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6 January 2022

300 days to get Build Back Better past Manchin

Senator Manchin has restated that he won’t support Build Back Better, the $3.5 trillion proposed spending bill which he’d already cut down to $1.75 trillion. The Senator says there are no ongoing talks with President Biden to bring him onside.

This may simply mean Senator Manchin wants the bill further cut and reshaped to suit his interests – though a Democrat, he represents the right-wing electorate of West Virginia, which also has a strong fossil fuel lobby, not to mention his own family’s coal assets. Outright refusal throws away the easy leverage he gets as the last Democrat Senator of 50 whose vote would allow Vice-President Harris to cast her tiebreaker vote and pass the bill through the Senate – the House has a slim Democrat majority.

For now the Administration has turned its attention to other legislative agendas with reports that Biden will attempt to reopen negotiations with Manchin “after a cooling-off period.” Besides inflation, Manchin attributes his oppositional stance to various climate-related measures in the legislation such as a “methane fee” which would hasten the demise of the natural gas industry.

It was the $1.2 trillion bill which was passed last year was dedicated to infrastructure, but while the unpassed $1.75 trillion bill is primarily about social spending, its second biggest component is $555 billion for the energy transition. It is a diminished form of the Green New Deal concept, though everything these days appears to be called a variant of “Build Back Better”.

Potentially, the $555 billion segment could be separated from the rest of the bill – Democrats may decide they can only persuade Manchin to accept part of the bill. Then there are the limitations of budget reconciliation, which is the method used to dodge the filibuster. Lastly if the climate spending can’t be passed via budget reconciliation, then the Democrats will have to try inserting it into annual spending bills to expand the work done by government agencies.

Most likely however, we will see a smaller bill of around $1 trillion being proffered to Manchin in a week or to. If it is voted on very soon, then the Democrat Party’s leaders have given up on passing it and have simply decided to put it on record who voted for and against, perhaps aiming to weaken Manchin in a future primary contest.

A lessened form of the bill, which is the most likely outcome, would have anywhere from $200 billion to $555 billion remaining assigned to renewables. As just one example of what remains to be spent on, the bipartisan infrastructure bill passed last year assigned funds to EV infrastructure, but it is this still-unpassed budget reconciliation which would provide the $12,500 subsidy per EV sale. Naturally, one subsidy without the other is a bit useless.

If current polling persists the Republicans will come out of the November 2022 midterm elections with 53 Senate seats out of 100, and in 2024 they may gain even more due to which seats are up for election at that time. So we are in the last 300 days in which a Democrat agenda can be put through the Senate, after which it is gone for another four years, and the House can also be expected to fall in 2022.

At that point the Biden Administration is left with just the presidency and regulators – not enough to get the US back up to speed with the rest of the West’s energy transition, but still a lot of executive orders to sign and appointments to make – which might be useful for approving utility-scale projects, especially offshore, which might otherwise be denied permission. Requiring the federal government itself to switch all its buildings and vehicles to clean energy is simple and obvious, but no smaller for it.

It is even possible that the Biden Administration could persist beyond 2024 without winning back the House or Senate from a 2022 defeat, if Trump runs again, and once again elicits harsh institutional opposition as in 2020: the Democrats’ current policy priority besides spending is voting rights. One way or another, we are in for two, maybe even four or six years of only the Presidency, regulators, private sector and specific states pushing the energy transition in America.

One example of what can be done without the House and Senate is recent moves by the federal Bureau of Land Management to make its lands available for solar projects, in the largest such move since 2012. Since last last year, auctions to develop solar plants in Arizona have been proceeding, with the Arica and Victory Pass projects approved there last week, accounting for 465 MW solar and 400 MW battery capacity. The Bureau’s Director, Tracy Stone-Manning, referenced the Energy Act of 2020 when discussing the approvals: that Act enjoins development of 25 GW solar, wind and geothermal on public land by 2025 – so it could make up as much around 15% of total development through that period.