Senator Joe Manchin who has been opposing the Democrats' plans to pass legislation cementing hundreds of billions in climate change spending this week, sealed a deal with Majority Leader Chuck Schumer on a bill involving $370 billion in climate spending.
Called the Inflation Reduction Act of 2022, the bill features $369 billion earmarked for energy and climate-related programs, per a CNBC report, and another $64 billion in healthcare spending through the extension of the Affordable Care Act for another three years.
The bill also envisages raising $739 billion through a combination of higher corporate taxes, prescription drug pricing reforms, and tax code reforms, among others.
"In any other environment [than] what we have right now, this would be a bipartisan bill. I really believe that. This is the only vehicle I have to work with right now," Senator Manchin said, as quoted by Politico. "We don't know what the future will bring. But all indications, might be a little bit of a shake-up. And that changes the dynamics of getting something done."
In the climate spending department, Manchin said the bill involved incentives for the production of EV batteries—and not only production but also every stage of the supply chain, from mining the minerals to assembling the batteries, according to the Politico report.
Also, the Inflation Reduction Act of 2022 includes a stipulation for a $4,000 tax credit for purchasing a second-hand electric vehicle.
Manchin, however, managed to win some backing for fossil fuels. Among the other energy-related stipulations in the Manchin-Schumer bill are efforts to lower the emissions footprint of fossil fuels and boosting oil and gas production in the U.S. to supply Europe.
"By a wide margin, this legislation will be the greatest pro-climate legislation that has ever been passed by Congress," Majority Leader Schumer said, as quoted by the BBC.
"I can't believe that Senator Manchin is agreeing to a massive tax increase in the name of climate change when our economy is in a recession," said Senator Lindsay Graham in comments on the new bill.
Other critics of the bill have pointed out that it locks in fossil fuel use by streamlining the permitting process for natural gas pipelines, along with subsidies for “dirty” hydrogen and carbon capture.
By Charles Kennedy for Oilprice.com
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