An Update on Anti-West Virginia Scheming in the Schumer-Manchin Reconciliation Bill

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Last Friday I discussed two provisions in the misnamed Inflation Reduction Act (IRA) that seemingly aim to rebut the Supreme Court’s recent landmark decision in West Virginia v. Environmental Protection Agency. The Senate held a “marathon” Vote-a-Rama session last weekend and on Sunday passed its final version of the bill by 51 to 50 along party lines. The IRA reboots President Biden’s “Build Back Better” agenda of “green energy” subsidies, new taxes, and more federal healthcare spending. The House is expected to vote on the IRA this Friday. If the bill passes in the House, it then goes to the President for his signature.

Like the earlier 725-page draft, the final 730-page Senate-passed version would:

  • Impose hundreds of billions of dollars in new and higher taxes (link).
  • Destroy an estimated 900,000 jobs (link).
  • Increase household energy costs (link).
  • Decrease real GDP per capita by 1-2 percent (link).
  • Transfer hundreds of billions of dollars from Red State taxpayers to Blue State “green energy” interests (link).  
  • Depress pharmaceutical industry investment in research and development of life-saving new drugs (link).
  • Provide no detectable reduction in global warming or any associated climate change impacts (link and link).

The IRA would also give the IRS $80 billion to hire 87,000 new employees, with $45.6 billion dedicated to “enforcement.” The bill’s supporters assure us a bigger more muscular IRS would never squeeze small businesses, middle-income households, or political adversaries. 

Nonsense. Middle-income brackets are where most of the taxable income is, and if audited, small businesses and middle-income households “will settle with the IRS rather than endure years of costly litigation,” the Wall Street Journal warns. Tellingly, the IRA provides no funds to strengthen taxpayer protections or safeguards against IRS abuses of power. 

Sen. Joe Manchin (D-WVA), who spent eight months killing Build Back Better only to rescue it before the August recess, played Republicans for suckers. And some may have wanted to be played, as The Wall Street Journal columnist Kimberly Strassel suggests.

In addition to Build Back Better, Democrats sought to pass the CHIPS and Science Act, a $280 corporate welfare and industrial policy program for the U.S. semiconductor industry. Democrats needed Republican votes to clear the 60-vote threshold for CHIPS. They only needed a simple majority to pass the IRA as a reconciliation bill. IRA’s reconciliation authority is time-limited and runs out on September 30. Thus, Strassel explains, to foil Build Back Better, “All Republicans had to do was refuse to touch a semiconductor bill until the reconciliation vehicle expired on Sept. 30. Or better yet, walk away from the bloated industrial policy altogether.”

Alas, 17 Senate Republicans could not resist the urge to spend big and fast. On July 27, they voted for CHIPS, which passed 64 to 33, perhaps believing Manchin had killed Build Back Better, and that CHIPs would be the last spending gusher of the 117th Congress. Instead, as Strassel reports, “Mere hours after that vote, Mr. Manchin announced he’d agreed to a $740 billion reconciliation deal after all. Surprise!”

Things could have turned out worse. Sens. Shelley Capito (R-WVA) and Ted Cruz (R-TX) called out legislative text in the draft IRA that seemed calculated to undermine West Virginia v. EPA. The offending language was deleted before final passage.

Read the full article at Real Clear Energy.