Manchin says inflation report killed climate and tax talks with Schumer

Sen. Joe Manchin (D-W.Va.) said Friday that he told Senate Majority Leader Charles Schumer (D-N.Y.) this week that a report showing inflation jumping 9.1 percent in June compared to a year ago blew up the chances of him supporting a bill with climate provisions and tax reform anytime soon.

Manchin told West Virginia broadcaster Hoppy Kercheval in an interview Friday morning that talks had been going well until the eye-popping inflation report came out Wednesday.

He said that made it impossible for him to vote for a budget bill that would raise hundreds of billions of dollars in tax revenue to spend on clean energy tax incentives and other climate proposals.

Manchin said he informed Schumer’s staff of his position earlier this week.

“They all knew exactly where I stood when we saw 9.1 percent. That was an alarming figure to me, higher than anything in 40-plus years. I said, ‘Oh my goodness, let’s wait now. This is a whole new page,’” he said.

Manchin said he pushed back against what he saw as Schumer’s artificial timetable of trying to get a broader reconciliation bill passed before the August recess, which is scheduled to begin Aug. 6.

“The bottom line is the American people are getting short-sighted because of political timetables and the political gesturing going on,” he said.

He told Schumer that if the Democratic leader insisted on moving forward with a budget reconciliation bill before the August recess, “the one thing you know you can get done is … the bill … on reducing drug prices, letting Medicare negotiate.”

He noted that prescription drug reform would raise $288 billion over 10 years. He said $40 billion could be used to keep Affordable Care Act premiums from rising, with the rest devoted to deficit reduction.

At one point Schumer demanded: “Are you telling me you won’t do the other right now?”

“I said, ‘Chuck, it’s wrong, it’s not prudent to do the other right now,’” Manchin recalled.

Manchin said he asked Schumer to wait until the latest inflation figures came out and lawmakers have a better sense of how much further the Federal Reserve will raise interest rates.

“I said, ‘Chuck until we see the July inflation figures, until we see the July Federal Reserve rates, interest rates, then let’s wait until that comes out so we know that we were going down the path that won’t be inflammatory to add more to inflation. Inflation is absolutely killing many, many people,’” Manchin said Friday morning.

“Can’t we wait to make sure that we do nothing we add to that? And I can’t make that decision, basically, on taxes of any type and also on the energy and climate because it takes the taxes to pay for the investment in clean technology that I’m in favor of,” he added.

But Manchin said Schumer rejected his proposal to wait by making it public, prompting a slew of headlines.

“He took that as no, I guess, and came out with this big thing last night. I don’t know why they did that. I guess to try to put pressure on me, but they’ve been doing that for over a year now,” he said.

The West Virginia senator says he wants more time to weigh how closing tax loopholes will affect inflation and jobs.

He said he would solicit analysis from experts over the next month on how tax reforms may affect the U.S. economy.

“I want people to pay their fair share. I think corporations should pay their fair share, but I’ve got to be careful that corporations aren’t basically stymied to where they won’t invest, they won’t hire, they start laying off,” he said.

Manchin insisted that he wants climate and energy legislation passed but emphasized that such a proposal must also increase the production of fossil fuel.

“If we want to decarbonize, then we’re going to produce more fossil [fuel] cleaner than anyone in the world and replace the dirty fossil that is going into the atmosphere now,” he said.

He called proposals to move abruptly away from a reliance on oil, gas and coal “crazy.”

A Democrat briefed on the negotiations said Schumer wanted to include $375 billion for climate- and energy-related provisions in the package and offered Manchin several concessions.

Schumer committed that half of the revenue raised from tax reform would go toward deficit reduction and dropped a proposal to include tax credits for electric vehicles.

The Democratic leader also said he would support permitting reform and other measures to increase domestic fossil fuel production.

Despite these concessions, Manchin still refused to vote for a reconciliation bill with a sizeable tax reform and climate component before Labor Day.

The tax credits for clean energy production could have reduced carbon emissions by nearly 40 percent by 2030, according to a Democratic estimate.

Manchin’s position exasperated fellow Democratic senators Friday, with at least one colleague questioning whether he should remain as chairman of the Senate’s Energy and Natural Resources Committee (ENR).

“We have an opportunity to address the climate crisis right now. Senator Manchin’s refusal to act is infuriating. It makes me question why he’s chair of ENR,” Sen. Martin Heinrich (D-N.M.), a member of the panel, tweeted.

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