U.S. Sen Joe Manchin (D-WV) handed the Biden administration a major win by reaching a compromise with party leaders on a massive budget reconciliation deal.
He agreed to a slimmed-down package with a price tag of nearly $500 billion, which includes handouts for electric vehicle purchases. Just a few months earlier, however, the West Virginia Democrat dismissed the push for such tax credits as completely unnecessary and wasteful.
In April, Manchin noted that there was “a waiting list” for electric vehicles amid skyrocketing fuel prices, calling it “absolutely ludicrous” for progressives in his own party to push for additional incentives.
“We can’t produce enough product for the people that want it and we’re still going to pay them to take it,” he said at the time.
The previous month, he declared his reluctance “to go down the path of electric vehicles,” expressing concerns about recreating the panic of gas shortages nearly 50 years earlier.
“I’m old enough to remember standing in line in 1974 trying to buy gas,” Manchin said in March. “I remember those days. I don’t want to have to be standing in line waiting for a battery for my vehicle because we’re now dependent on a foreign supply chain, mostly China.”
He has apparently reconsidered that position since then and is now voicing his support for tax credits worth as much as $7,500 for Americans purchasing electric vehicles. As stipulated in the proposed legislation, families earning under $300,000 per year would qualify for a tax credit for any electric vehicle that costs under $80,000.
The bill is called the Inflation Reduction Act, although Manchin has previously expressed concerns that additional federal spending would only exacerbate rising consumer costs.
In addition to his flip-flop on electric vehicle tax credits, he has apparently caved on his prior resistance to any tax hikes during economic downturns. In its recent report on the bill, the Joint Committee on Taxation determined that Americans bringing home under $200,000 per year would see their tax rate increase to pay for the proposed spending.
If the "Inflation Reduction Act" is "not a Democrat bill or a Republican bill," as @Sen_JoeManchin continues to claim, why do 0 Republicans support it?
And why did Manchin negotiate it in secret with Chuck Schumer? pic.twitter.com/tEX40KYOIM
— John Cooper (@thejcoop) August 2, 2022
As for Democratic Party claims that the spending package would reduce inflation, the Penn Wharton Budget Model recently released the results of a study that found it would actually cause consumer prices to rise – at least over the next two years. In the long run, researchers determined that there is “low confidence that the legislation will have any impact on inflation.”
For that reason, GOP lawmakers are speaking out against the proposal. For his part, Senate Minority Leader Mitch McConnell (R-KY) called it a “reckless taxing and spending spree that will delight the far left and hammer working families even harder.”