OPINION:
In the wake of House Speaker Kevin McCarthy’s opening offer on increasing the debt ceiling, Senate Majority Leader Charles E. Schumer, always known for his reserved qualities, said: “This MAGA wish list has no chance of moving forward in the Senate, and it doesn’t move us any closer to where we were yesterday to avoiding default.”
At approximately the same moment, the actual center of gravity in the Senate — West Virginia Democrat Joe Manchin III — said in a statement: “I applaud Speaker McCarthy for putting forward a proposal that would prevent default and rein in federal spending. While I do not agree with everything proposed, the fact of the matter is that it is the only bill actually moving through Congress that would prevent default.”
With respect to President Biden, Mr. Manchin said simply that the commander in chief’s unwillingness to negotiate with Mr. McCarthy “signals a deficiency of leadership, and it must change.”
As for Mr. McCarthy, he let his work do most of the talking. The legislation he has proposed is, without a doubt, the most substantial and energetic legislation put forward by the Republicans, at least in the last 100 years or so. It puts a short string on the ceiling, increasing it by “only” $1.5 trillion or until early 2024, whichever comes first.
More importantly, it resets discretionary spending to fiscal 2022 levels — a $130 billion reset that, when coupled with a 1% cap on annual increases, would reduce projected federal spending by $4.5 trillion over the next 10 years.
The legislation also terminates many of the tax credits created or extended in the Inflation Reduction Act. It does its best to retrieve unspent money from the spending orgy that was the federal government during and after COVID-19.
Not surprisingly, the president instantly and substantively attacked it as “more MAGA nonsense.”
That’s probably not a bad pitch, and it may have been enough before Mr. Biden’s own Department of the Treasury declared jihad last year on provisions in the IRA — specifically inserted by Mr. Manchin — to place income limits, price thresholds and domestic content requirements on the energy tax credits created or expanded therein.
In the last few months, Treasury has created a workaround for income limits for electric vehicle tax credits (via a loophole that excludes leased vehicles), redefined what a “free trade agreement” might mean to skirt domestic content, and, most recently, previewed an effort to change the plain meaning of the word “battery” to get around a constraint on Chinese manufacturing.
It should come as no surprise that at each step of the process, Mr. Manchin has complained that the administration is gutting provisions he negotiated with the administration itself.
It has not helped that in recent weeks it has become clear that companies controlled by China have figured out ways to access American taxpayers’ cash through the IRA. The same day that Mr. Biden was tut-tutting Mr. McCarthy’s legislation, the House Ways and Means Committee held a hearing where everyone learned all about how Contemporary Amperex Technology Co. Ltd., or CATL — a company more or less controlled by the Chinese Communist Party — would receive cash from Michiganders as well as tax credits (via the IRA) from the rest of us as part of a joint venture with the fellow travelers at Ford Motor Co.
It also certainly did not help that at about the same time, the ambassador from South Korea bragged about arranging the rules so that Korean electric vehicles could qualify for the tax credits, irrespective of the fact that they are not actually built in the United States.
How does this legislative story turn out? Perhaps like most of these stories — with some craven capitulation, usually by the conservatives. Maybe not this time, though. Mr. Manchin seems prepared to completely undermine what he helped create in the Inflation Reduction Act.
The thing about the world in general and small company towns (like Washington) in particular is that eventually, everyone wanders back into the line of sight of someone they have offended. When that happens, payback is usually swift and painful, especially when the aggrieved party believes he was lied to and has leverage (like now).
In its haste to humiliate and marginalize Mr. Manchin over what it thought were unnecessarily restrictive provisions in the legislation, the Biden administration might have played itself into a disaster.
Congratulations.
• Michael McKenna, a columnist for The Washington Times, co-hosts “The Unregulated Podcast.” He was most recently a deputy assistant to the president and deputy director of the Office of Legislative Affairs at the White House.
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