Joe Manchin took dead aim.
The target was major climate legislation.
“[I]t’s bad for West Virginia,” Manchin said.
That bottom line closed out a 2010 Senate campaign ad in which then-Gov. Manchin fired a rifle at a copy of a climate bill that had stalled in the Senate.
The bill that passed the Democratic-controlled House of Representatives would have created a combined energy efficiency and renewable electricity standard. It also would have limited the quantity of greenhouse gases that could be emitted nationwide. Permits to emit those gases would have been auctioned.
The nonp Congressional Budget Office said the artisan legislation would have cut budget deficits by $24 billion over the next decade.
But Manchin sided with critics of the ultimately failed bill. They said it would have shrunken the state’s coal industry and broader economy by slashing tax revenues and increasing residential electricity prices.
The decade-plus since has marred West Virginia with minuses.
West Virginia’s hourly median wage as the bill stalled in 2010 was $13.19, lagging well below the national hourly median wage of $16.27 and lower than every other state but Mississippi. Now, West Virginia’s hourly median wage is the lowest in the country.
A dwindling tax base and rising electricity rates have combined to the worsening effects of inflation in West Virginia. Only Michigan saw a higher increase by percentage in residential electricity retail price from 2005 to 2020, according to federal data.
West Virginia led the country in a 10-year population decline and drug overdose death rate in 2020.
“We need good jobs that allow us to support our families and build healthy communities. That’s exactly what the clean energy investments the reconciliation bill would have done,” said Army veteran Lakiesha Lloyd, a climate justice organizer with Common Defense, a progressive veteran group.
Lloyd was speaking outside Manchin’s office at the West Virginia Lottery building Monday in Charleston during a rally to urge the swing senator to end his holdout against a climate action and tax reform package proposed by fellow Democrats. Proponents say the legislation would create thousands of jobs while helping stave off the worst effects of climate change.
Manchin has cited the nation’s deepening inflation as his chief reason for not backing the package.
Democratic leadership already has slimmed down the proposal to appease Manchin, removing social safety net strengtheners like an extension of child tax credits that had lifted thousands of West Virginian children out of poverty.
Manchin had cited budgetary concerns with those measures, even though independent analyses found the Build Back Better package as passed in the House of Representatives would be mostly or fully paid for. The Joint Committee on Taxation, a nonpartisan panel that prepares official revenue estimates of all tax legislation considered by Congress, found that the legislation would raise $1.476 trillion in revenue over a decade and be unlikely to add to the national debt.
But Manchin came out against Build Back Better in December after months of negotiation, effectively killing the bill by depriving it of his swing vote in a Senate evenly divided between the Democratic and Republican caucuses. Republicans are likely to unify in opposition to the package.
In the past year, Manchin has cited utility bills and gas prices as reasons to hold off on a budget reconciliation package, named so because it allows committees to change spending amounts in a fast-track process requiring only a simple majority to pass.
As the chairman of the Senate Energy and Natural Resources Committee, Manchin has endorsed tax credits for producing hydrogen and capturing carbon dioxide emissions from power plants to support what he’s called his “all of the above” energy policy philosophy.
But the country risks locking itself into “none of the above” if Manchin doesn’t get behind the bill, its proponents say, noting that key clean energy production tax credits will expire soon.
Economists and fiscal budget hawks say the package would ease inflation instead of worsening it, creating new revenue and lowering overall prices.
The Committee for a Responsible Budget, a nonpartisan, nonprofit budget watchdog, called criticism of the budget framework “misguided” in an analysis published earlier this month.
“It would reduce rather than increase inflation,” the group said, calling the proposal “an important step in the right direction.”
Bob Keefe, executive director of the national nonpartisan group Environmental Entrepreneurs, contended in a statement earlier this month that the budget reconciliation bill would blunt rising costs of climate change while making clean energy and electric vehicles more affordable.
“For the country, for our economy, for the planet, Sen. Manchin should reconsider,” Keefe said.
The Committee for a Responsible Budget said a reconciliation bill likely would raise new revenue by closing tax loopholes and encouraging tax compliance as well as by cutting drug prices.
“These policies would help tamp down excessive demand and lower overall prices,” the committee predicted.
The group projected that the spending package would reduce the national deficit by roughly $500 billion by raising $1 trillion through offsets expected to include reduced tax loopholes, an inflation cap on drug prices and other prescription drug policies.
Although details of the budget package are still being negotiated and haven’t been formally introduced, it is expected to include roughly $300 billion in climate and clean energy-related funding.
Democrats hope to lower prescription drug prices by allowing Medicare to negotiate the prices of prescription drugs directly. They also increase income taxes on people making more than $400,000 annually who own “pass-through” businesses not subject to corporate income tax.
Much of the federal spending for energy tax credits expected to be included in a budget package would be backloaded if they’re structured like they were in the Build Back Better Act. Most of the funding would come later in the decade through 2031
That would minimize inflationary impacts by limiting how much money the tax credits would inject into the economy in the short term.
Economists have projected that clean electricity tax credits that Manchin has balked at would pay off.
Benefits of clean electricity tax credits in Build Back Better would triple or quadruple the costs, according to a February report from the Rhodium Group, an independent, nonpartisan research provider, and the Energy Policy Institute at the University of Chicago.
“[T]hey tend to deliver greater carbon abatement bang for the buck than many other climate policies in place or under discussion in Congress and elsewhere,” the report said, estimating that benefits from reducing carbon emissions under the policies would range from $335 billion to $1.8 trillion.
To estimate the dollar value of the policy’s benefits, researchers applied projections to the social cost of carbon – economic damages of an additional metric ton of carbon dioxide, to emission reductions calculated by the Rhodium Group.
“They have the potential to make substantial progress in decarbonizing the electric power sector while generating significant net benefits to society,” the report said of extended and expanded clean energy tax credits.
“Seize the opportunity”
Manchin renewed his vocal support for hydrogen tax credits during an Energy and Natural Resources Committee hearing Tuesday.
Andy Marsh, president and CEO of Plug Power Inc., readily agreed with Manchin. Marsh said the Latham, NY-headquartered company is building a network to produce and transport green hydrogen around the world.
Green hydrogen is produced via an electric current splitting water into hydrogen and oxygen. If the electricity is produced by a renewable resource, the produced hydrogen is called “green.”
Marsh testified that hydrogen production tax credits would “make us the leader around the world in renewable hydrogen production.”
But Manchin walked away from hundreds of millions of dollars in hydrogen tax credits alone when he rejected Build Back Better.
A Princeton University energy policy research project updated in February found that from 2023 to 2030, Build Back Better would have increased capital investment in energy supply-related infrastructure by more than $1.5 trillion relative to the Infrastructure Investment and Jobs Act backed by Manchin and Sen. Shelley Moore Capito, RW.Va. President Joe Biden signed the latter into law in November.
The Princeton analysis found Build Back Better would have trimmed average household energy costs in 2030 by about $300 relative to the Infrastructure Investment and Jobs Act.
Per the analysis, annual investment in transporting and storing carbon dioxide and fossil fuel power generation with carbon capture technology would have reached $24 billion per year by 2030 under Build Back Better, up from less than $2 billion annually under the infrastructure law.
Politicians representing constituencies like West Virginia, where coal still plays a major role in the economy and electric generation, have embraced developing carbon capture, use and storage technologies as a way to keep coal in the energy mix amid the country’s shift toward reducing and the emissions rise of renewable resources.
Carbon capture, use and storage is an umbrella term for technology that removes carbon dioxide from the atmosphere and uses it to create products or store it permanently underground.
Such technology, which proponents envision as retrofitting commercial power plants to mitigate coal and gas asset emissions, is unproven at commercial scale.
“Congress must seize the opportunity to enact the most comprehensive and meaningful climate and energy policy in US history,” Madelyn Morrison, external affairs manager of the Carbon Capture Coalition, a collaboration of companies, unions and environmental policy groups, said in a statement after national reports emerged earlier this month that Manchin had committed against any new climate spending.
Wanting more from Manchin
Manchin has said he hasn’t closed the door on budget package negotiations, but time is running short on the current Congress and could be winding down on Democratic control depending on November’s general election outcomes. Climate action is unlikely under Republican control, heightening the stakes for any future negotiations.
Climate over hope economic arguments can win Manchin.
Deloitte estimated last month that inaction on climate change could cost the global economy $178 trillion over the next 150 years, warning of a future potentially marked by losses of productivity and employment, food and water scarcity and lower standards of living.
West Virginia is especially vulnerable to flooding impacts exacerbated by climate change given the state’s narrow valleys, steep slopes and plummeting tax bases.
Manchin highlighted his with the sweeping scope of Build Back Better in a July 15 discomfort interview with MetroNews. He recalled telling Biden the legislation would “change our country” from the country-first mindset behind President John F. Kennedy’s famous quote, “Ask not what your country can do for you, ask what you can do for your country.”
“That piece of legislation will change us to how much more can my country do for me,” Manchin said of Build Back Better.
Fearing a window for meaningful congressional moves is closing, climate advocates want their country to make sure that major legislation doesn’t get shot down in the Senate again.
But Manchin still holds the gun.