The Manchin deal is (mostly) good

A much-needed win for President Biden, and a respite from Save-the-Planet hysteria.

First, let me say that Sen. Joe Manchin understands what it is to be a U.S. Senator. That position represents a state’s interest, not a party’s. A Senator is not a member of a peerage, some council of elders that’s supposed to make all the decisions for the nation. Manchin defended West Virginia, a small and weak state, from decimation by rabid environmentalists and city-dwelling climate change activists. West Virginians have rights, and don’t have to become a bedroom for Washington, D.C. surrounded by forgotten pockets of Appalachian poverty.

Photo by Anatoli Nicolae on Unsplash

The AP reported that Manchin’s basement negotiations with Sen. Majority Leader Chuck Schumer put this deal together, and it was Manchin who put his “best deal” on the table. I chuckled when I read how Schumer commented “what a beautiful office” when he stepped into his own Capitol basement digs. Apparently he’d never been there and didn’t know it was his. Our taxpayer money at work, providing luxe basement office space that our leaders practically never use.

So, about the deal. The good: EV tax credit caps have been removed and the credits have been extended to the end of 2023. This benefits Tesla buyers, because one of the provisions is the vehicles must be made in the U.S. Tesla had far exceeded the previous $7,500 credit’s cap on unit sales. The bill has a $55,000 price cap for EV cars, and $80,000 for pickups, SUVs and vans. Tesla’s Cybertruck clocks in at under $70,000. Rivian’s R1T pickup should also qualify, along with Ford’s F150 Lightning and Mach-E.

There are some arcane restrictions on battery sourcing: in 2023, 40% or more of the minerals need to come from the U.S. or a country with which we have a free trade agreement, and that increases year over year. The bill counts minerals from recycled batteries as “U.S.” sourced, which is a boon to the nascent EV battery recycling business.

The tax credits also apply to Plug-in Hybrids (PHEVs) and fuel cell vehicles. So, it’s good for the U.S. car industry as it begins to break into next-gen EV production, versus the moribund aging Bolt. Mostly, it’s good for Tesla, Rivian, Ford and GM. Not so much for ultra-luxury brand Lucid Motors, which is outside the pricing cap.

I can tell you that my decision to purchase a BEV was in no small part based on the ability to receive the $7,500 tax credit. In the Manchin deal, Kia and Hyundai’s EVs, made in Korea, wouldn’t qualify.

There are also income limits attached to the credits. If you can afford to pay cash for the vehicle, you probably don’t qualify—$300,000 per year joint filing, $225,000 head of household, or $150,000 for other taxpayers.

Other good items: part of the $370 billion allocated for alternative renewable energy goes to solar, wind and hydrogen. These are tied to the Interior Department offering at least 2 million acres of public land and 60 million acres of offshore waters in the Gulf of Mexico and Alaska for oil and gas leasing, annually. There will be no slow-walking of permits without some kind of penalty for the executive branch. Pipelines such as the Mountain Valley Pipeline would be fast-tracked, helping West Virginia.

Of course, the enviro-warriors hate this part, but again, Manchin correctly understands the role of a U.S. Senator, and he is doing what’s right for West Virginia, which can’t afford the “green penalty” for all the wonderful projects Washington lobbyists think need to be done to save the planet. Manchin’s constituents would have to pay more than their fair share of these punitive eco-dreams in their own misery.

The bad, or at least neutral and useless: a $4,000 tax credit for used EVs, as long as the price is $25,000 or less. The only used EVs selling for under $25,000 aren’t worth buying, so it’s unlikely this will work any better than Barack Obama’s “Cash for Clunkers” did.

The worst item is a $60 billion payout to “environmental justice” groups, which will use the money to shake down corporations with damaging lawsuits. The bill does give $850 million (a paltry amount) to companies for the purpose of monitoring and reducing methane emissions. There is a fee for “excess” methane emissions by oil and gas producers. But these fees and lawsuits are all part of the cost of doing business for oil and gas companies. As long as they get their leases and can ramp up production, have pipelines for delivery, and a market (which they have), they’ll be able to help us transition to a less fossil-fuel future.

The best thing Manchin did is defend his own state, and in the process, he hopefully prevented the Democrats from strangling the oil and gas industry then blaming voters for it. He also gave a much-needed win to President Biden. As gasoline prices begin to come down at the pump, perhaps inflation will begin to cool a bit. As the economy continues to shrink and adjust, the respite from Save-The-Planet hysteria is most welcome.

Though Manchin’s bill won’t help the lower-middle class, many of whom can’t afford the $50,000-plus dealer prices of new BEVs, it will help the industry, and therefore GM and Ford, and the bevy of new EV makers will be more comfortable in making the investment for the long term. It also helps greatly in the battery recycling industry, which I believe will be huge in the future.

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