Joe Biden’s cynically named “Inflation Reduction Act” (IRA) is one year old, but the implementation of the law is, as Forbes calls it, a mess.
“Industrial policy” is merely corporate welfare by another name. It’s about politicians picking winners and losers in the marketplace, assuring the politically connected and privileged maintain a leg up over those who play it straight. The IRA includes $391 billion in energy and climate spending over 10 years, with much of the “spending” coming in the form of tax credits, deductions, and rebates. That’s according to Congressional Budget Office (CBO) estimates, but the real cost could be be far higher. Credit Swiss says the climate and clean energy provisions will cost more than double what CBO estimates, around $800 billion, and an analysis from Goldman Sachs says the true cost is closer to $1.2 trillion.
Sen. Joe Manchin (D-W.Va.) was one of the architects of the IRA, and when he was advocating for its passage, he praised the bill’s potential to lower the debt and advance an “all-of-the-above energy policy.”
But Manchin is now singing a different tune. Biden, Schumer, and the climate radicals in the Senate double-crossed him, and he’s hopping mad about it.
“Going forward I will push back on those who seek to undermine this significant legislation for their respective political agenda,” Manchin said. “That begins with my unrelenting fight against the Biden administration’s efforts to implement the IRA as a radical climate agenda instead of implementing the IRA that was passed into law.”
Manchin is being a little disingenuous. After all, there were hundreds of billions of dollars earmarked for green projects, including more than 270 new clean energy projects announced since its passage, with investments totaling some $132 billion, according to a Bank of America analyst report.
But the subsidies for all these nice, new, shiny green projects are going to kill the economy. And that’s what Manchin is concerned about.
These generous subsidies aim to scale up energy production from renewables and boost electric vehicle sales, all while promoting domestic manufacturing. However, this massive Green New Deal-style intervention was rammed through Congress on purely partisan lines. Not a single Republican in the House or Senate voted for it. The Competitive Enterprise Institute, my employer, has produced a letter urging members of Congress to put an end to these outrageous subsides. Forty groups have signed on.
It’s a “radical climate agenda” instead of the “all of the above” energy development promised in the bill.
“Make no mistake, the IRA is exactly the kind of legislation that in normal political times both political parties would proudly embrace because it is about putting the interests of Americans and West Virginians first,” he said in a Wednesday statement. “Going forward I will push back on those who seek to undermine this significant legislation for their respective political agenda, and that begins with my unrelenting fight against the Biden administration’s efforts to implement the IRA as a radical climate agenda instead of implementing the IRA that was passed into law.”
Manchin made a deal to vote for the IRA if Biden and the Democrats would push for the completion of West Virginia’s Mountain Valley Pipeline. He was also promised a deal on energy permitting reform. But Biden has changed the rules on power plant emissions, which has caused Manchin to break with Biden and oppose further implementation of the IRA.
Washington greenlighted the completion of West Virginia’s Mountain Valley Pipeline earlier this year as a reward for his vote, but Manchin has waged a protracted fight with Biden over what he says is the administration’s preference for clean energy over the “all-of-the-above” energy strategy prescribed by the law.
Manchin, the chairman of the Senate Energy and Natural Resources Committee, has since May placed a hold on all Environmental Protection Agency nominees over a Biden rule on power plant emissions and declined an invitation to attend a White House event celebrating the law’s passage.
Biden and Schumer are going to rue the day they agreed to let Manchin chair the Senate Energy and Natural Resources Committee. The West Virginian can make a lot of trouble going forward, especially since he’s likely to pick up many Republican allies along the way.