Me, I always had faith in Sen. Joseph Manchin III.
You, having become a bit cynical lately, may have looked at the $1 million the West Virginia Democrat and his wife rake in annually from their coal business and the sadistic delight he takes in killing the hopes and dreams of Democrats, then bringing them back to life only to kill them again. You may have seen all of that and lost faith. But not me.
I’m kidding, of course. On Wednesday evening, seemingly out of thin air, Manchin and Senate Majority Leader Chuck Schumer, D-N.Y., put out a joint statement announcing that they had come to terms on a deal — an entire bill — that they called the Inflation Reduction Act of 2022. I can’t recall a major deal ever being announced without the Capitol Hill press corps knowing that negotiations were taking place.
The outline of the deal, as announced by the pair, looks like this:
The $369 billion for “energy security and climate change,” if it becomes law, will change the world. It represents the biggest climate investment made by any country ever, and it will unlock potentially trillions in private capital, which is waiting on the sidelines for the types of subsidies, credits, and guarantees that this bill will include. It’ll also spur other countries to make their own investments, not wanting to fall behind in the industry that will dominate the next century. It’s projected to reduce carbon emissions in the U.S. by 2030 by 40 percent. That’s huge.
“An initial review of the agreement indicates that this will mark a historic direct investment in renewable energy and will unleash hundreds of billions of private investment for moonshot projects,” Rep. Ro Khanna, D-Calif., told me Wednesday evening after the deal was announced. Khanna has spent months working with Manchin to keep him in talks, and it looks like that finally paid off.
“Activists who have been insisting on getting something done on climate should feel proud that we’ve gotten to this point,” he added. Even if the bill doesn’t do everything it ought to, it at least gives humanity a shot.
Climate hawks will criticize the bill for its “energy neutral” approach. The kinds of subsidies made available for clean energy are supposed to be available to projects that clean up dirty energy too, and cleaning coal is seen by many as a ruse actively deployed to stall the transition to clean, renewable energy.
However, looking at the reality of our energy infrastructure, fossil fuels are going to be with us for a very long time. Reducing and/or sequestering their carbon emissions during the transition is essential. It’s the unfortunate reality we’ve been dealt. If this money can spark some exponential technological development in that direction, we’ll all be better off.
Secondly, if all that fails and the carbon tech stuff is all fluff, subsidizing it was still worth the payoff to Manchin to get the clean energy money, because there was no other way at this point. If Republicans take Congress next term, there’s no telling when the window might open again.
And third, it seems like Manchin extracted concessions that could make permitting future fossil fuel projects easier. That’s bad. But those are fights to be had in the future, against a win today.
The Rest of the Bill
I obviously haven’t read the full bill yet, which is more than 700 pages long, but based on what’s known from previous talks, a few things are clear:
The 15 percent corporate minimum tax only hits companies with profits of more than $1 billion a year and operates as a business version of an alternative minimum tax, which, if you’re one of my more well-off readers, you’re familiar with. This is payback from Manchin to Senate Minority Leader Mitch McConnell, R-Ky., for cutting him out of negotiations over the Trump tax cuts. He said so explicitly in a private meeting with the big-money group No Labels last year, which The Intercept obtained audio of.