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“U.S. Democratic Senator Joe Manchin said on Wednesday he has reached a deal with Senate Democratic leader Chuck Schumer on a bill to increase corporate taxes, reduce the national debt, invest in energy technologies and lower the cost of prescription drugs…
“The bill includes $430 billion in new spending on energy, electric vehicle credits and health insurance, and more than pays for itself by raising minimum taxes for big companies and enforcing existing tax laws, Schumer and Manchin said in a statement… [They also said] that the bill would reduce the nation's deficit by about $300 billion, lower carbon emissions by about 40% by the year 2030 and allow the government's Medicare health plan to negotiate prescription drug prices.”
Reuters
The left supports the bill, arguing that it will reduce the deficit and fund much-needed climate programs.
“The bill would enable Medicare to use its heft to negotiate prices with Big Pharma, which should sharply reduce the cost of certain drugs. The bill would also cap seniors’ prescription-drug bills at two thousand dollars a year, which would help people who pay exorbitant prices for medicines. And, over the longer term, stimulating green-energy production will reduce the demand for fossil fuels and make American households and businesses less vulnerable to rising oil prices…
“Unlike most spending bills, it will reduce the budget deficit. The new taxes and cost reductions it includes are larger than the new spending—a fact that has already earned it the support of budget hawks. ‘The best thing Congress can do to avoid a recession is to help the Federal Reserve fight inflation,’ Maya MacGuineas, the president of the nonpartisan Committee for a Responsible Federal Budget, said in a statement. ‘Legislation focused on lowering health care and energy costs, raising revenue, and reducing deficits may be exactly what the doctor ordered.’”
John Cassidy, New Yorker
“For the past decade, the U.S. has encouraged the growth of wind and solar through a particularly kludgy set of tax credits. For instance, a developer could get a tax break by investing in, but not producing, solar power. And if Congress wanted to increase the market share of any new zero-carbon form of power generation, it had to pass a new law creating a tax credit for that specific technology… The new bill will significantly broaden the scope of these incentives, replacing them with technology-neutral tax credits that can be used for any low- or zero-carbon form of power generation…
“A few weeks ago… I set out two questions by which any climate legislative effort should be judged: First, would the bill reduce U.S. emissions on net compared with doing nothing at all? (By that point, it seemed likely that Schumer would concede some amount of new fossil-fuel development to Manchin.) And, second, would the bill make global decarbonization more likely? That is, would it help make zero-carbon technologies cheaper, help produce them in abundance, and generally strengthen the political position of those who want to see the world decarbonize? The bill aces both tests.”
Robinson Meyer, The Atlantic
“For the first time — buyers can receive a credit of up to $4,000 for buying a used [electric car]… [The bill would also] provide $9 billion to encourage low-income families to use energy-efficient home appliances and offer tax credits for the next decade to consumers who make their homes more efficient by installing heat pumps, solar panels and other emissions-free or energy-saving devices. The bill encourages and enables each of us — as individuals, as families, as neighborhoods — to do our part…
“The United States once led the world in producing solar panels; now, the leader is China. Wouldn’t it be great if that technology reached the point where solar panels looked and were installed just like regular shingles, a dream Tesla’s Elon Musk has floated but not quite achieved? Wouldn’t it be even better if that breakthrough were made in San Antonio rather than Shenzhen?”
Eugene Robinson, Washington Post
The right opposes the bill, arguing that tax increases and green subsidies will harm the economy.
The right opposes the bill, arguing that tax increases and green subsidies will harm the economy.
“It was just twelve days ago that Manchin told a West Virginia radio host on air that he couldn’t even contemplate a deal until he saw the inflation numbers for July. The July inflation numbers don’t get released until August 10… So, no, Joe Manchin did not stumble across some new bit of economic data about inflation that changed his mind on whether to move ahead with a deal…
“Barring some major Democratic defection, there’s likely to be one more big spending surge and a round of tax hikes thrown into this already-inflationary economy before the midterm elections. You just can’t save a majority party that isn’t willing to save itself. Alas, we’re all forced to live under the tax code they rewrite and in the economy they reshape.”
Jim Geraghty, National Review
“Is their aim to reduce inflation by chilling business investment and the economy?… Start with the 15% minimum tax on corporate book income over $1 billion, which Democrats claim will raise $313 billion through 2031. This new alternative minimum tax will slam businesses whose taxable income is lower than the profits on their financial statements owing to the likes of investment expensing, tax credits and business deductions. Many companies pay less than the 21% corporate tax rate because they can expense investments under the tax code up-front. Hence, the new tax will increase the cost of business investment…
“Yet green-energy tax credits would be exempt from the new tax. Businesses will have more incentive to sink money into green ventures whether or not they are the best uses of corporate capital… Auto makers will get $20 billion in cheap federal loans for building ‘clean vehicle’ factories. The Biden Administration is using regulation to essentially mandate that auto makers churn out electric vehicles. Now taxpayers will subsidize that cost, on top of the $7,500 EV tax credits so affluent Americans can buy more Teslas…
“Democrats are also giving Energy Secretary Jennifer Granholm’s green venture-capital fund a $40 billion infusion. How many Solyndras will that fund?”
Editorial Board, Wall Street Journal
“The White House wants to slash greenhouse gas emissions by 50 percent off of 2005 levels by 2030. Given that we’ve only cut them 12 percent, that’s a long way to go in only eight years. Other nations like the Netherlands and Canada are attempting similarly steep cutoffs, and look at how that’s working out. Move this quickly and inevitably the little guy, the farmer and the fracker, gets left behind…
“Consider, for example, a largely overlooked provision in the Manchin plan: the methane fee. This would impose an effective tax on methane emissions, which disproportionately come from natural gas. That will hurt small-town frackers, energy consumers — the little guy, in other words, in places like West Virginia, whose interests Joe Manchin is supposed to protect…
“So why did Manchin agree to this? The working theory is that he was wooed by a promise from Biden to approve the Mountain Valley Pipeline, which would export shale gas from his home state. Whatever the case… Here’s to wishing he’d stood stronger.”
Matt Purple, Spectator World
