Congressional Update: EV Tax Credits; Build Back Better; Gasoline Prices; Schedule
Last week, Congress returned to a busy agenda after a two-week recess. The House and Senate have largely opened up in-person meetings and many trade associations and interest groups are now holding in-person fly-ins.
EV Tax Credits
During a hearing with Transportation Secretary Pete Buttigieg, Senator Manchin criticized the idea of more electric vehicle tax credits, calling them “ludicrous” and arguing they deepen U.S. reliance on Chinese minerals.
Build Back Better Lite
This comment appears to complicate informal discussions of negotiating a mini version of the stalled Build Back Better Act (BBB).
Senator Joe Manchin (D-WV) killed the previous multi-trillion iteration that focused on climate change, healthcare, and tax reform.
While Senator Manchin has previously expressed openness to a smaller BBB that raises taxes and pays for energy tax credits, he recently said that any BBB-style package should be focused on modernizing the U.S. tax code and fighting inflation.
This means raising individual, corporate, and capital gains taxes.
At the same time, Senator Manchin has convened a bipartisan group of senators to discuss energy tax credit legislation.
This would likely include tax credits for renewable energy industries but structured in a way that traditional forms of energy would not be harmed.
Senator Manchin has reiterated that he favors “innovation not elimination.” It is not clear whether this proposal has legs, but other Democrats have emphasized that this is not in lieu of BBB.
It is important to note that none of these discussions are formal. The White House and Senator Manchin are not negotiating anything yet, and it remains unclear as to what Senator Manchin and fellow moderate Senator Kyrsten Sinema (D-AZ) would actually support.
To address high gas prices, the Senate is expected to vote on legislation that would strengthen the Federal Trade Commission (FTC)’s ability to target alleged price manipulation.
This bill is unlikely to move, however, due to opposition from EMA and many Senate Republicans.
Other discussed ideas – such as a national gas tax holiday – are also unlikely to move due to opposition from Speaker Nancy Pelosi (D-CA), many other Democrats, and many Republicans.
Next week, the House and Senate will begin formally conferencing the “China legislation.” This refers to different House- and Senate-passed bills to spur American innovation and competition with China.
This is important from a timing standpoint, as negotiations could take up much of the summer.
The uncertainty over Senator Manchin’s position on BBB meets a Congressional calendar that is not conducive to many big initiatives.
Congress has about ten more weeks in session before the August recess, after which the focus will turn to the midterms.
For Democrats, focus will probably narrow to two key priorities – finishing the “China legislation,” and getting something on the domestic/climate change/tax policy front.
Even these two priorities will compete with two must-pass pieces of annual legislation that begin in the summer: beginning the government funding process for FY23 and beginning the defense policy bill process for FY23.
All signs point to a long summer.