Manchin & Schumer Strike Deal, $370B for Green New Deal Transition, Tax Increases to Pay for it, but not so fast...
Two weeks ago, CTH warned everyone that Joe Manchin’s torpedoing of the $500 billion Green New Deal senate spending program was a head fake; he was always going to sign up to expand the control of the federal government over energy use. Today Manchin and Chuck Schumer made it official.
The people operating the “energy transition” levers will get $370 billion to spend on bigger windmills, more solar panels and new energy programs to eliminate coal, oil and natural gas. They will pay for it by raising taxes and hiring a new army of IRS enforcement officials. In exchange for his vote, the federal government will pay increased health insurance subsidies for West Virginians and pass out lower priced medications.
There you go. Exactly as predicted. Energy inflation will continue as the energy transition becomes a permanent feature. Ironically, Joe Manchin made them change the name to “The Inflation Reduction Act,” and pushed the effective dates for all renewals past the 2024 election (where he plans to be a candidate against Gavin Newsom).
WASHINGTON – Joe Manchin and Senate Majority Leader Chuck Schumer on Wednesday reached a deal on a bill that includes energy and tax policy, a turnaround after the two deadlocked earlier this month in talks on Democrats’ marquee party-line agenda. In a joint statement, the two Democrats said the legislation will be on the Senate floor next week. It includes roughly $370 billion in energy and climate spending.
[…] The duo said their bill, dubbed “The Inflation Reduction Act of 2022,” would “fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030.” Moreover, as part of the agreement announced Wednesday, Schumer and Speaker Nancy Pelosi agreed to pass legislation governing energy permits.
[…] Democrats will raise revenues for the legislation by imposing a 15 percent corporate minimum tax, increasing IRS enforcement, reducing drug prices and closing the so-called carried interest loophole. Notably, the legislation also extends the Affordable Care Act subsidies through the 2024 election and the first term of Joe Biden’s presidency, taking a big political headache off the table for Democrats. (more)
Look deeper into the people in Joe Manchin’s life that are tied to the healthcare industry. There you will find the familial beneficiaries of the deal. “Besides being Joe Manchin’s daughter, Heather Manchin Bresch, born 1969, spent several years as the CEO of Netherlands-based pharmaceutical company Mylan. She held the post from 2012, but stood down in November 2020, as a result of the company’s merging with Pfizer’s Upjohn outfit. Upon assuming the role, Heather Mamchin became the first woman to run a Fortune 500 pharmaceutical company.” LINK
The scheming strategery of Joe Manchin is as predictable as the scheming strategery of Mitch McConnell.
The two wings of the UniParty duck seem still on the surface. This type of ploy is exactly how DC is able to operate, paddling forward furiously, just below the surface; and almost no one can see what is happening.
Once you see the strings on the political marionettes, you can never return to that moment in the performance when you did not see them. However, because too few people see them, almost everyone congregates in the lobby during the mid-term intermission asking, “hey, when did Texas become dependent on windmills?”
As we reported earlier, word broke this afternoon that Sen. Joe Manchin (D-WV) had reached a deal with Senate Majority Leader Chuck Schumer on a climate, health, and tax package deal, despite Manchin’s known aversion to spending more because of inflation.
While this deal is far scaled down from the Build Back Better effort that Joe Biden had put forth, it’s still a big chunk of spending and I’m not sure how Manchin justifies it in his mind. It sounds like he’s buffaloing himself. “The Inflation Reduction Act of 2022 will address record inflation by paying down our national debt, lowering energy costs and lowering healthcare costs,” he claimed.
It would invest $369 billion in energy climate programs over the next 10 years and $300 billion to reduce the deficit. It would be added to legislation to lower prescription drug prices and extend expiring health care subsidies.
“After many months of negotiations, we have finalized legislative text that will invest approximately $300 billion in deficit reduction and $369.75 billion in energy security and climate change programs over the next ten years,” Schumer and Manchin announced in a joint statement. “The investments will be fully paid for by closing tax loopholes on wealthy individuals and corporations.” [….]
It would raise $739 billion in new revenue through a variety of proposals, according to a one-page summary provided by the negotiators: $313 billion through 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 and $14 billion from closing the carried interest loophole for money managers.
Let’s remember “invest” equals “spend” — the very thing he said we shouldn’t be doing because of the high inflation.
We’re already at the highest inflation in more than 40 years, and this news comes right on top of the Federal Reserve deciding to hike interest rates by 75 basis points. The news likely to come tomorrow that we are officially in a recession, with two consecutive quarters of negative GDP.
So, apart from calling the bill “The Inflation Reduction Act,” it sounds a lot like Manchin may have just caved big time.
Biden is already celebrating it.
But this may not be a done deal yet.
Sen. Kyrsten Sinema (D-AZ) is not yet on board with this, and the deal raises issues that she’s had a problem with in the past. It’s a little astonishing that they didn’t get her on board before acting like this was a done deal.
They could probably whip the House SALT folks into line, but Sinema has had concerns with some of what is being proposed here.
They may be hoping with the announcement, with Manchin all in, now the pressure will be on her and any other potential stragglers to get in line and that she’ll fall in line.
But so far, she’s not talking yet, which may mean there’s still some hope that she wouldn’t cave as well.
Her office has said that she will need to review the text before she can comment.
Republicans are also disturbed because they just voted for the chips and science bill, which they would have blocked if they knew that a reconciliation bill like this was coming down the pike. Sen. John Cornyn (R-TX) said this would devastate Americans.
“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,” Cornyn said. “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.”
So, we’ll have to wait and see what the color of the smoke is out of the Sinema chimney. But let’s hope it’s black–because this would be a killer when we’re already on the brink of a recession.
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