Senator Joe Manchin told Democratic leaders Thursday he would not support new spending on climate measures or tax increases, delivering a potentially fatal blow to President Joe Biden’s ambitious economic agenda.
The West Virginia Democrat’s decision, confirmed by three people familiar with the discussions, comes after more than a year of negotiations and just months before midterm congressional elections that will determine control of both chambers.
Manchin told Majority Leader Chuck Schumer he’s only willing to support legislation to lower prescription drug prices and extend enhanced Affordable Care Act subsidies, the people said. That leaves Democrats in a position of accepting a much smaller package shorn of nearly all of their long-term ambitions from a year ago, or getting nothing.
His decision is a de facto veto of Biden’s hopes to revive the economic plan that fizzled last year, angering Democratic progressives who had been counting on sweeping policy wins. Manchin’s vote is pivotal in the evenly divided Senate, where Democrats need a united caucus to pass the economic package by simple majority under special budget reconciliation rules.
Just days ago, Manchin and Schumer were negotiating over hundreds of billions in spending on measures designed to fight climate change, including tax breaks for renewable energy, electric vehicles and other clean power sources. The loss of those plans will be a bitter pill for many Democrats on Capitol Hill and at the White House. Solar stocks fell in early U.S. trading.
“I’m not going to sugarcoat my disappointment here,” Senate Finance Chairman Ron Wyden of Oregon, who previously talked with Manchin about a package of clean energy incentives, said in a statement. “This is our last chance to prevent the most catastrophic — and costly — effects of climate change.”
Other Democrats, including Senator Sheldon Whitehouse of Rhode Island, demanded Biden take executive action to address climate.
“With legislative climate options now closed, it’s now time for executive Beast Mode,” Whitehouse of Rhode Island tweeted. “Free at last. Let’s roll. Do it all and start it now.”
Manchin’s spokeswoman said political leaders must adjust to “economic realities” that can only further boost consumer prices.
“Political headlines are of no value to the millions of Americans struggling to afford groceries and gas as inflation soars to 9.1%,” said Manchin spokeswoman Sam Runyon. “Senator Manchin believes it’s time for leaders to put political agendas aside, reevaluate and adjust to the economic realities the country faces to avoid taking steps that add fuel to the inflation fire.”
The June inflation report this week showing 9.1% annual inflation — the worst in more than 40 years — gave Manchin another opportunity to revive his criticism about federal spending as a driver of surging prices. He also assailed Washington leaders for failing to heed concerns from him and others about inflation for more than a year.
“I was talking about inflation before it was even thought about,” Manchin told reporters earlier. “And now I’m more concerned than ever before.”
A number of Senate Democrats have said it’s critical to get a bill this month that would lower inflation, with prescription drug prices both a politically popular item and one on which they are unified.
Progress had slowed, including on the climate portion and a plan to increase taxes on the wealthy and corporations, before a self-imposed deadline set Schumer to vote on the measure before the August recess.
Manchin’s refusal was reported earlier by the Washington Post. The move comes seven months after Manchin killed Biden’s plans for a grand economic bill totaling some $2 trillion and including many progressive priorities.
The death of the climate package, which at one point contained a historic $555 billion on clean power, electric vehicles and resilience to global warming, would represent a major setback in the Biden administration’s efforts to confront global warming emissions. The president pledged last year that the U.S. would cut its greenhouse gas emissions 50% to 52% from 2005 levels by the end of the decade.
As much as $320 billion in new and expanded tax credits for wind and solar power, nuclear plants, biofuels, advanced energy manufacturing and electric vehicles, would have cut global warming causing emissions by nearly 40% by 2030, according to Democratic estimates. Recently, Schumer had offered Manchin a $375 billion package of energy and climate provisions as well as support for permitting changes sought by Manchin but Manchin said no.
‘Appalled, outraged and disappointed’
Environmental groups urged Manchin to reconsider.
“There truly aren’t words for how appalled, outraged, and disappointed we are,” said Tiernan Sittenfeld, a senior vice president with the League of Conservation Voters. “Senator Manchin had every opportunity to stand up for climate, jobs and justice, and save families money when they need it most, but instead he is choosing to stand with polluters.”
The White House declined to comment. Representatives of Schumer didn’t immediately respond to requests for comment.
In addition to throwing much of the Biden administration’s climate and economic legislative agenda into disarray, U.S. cooperation with an international agreement to levy a global minimum tax on companies appears to be in limbo.
Democrats planned to use the major tax and spending package to bring the U.S. into alignment on one of the two major parts of that agreement, negotiated by the Treasury Department and representatives from over 130 countries. The global talks remain ongoing, but a de facto U.S. withdrawal could throw sand in the gears of what appeared to be a unique international consensus.
Democrats had also promised to increase IRS funding, by $80 billion over 10 years, as a way to help bring in more revenue to balance with costs for their plan. Manchin has voiced support for that in the past, though it’s unclear what the status of that will be now that the broader package appears to have come apart.
— With assistance from Jordan Fabian and Laura Litvan
