In classic fashion, Sen. Joe Manchin (D-WV) has torpedoed a deal he spent weeks negotiating with Senate Majority Leader Chuck Schumer (D-NY), likely ending any hope of passing climate legislation before the midterms and heightening the threat of an impending health care crisis.
The negotiations were an attempt to salvage pieces of 2021’s Build Back Better reconciliation package, a sweeping bundle of climate proposals, health care cost relief and social programs that Manchin killed during a December TV hit after stringing his fellow Democrats along for months.
This is exactly the deal Manchin wanted.
Upon his unceremonious slaying of the Build Back Better package, which he’d already whittled down extensively, Manchin insisted in early 2022 that there was a form of the reconciliation bill that he would support. It would focus narrowly on climate change, reducing prescription drug prices and raising taxes on the wealthy, he said at the time.
“If you do that, the revenue-producing [measures] would be taxes and drugs,” he told Politico. “The spending is going to be climate.”
In keeping with exasperated Democratic calls to just “let Manchin write the bill,” Schumer appeared to spend much of this year negotiating entirely on Manchin’s terms. Prized Democratic priorities like extending the enhanced child tax credit and universal free pre-kindergarten have long been left on the cutting room floor.
They were hashing out a modest bill centered on climate and tax hikes on the wealthy.
That included tax credits for clean energy and penalties on methane gas emissions, according to the Washington Post. Initial Biden administration dreams of banning offshore drilling and establishing the Civilian Climate Corps are long dead, but to sum up the activist and environmentally-minded Democratic response: it was far better than nothing.
Critically, the negotiations also involved finding a solution to extend tax subsidies that lower the cost of health care coverage purchased through the Affordable Care Act’s exchanges. (More on that later.)
In addition, Manchin reportedly signed on to a plan that would close a loophole and raise taxes on some high-income Americans to extend the solvency of Medicare just days ago — but seems to have reneged on that as well. Democrats had once fostered grand plans of totally reworking the tax code and unwinding the Trump tax cuts of 2017, but Sen. Kyrsten Sinema (D-AZ) scuttled that last year by opposing tax hikes on the wealthiest Americans and corporations.
Schumer and Manchin had also brokered a deal to lower prescription drug costs for seniors by empowering Medicare to negotiate the costs of some medicines, and to penalize pharmaceutical companies that raise their prices faster than inflationary increases.
Catching wind of the Democratic deal-making, Senate Minority Leader Mitch McConnell (R-KY) threatened to scuttle a bipartisan bill on computer chips if Democrats didn’t abandon their reconciliation plans.
Manchin falls back on the same old inflation excuse.
We’ve seen this movie before. The reason for Manchin’s last-minute reversal on the carefully crafted deal? His enduring concerns about inflation.
“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,” his spokesperson said.
What exactly he proposes to do about high inflation rates remains unclear. Though it reached a new peak earlier this week, inflation has remained high throughout the duration of negotiations on the slimmed-down package.
It’s the same excuse Manchin used to sink Build Back Better, despite expert consensus that the package would not have had any significant inflationary effect.
We’re now on the brink of a massive and catastrophic Affordable Care Act crisis.
The 2021 American Rescue Plan included massive changes to the Affordable Care Act, making coverage suddenly within financial reach for millions of people.
Tax credits reducing or eliminating out-of-pocket premiums, newly available to more people, made coverage affordable for low- and middle-income households and led to record enrollment. During the open enrollment period, 14.5 million people selected marketplace plans thanks to the beefed up credits, up from 12 million in 2021.
But those enhanced tax credits are set to expire at the end of the year. If Democrats don’t act to extend them through reconciliation — Republicans oppose the subsidies — nearly 13 million people will either lose their coverage or see their premiums rise, some drastically. Over three million of those will lose their coverage altogether and become uninsured in 2023, according to some estimates.
Adding political insult to real-life injury: Americans would find out about the potentially ruinous rise in their health care coverage expenses in October, just as ballots are arriving for the midterms.
Manchin had previously agreed to the two-year run of the subsidies, though has expressed a desire to limit the credits depending on people’s income. Manchin has long declared himself opposed to an “entitlement state” — a position that has mostly manifested in his attempts to make aid less universal.
Ironically, his home state of West Virginia has the most to lose, as its inhabitants have saved more in annual premiums than any other states’ through the HealthCare.gov platform.
Manchin told business executives this week that he’s still on board for a plan that lets the government negotiate drug prices for Medicare recipients and includes an extension of the ACA tax subsidies, per the Washington Post.
Such a deal would be unrecognizable from the ambitious vantage point of Democrats last winter — but letting the ACA subsidies expire is not really an option.
Manchin also said Friday on a local radio show that he could conceivably still support a climate and taxation plan — but only if July inflation rates drop.
Democrats are reacting to Manchin’s latest betrayal.
With congressional action on climate now seemingly completely off the table, some are calling for the administration to take up what slack it can.
Sen. Sheldon Whitehouse (D-RI) tweeted out a list of executive actions he hoped the administration would take, including requiring carbon capture technology on all major emitters, stronger emission controls on cars and trucks and telling the Department of Justice to evaluate successful tobacco-style litigation to use in the climate framework.
“Free at last. Let’s roll. Do it all and start it now,” Whitehouse wrote. “With legislative climate options now closed, it’s now time for executive Beast Mode.”
The Congressional Progressive Caucus re-upped its executive action agenda from earlier this year, including in its climate proposals invoking the Defense Production Act and Trade Expansion Act to kickstart domestic production of renewable energy technologies and declaring a ban on fossil fuel leases on federal lands and waters.
“We have an opportunity to address the climate crisis right now,” Sen. Martin Heinrich (D-NM) tweeted. “Senator Manchin’s refusal to act is infuriating. It makes me question why he’s Chair of ENR,” he added of the Senate committee on Energy and Natural Resources.
“It’s infuriating and nothing short of tragic that Senator Manchin is walking away, again, from taking essential action on climate and clean energy,” Sen. Tina Smith (D-MN) said in a statement. “The world is literally burning up while he joins every single Republican to stop strong action to cut emissions and speed the transition to clean energy for the survival of our planet, clean air and health, energy independence, and lower energy prices. One Senator should not have the power to stop the progress we desperately need on the climate crisis.”