Manchin, Schumer cut deal with big clean-energy funding

Manchin and Biden in early 2017 (Photo by Tom Williams, Roll Call)

When the Biden administration began in January 2021, with Democrats controlling the Senate on Vice President Kamala Harris's tie-breaking vote, the senator in the catbird seat was Democrat Joe Manchin of West Virginia, more conservative and coal-oriented than the rest of his colleagues. For more than a year and a half, Manchin, Biden and Senate Majority Leader Chuck Schumer have struggled to agree on Biden's "Build Back Better" bill. Now they have a deal, and it's much smaller.

Manchin and Schumer announced an agreement today on a package to reduce the federal deficit while lowering health-care costs and investing a record $369 billion in climate and clean energy programs, Politico reports. (Here's the full text of the bill.) Over the next decade, the package would raise $739 billion in revenue, spend $433 billion, and reduce the federal deficit by about $300 billion, according to Senate Democrats' analysis. It contains no new taxes on small businesses or families making less than $400,000 a year, a Biden campaign promise.

"Their agreement, which came after Manchin had rejected climate and energy measures two weeks ago under the Democrats’ reconciliation package, is aimed at slashing carbon emissions an estimated 40 percent from 2005 levels economy-wide by 2030," Politico reports. "But it also comes with plans to ease rules that the West Virginia senator has said are constricting fossil fuel production and slowing needed upgrades to the power grid."

The streamlined permitting procedures in the bill also aim to speed the implementation of clean-energy projects, which Manchin has been leery about. "People familiar with the effort to bring Manchin back to the table on climate said there had been an intensive effort to convince him of the merits of supporting the new technologies — including from company executives who came forward with new plans to build manufacturing in West Virginia," Politico reports.

The energy portion of the bill subsidizes the purchase and manufacture of electric and hydrogen-fueled vehicles, and includes tax incentives and rebates to help people make their homes more energy-efficient and promote the construction of energy-efficient affordable housing, The Wall Street Journal reports. It also includes tax credits to help utilities transition to clean energy production, and for domestic production of clean-energy tech such as wind turbines, solar panels, and critical minerals processing (Rare earth elements for electronics can be extracted from coal waste, which could bring new life to West Virginia coal mines). And, the bill includes a program to reduce methane emissions from natural gas wells and pipelines.

The package specifically seeks to ensure that "rural communities are at the forefront of climate solutions," according to the summary, and includes more than $20 billion to support climate-smart farming practices; $5 billion in grants for fire-resilient forests, forest conservation, and urban tree planting; tax credits and grants to promote domestic biofuels production, and $2.6 billion to conserve and restore coastal habitats and protect the rural communities that depend on them.

The package also has health-care measures that would benefit many rural residents. It would allow Medicare to negotiate some prescription drug prices with pharmaceutical companies and limit Americans' out-of-pocket costs to $2,000; it would also extend key health-insurance subsidies through 2025. The bill aims to raise revenue through a 15% corporate minimum tax, closing tax loopholes and enforcing existing tax codes, Alex Thomas reports for MetroNews in West Virginia.

The Senate could vote on the bill as soon as next week. Senate Republicans are set to oppose it unanimously, but if the Senate Parliamentarian decides the bill can be passed by reconciliation, only a simple majority vote would be required. The House has yet to pass the bill, but with House Speaker Nancy Pelosi and President Joe Biden both endorsing it, its chances look good.