Editor’s note: This is the first of two parts.
The surprise passage of the Inflation Reduction Act (IRA) last week is a significant achievement for the Biden Administration. The IRA began as a $6 trillion wish list proposed by progressives (such as Bernie Sanders) that was pared down to the President Biden’s $3.5 trillion Build Back Better (BBB) program, and was supported by every Democratic senator except Joe Manchin (D-W.Va) and Kyrsten Sinema (D-Ariz.). Trying to get the approval of Manchin proved to be elusive, because as soon as a deal was within reach, Manchin seemed to move the goal posts. Some Democrats accused Manchin of not bargaining in good faith, and being willing to sabotage the Democratic agenda. Manchin, a Democrat elected in a state that went for Trump by 39 points, saw his approval rating in West Virginia improve as he continued to frustrate the Democrats, which supported that narrative.
The last straw for the Democrats seemed to come earlier this month, when Manchin claimed he could not support the version of BBB that had been tailored to meet his demands because he was now worried about inflation, even though the Congressional Budget Office had scored BBB as only marginally adding to the deficit (and if the Treasury estimates on the revenue generated by increased funding to the IRS are used, it actually reduces the deficit), which is what Manchin believed to be driving inflation.
Mitch McConnell, who had been holding up the passage of the CHIPS bill in order to use it as leverage against the Democrats if they introduced BBB, decided that BBB was dead. He allowed the CHIPS bill, which was designed to encourage the manufacturing of computer chips in the U.S. in order to avoid supply chain issues and to keep the U.S. from being completely reliant on Asia (primarily China and Taiwan) for microchips, to come to the floor, where it passed with bipartisan support.
Within hours of its passage, Chuck Schumer and Joe Manchin introduced the IRA. McConnell, who is generally considered the master of controlling the legislative process, had been outmaneuvered. Manchin had been convinced that the bill would help ease inflation because it reduced the deficit (thus the name). While the focus of its passage had been on Manchin, Sinema had still not approved. Sinema demanded that the carried interest deduction, a tax break for hedge fund managers (the wealthiest people in America), not be eliminated. But she did allow it to be replaced by a 1% tax on corporate stock buy-backs, and gave her approval.
The IRA did not include things such as student loan forgiveness and universal pre-k that progressives had wanted. Per Manchin, it had also eliminated efforts to discourage fossil fuel production. But significantly, it did include almost $400 billion for helping transition to a green economy, which includes 10-year tax credits (rather than 2- or 3-year programs), which will allow prospective investors in green energy to see enough stability to invest. Investing in green energy is vital, because time and again we have demonstrated that when we focus on getting something done, we can make it happen. But for the last decade we’ve been allowing things to get worse instead of better. This is a meaningful move in the right direction.
Politically, this is a significant win for the Democrats. Many new Democratic voters, especially young voters who care deeply about climate change, had become frustrated, which is one of the reasons for Biden’s poor approval rating. While the Democrats controlled the Senate, the House and the presidency, they seemed unable to enact the agenda they had run on, which created a lot of “Democrats in Disarray” headlines. Passing the largest climate change bill in history should energize these young voters for the mid-terms, which is crucial if the Biden Administration is to do anything constructive in the last two years of his term.
Historically, the president’s party loses seats in the House in the midterms, which makes some sense, given that the election of a president is usually the peak of the movement that got the president elected. Given Biden’s poor polling, most analysts have predicted that Republicans will retake the House (and possibly the Senate). The recent successes of the Biden Administration (gun control, killing Al Qaeda’s leader Ayman al-Zawahiri) as well as continued good news on the economy (528K jobs in July, unemployment down to 3.5%), a steep decline in the price of gas, as well and signs that inflation generally may be beginning to ease, suggests that the dire predictions might be premature.
The other factor going in the Democrats’ favor is the Supreme Court’s overturning Roe v. Wade. This has energized a lot of people who may not have been paying much attention to politics, but the Right to Life movement’s success in overturning Roe got their attention. Since mid-term elections tend to have low turnout, energizing marginal voters will have a bigger impact in the midterms than it would in a presidential election. Additionally, the Republicans are running some weak candidates (Herschel Walker, Mehmet Oz, J.D. Vance), so the Democrats have a shot at increasing their control of the Senate, which would mean they could pass legislation without having to tailor it to the needs of the Manchin and Sinema. After a difficult year, the Democrats finally a reason for hope in November.
Kent James has a doctorate in History and Policy from Carnegie Mellon University and is an adjunct in the History Department at Washington & Jefferson College.
