All last week, Manchin remained silent on the talks, even though most senators, staffers and reporters had stopped by: “I didn’t know if it could come to fruition. I really didn’t know, OK, so why talk about something, again, get people’s hopes up? I have everyone’s anger.”
That anger turned to jubilation in the Democratic Party Wednesday night after Manchin and Schumer announced what they dubbed the “Inflation Reduction Act of 2022,” which is scheduled for the Senate next week. There are still significant concerns about whether he can abide by House rules to avoid a filibuster, and Sen. Kyrsten Sinema (D-Ariz.) has yet to sign on, but Manchin’s deal with Schumer is the best news for to the democrats in weeks
Also, Manchin’s announcement came hours after the final passage of the semiconductor legislation, a bill that Republicans threatened to block just weeks ago in an effort to prevent Democrats from pursuing a package of ‘taxes, climate and party health.
The Manchin-Schumer deal includes roughly $370 billion in energy and climate spending, $300 billion in deficit reduction, three years of Affordable Care Act premium subsidies, prescription drug reform and tax changes significant Manchin said the bill was at a point “bigger than that,” but that’s where the two Democrats settled.
As part of the deal announced Wednesday, Schumer and Speaker Nancy Pelosi agreed to pass legislation regulating energy permits. Manchin said he spoke with Schumer, Pelosi and President Joe Biden on Wednesday.
After Manchin’s talks with Biden stalled last December over the broader Democratic bill known as Build Back Better, Manchin recalled Biden telling him, “Joe, it’s not going to help me to be involved in this. .. if you can do something, fine. If not, I understand.”
“You know, as an old senator, he understands that things are a little difficult at times,” Manchin said. In a statement, Biden thanked Manchin and Schumer for their work and described the deal as “the action the American people have been waiting for.”
After Manchin’s stated interest in limiting a party-line domestic policy bill to health care and lowering prescription drug prices without further information on inflation, Democrats were expected to introduce a bill that did not include climate or energy provisions. But Manchin and Schumer continued to negotiate quietly behind the scenes, mostly through staff, leading to a surprise breakthrough while Manchin sidelined with Covid.
“There was no pressure. The easiest thing for me is to walk away and do nothing … just walk away,” Manchin said. “It didn’t, because it wasn’t the right thing to do.”
The deal roughly mirrors what Manchin first laid out earlier this year as his goals for the party-line bill, albeit with a more limited tax title. Democrats plan to raise revenue for the legislation by imposing a minimum corporate tax of 15 percent, increasing IRS enforcement, reducing drug prices and closing the so-called carried interest gap.
Notably, the legislation also extends Affordable Care Act grants through the 2024 election and the first term of Biden’s presidency, taking a major political headache off the table for Democrats. Manchin said it “helps people because you just can’t pitch [increases] about them during inflammatory times like this.”
It does not include surcharges on people making more than $10 million a year, ending most Democrats’ push to impose higher rates on the wealthy; nor does it include a global tax settlement. Manchin said the bill should in theory be bipartisan, but he believed Republicans would never touch the corporate tax code.
He also saw this moment as the last and best chance for Democrats given the uncertainty heading into the midterms.
“In any other environment [than] what we have now, that would be a bipartisan bill. I really believe so. That’s the only vehicle I have to work with now,” Manchin said. “We don’t know what the future holds. But every sign could be a little bit of a shift. And that changes the dynamic of doing something.” added.
Another twist: Manchin said the final deal leaves out new incentives for electric vehicles, which he had resisted in what became a major sticking point in the negotiations. Manchin said the bill provides incentives to make new car batteries in America “and not only be able to assemble them, but be able to mine the minerals that we need, critical minerals, in North America.”
Schumer held a call Wednesday evening with committee chairs who have jurisdiction over climate, as well as senators focused on the issue. The deal with Manchin includes a methane fee and a $4,000 tax credit for the purchase of used electric vehicles, according to two Democrats familiar with the matter.
The bill also includes efforts to make fossil fuels cleaner, Manchin said, as well as to increase production to help US allies amid Russia’s invasion of Ukraine, which has limited European fuel supplies.
Sinema learned of the deal Wednesday afternoon and had no immediate comment. Asked about the deal, Majority Whip Dick Durbin (D-Ill.) replied, “That’s news to me.” Others declined to comment, saying they had not yet seen the details. Sen. Chris Van Hollen (D-Md.) said his “first clue” was Manchin’s press release.
“There were hints, but no one wanted to say anything until it landed,” said Sen. Sheldon Whitehouse (D-R.I.). “But it’s a good thing it landed.”
After months of difficult negotiations — and the expectation by many that any hope of a climate deal with Manchin had been lost — Democrats were upbeat Wednesday afternoon, even as the details of the agreement had not yet been announced. Sen. Elizabeth Warren (D-Mass.) put it this way: “At least we’re using the word ‘climate.’ It’s a good start.”
How the bill plays out in the House will also be important. Progressives were happy, with Rep. Pramila Jayapal (D-Wash.) calling it a “really important victory.”
And moderate Rep. Josh Gottheimer (D-N.J.), who has made state and local tax relief his red line, would not commit to whether he would pursue it even if his priority was left out of the bill: “Until I see details, it’s hard to know.”
Senate Republicans attacked Manchin for agreeing to a deal with Schumer after praising him for stalling several iterations of party-line legislation. Sen. Lindsey Graham (R-C.) said in a statement that he could not believe Manchin would “agree with a massive tax increase in the name of climate change when our economy is in recession.”
Manchin said he understands the legislation will divide Washington and potentially change his reputation. Instead of the man who obstructed Biden’s agenda, Manchin is now the deep-red West Virginia Democrat who cut a major climate change deal three months before the election.
“I’m sure all the experts will come out [from] now in different directions, but I’m not worried about me,” Manchin said. “I don’t think you can be attacked any more than I’ve been attacked for a year. So I don’t know what else they could do to me.”
Anthony Adragna and Jordain Carney contributed to this report.
