The new reconciliation deal Sen. Joe Manchin III (D-W.Va.) announced Wednesday anticipates its critics: What was once Build Back Better is now dubbed the Inflation Reduction Act — less catchy, perhaps, but savvy. The name is fitting for a proposal that largely meets the moment.
counterpointThe Manchin deal should fail. But Republicans can learn something from it.
The tax provisions in the deal are sound on a policy level and smart on a political one. A 15 percent minimum levy on big corporations, the closure at long last of the carried interest loophole and funding for the Internal Revenue Service to bolster enforcement are changes that, put together, should ensure that the wealthy pay a fairer share of taxes. The refusal to lift the cap on state and local tax deductions, in what would have amounted to a massive giveaway to the affluent, is also a major improvement from the earlier BBB. Could Democrats have hoped for broader-based tax hikes, such as raising the top bracket or capital gains rates? Of course. But what they’re getting is a significant improvement on the status quo, and allows for an easier rebuttal to misleading claims from Republicans that the proposal will worsen inflation.
The bill’s energy and climate spending provisions are further from perfect. But compared with what Democrats previously believed they’d achieve — nothing — they are welcome. The tax credits for clean energy at the legislation’s heart are a respectable route to boosting U.S. manufacturing of solar panels, wind turbines, batteries and more. Tax credits for the purchasing of electric vehicles are less efficient, and support for fossil fuels seems likelier to help Mr. Manchin’s coal-rich home state than a rapidly warming world. Nonetheless, the bill’s drafters estimate the legislation will result in a 40 percent decline in greenhouse gas emissions by 2030. That might be overconfident, but plenty of climate advocates say the proposal keeps the country in the fight against global warming. Democrats can help more by pursuing permitting reform in the coming months, as they’ve promised, to ease regulatory obstacles impeding important projects.
There are a few things to mourn in this victory. The loss of the child tax credit means giving up what could have been the most important anti-poverty measure in a generation. Similarly, the refusal to close the Medicaid coverage gap will leave the country’s worst-off citizens stranded without health care, unless Congress somehow finds a way to take this matter back up. These are more than quibbles. They are serious opportunities missed and serious harms unmitigated. Yet, to rebuff all that finally is on offer would also be missing a huge opportunity to — yes — build America back better. This week’s deal deserves celebration, and a winning vote.