The Manchin Schumer Tax and Climate Bill Deal
The tax and climate bill recently passed by the Senate thanks to a last minute deal with Senate Majority Leader Chuck Schumer and Sen.Joe Manchin (D-WV).Sen. Joe Manchin of West Virginia has said he wants to see the ultra-wealthy pay their fair share of taxes. Democrat Sen. Kyrsten Sinema (D-AZ) has said she is reviewing the bill. Sinema, who previously backed Manchin, is reexamining it. However, her stance on the deal is uncertain. Sinema’s office referred reporters to her comments last year.The bill faces multiple hurdles before reaching Biden’s desk. The bill must pass both chambers of Congress, and any Democratic votes against it could delay its passage. However, Schumer’s office has said that the bill will cut US carbon emissions by 40 percent by 2030, with the majority of these reductions coming from tax credits for clean energy. Two weeks ago, The Hill reports “The announcement of the deal, which would raise $739 billion in new tax revenue, fund an array of new climate provisions and pay down $300 billion of the federal deficit, came as a complete surprise to their Senate colleagues.”The new bill also has a lower income threshold and a larger carbon budget. Despite these differences, Senate Democrats are happy with the $369 billion energy and climate bill. One of the key points in the deal is the inclusion of tax credits for electric vehicles. The credits will continue at current levels and will be worth up to $4,000 for used electric vehicles and $7,500 for new EVs. Manchin was opposed to such tax credits.In addition to tax cuts, the Senate will pass a permitting reform bill that will make it easier for developers to get permits to build energy infrastructure, such as pipelines and natural gas export facilities. The new bill is an expansion of the reconciliation bill, but falls short of Schumer’s Build Back Better plan, which included massive domestic spending. A look at the Joe Manchin Chuck Schumer tax and climate deal from the viewpoint of a consumer will give us a clearer picture of the deal.In addition to tax cuts, the deal also contains several major provisions to boost the economy. The bill would expand social safety net programs and ostensibly reduce the debt. It would also lower the cost of prescription drugs and electricity. The Democrats are pitching the deal as a targeted attack against the escalating costs. With Democrats facing midterm elections in November, concerns about inflation and soaring costs will likely shape voter decisions.The surprise climate and tax deal is seen as good news for climate activists (though hard to tell since many declared it didn’t go far enough).
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