Manchin, Schumer Reach Surprise Deal on Energy, Taxes

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Sen. Joe Manchin said Wednesday he has a deal with party leaders on a spending package that includes funding for energy and climate programs, reining in healthcare costs and tax increases, in a dramatic reversal of events.

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Manchin, a centrist who represents the coal state of West Virginia, had been a holdout among Democrats on a laundry list of social, climate and other policies promoted by President Joe Biden and stymied on Capitol Hill because of a lack of agreement.

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On Wednesday Manchin and Majority Leader Sen. Chuck Schumer of New York announced an agreement on a reconciliation bill that would invest $370 billion in clean energy and climate change programs, expand health insurance subsidies and reform prescription drug pricing.

It would be paid by closing tax loopholes on big companies and wealthy individuals and aims to cut deficits by $300 billion over a decade.

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The two said the Senate would consider the bill next week. It comes the same day the chamber approved a more than $280 billion package for technology, including $52 billion in subsidies to build the American chip industry.

Biden said in a statement late Wednesday that he spoke with Manchin and Schumer and offered his support for the agreement.

“This is the action the American people have been waiting for,” he said. “This addresses the problems of today—high healthcare costs and overall inflation—as well as investments in our energy security for the future.”

Manchin for months has said he opposed Biden’s social and climate proposals because he didn’t want to exacerbate inflation, which has been running at 40-year highs. But that seems to have all changed on Wednesday, as lawmakers prepared to leave Washington for their August recess.

Manchin took a swipe at Biden’s Build Back Better agenda in the process, however.

“For too long, the reconciliation debate in Washington has been defined by how it can help advance Democrats’ political agenda called Build Back Better,” he said in a statement.

“Build Back Better is dead, and instead we have the opportunity to make our country stronger by bringing Americans together.”

Manchin added in the statement, “Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescriptions drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination.”

Manchin is calling it the Inflation Reduction Act of 2022 and says it adopts a tax policy that “protects small businesses and working-class Americans while ensuring that large corporations and the ultra-wealthy pay their fair share in taxes.”

He backs a proposal that billion-dollar or larger US companies pay a minimum tax of 15% but doesn’t favor restoring the deduction for state and local taxes, saying the tax code should focus on closing other loopholes.

The proposal also calls for investments in all fuel types, including hydrogen, nuclear, renewables, fossil fuels, and energy storage, so as not to “arbitrarily shut off our abundant fossil fuels,” Manchin said.

Write to Liz Moyer at [email protected]

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Credit: www.marketwatch.com /

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