his promise to become a leader of the international effort to combat global warming and greenhouse gas emissions.

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