Manchin says no to Build Back Better, killing EV tax credit momentum

Sen. Joe Manchin said Sunday he won't support the $2 trillion tax-and-spending plan that's the heart of President Joe Biden's economic agenda — which includes a controversial provision that would give consumers an extra incentive to buy union-made electric vehicles — effectively killing Democrats' plans to pass the legislation as they begin an election year.

"I can't get there," Manchin said on "Fox News Sunday."

The White House and Democratic congressional leaders were informed earlier Sunday that the West Virginia Democrat was a firm no on the legislation, according to a person familiar with the matter.

His decision caught White House officials by surprise after he had given Biden just days ago an outline of a $1.8 trillion plan he could support, according to another person, who spoke on condition of anonymity.

Manchin was a crucial vote for the package in the 50-50 Senate, and getting his support was one of the last remaining hurdles for the party in negotiations over a bill that Democrats aimed to make a centerpiece of their campaigns in the 2022 midterm congressional elections.

Manchin said that his concerns about rising inflation and the $29 trillion national debt led to his decision. He said that the House bill is not honest because it creates many benefits that expire rather than creating a few for 10 years that are fully paid for.

"If I can't go home and explain it to the people of West Virginia, I can't vote for it. And I cannot vote to continue with this piece of legislation. I just can't," Manchin said on "Fox News Sunday."

"This is a no on this legislation," he said.

Republicans wooed Manchin with arguments first that the package was too big, and later, after Democrats slashed its topline to appease Manchin, that it was filled with budget gimmicks — like shortening the effective timelines for programs such as the expanded child tax credit — to mask its size.

Last month, during a visit to Toyota Motor North America's West Virginia components plant, Manchin slammed the proposed $4,500 federal tax credit for union-made EVs.

"When I heard about this, what they were putting in the bill, I went right to the sponsor [Sen. Debbie Stabenow, D-Mich.] and I said, 'This is wrong. This can't happen. It's not who we are as a country. It's not how we built this country, and the product should speak for itself," Manchin told Automotive News at the time. "We shouldn't use everyone's tax dollars to pick winners and losers. If you're a capitalist economy that we are in society then you let the product speak for itself, and hopefully, we'll get that, that'll be corrected."

Toyota has led efforts to kill the union-built EV credit alongside other international manufacturers, including American Honda and Volkswagen Group of America. Republican governors from auto states, and the countries of Canada and Mexico have also criticized the proposal.

A CBO score earlier this month ordered up by the GOP showed the size of the package would be closer to $5 trillion if all of the programs ran for a decade. The White House and Democratic leaders disputed the validity of the analysis and said they would offset any additional costs

In a statement Sunday, Lindsey Graham of South Carolina, the top Republican on the Budget Committee, said that CBO report "confirmed Senator Manchin's worst fears about Build Back Better."

In recent days, Manchin made clear to his colleagues that if the expanded child tax credit were to be continued it would have to be for 10 years, a cost of $1.4 trillion which would leave little room for other priorities under the $1.75 trillion top line Manchin has previously endorsed.

"They said, 'Well, can we still make this fit? We'll just cut it down to two years versus 10 years. We'll cut this one down to four years versus 10 years, or one year versus 10 years,'" Manchin said Sunday of his fellow Democrats. "That's not being genuine, as far as I'm concerned, with my constituents in West Virginia."

The challenge for the White House and Majority Leader Chuck Schumer will be determining whether Manchin's announcement is a hard-nosed negotiating tactic to make deep changes to the bill or is truly the end of the line.

Senate Budget Chairman Bernie Sanders said on CNN "State of the Union" that Democrats should put the bill on the floor in January and dare Manchin to vote against it.

"If he doesn't have the courage to do the right thing for the working families of America and West Virginia, let him vote no in front of the whole world," Sanders said.

Representatives of Schumer didn't immediately respond to a request for comment.

The roughly $2 trillion plan would have extended the expiring child tax credit and enacted new child care subsidies, the largest climate package ever, and money for assorted other programs for the middle class and the poor paid for with higher taxes on people making more than $400,000 a year and corporations.

Manchin's decision leaves in limbo many other items, including a push by Democrats in high-tax states like New York and New Jersey to restore the state and local tax deduction, or SALT.

Other items that have little to no chance of passing without Manchin climbing back on board include Medicare negotiating some drug prices, a paid family leave benefit, tax credits for EVs and a transition to cleaner energy.

If the White House can't regroup and cobble together a radically reworked and smaller bill to win Manchin's support — and keep other Democratic constituencies from scuttling the bill in kind — none of that will happen.

Manchin's decision drew sharp responses from some other Democrats.

"After months of negotiations, one Democratic U.S. senator has now summarily walked away from productive negotiations," Virginia Representative Abigail Spanberger, a moderate representing a swing district, said in a statement. "That is unacceptable, and we cannot act like this moment is the end."

Many of Biden's other legislative agenda items, including voting rights, have little chance of success in a Senate that continues to have a 60-vote rule for most legislation and near-uniform GOP opposition.

Manchin's opposition is also a victory for the Chamber of Commerce, which sought to kill the bill and its taxes on corporations, as well as Republicans who united against the plan's spending and taxing.