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Opinion A big looming victory for Biden could put Trumpists on the defensive

J.D. Vance, Republican candidate for Senate in Ohio. (Drew Angerer/Getty Images)
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Now that Sen. Kyrsten Sinema appears supportive of the climate and health care bill that Democrats have unveiled, this fact mustn’t get lost: Democrats are set to unilaterally launch the country’s biggest effort yet to combat our planetary climate emergency — without the participation of a single Republican.

The Arizona Democrat announced late Thursday that she’s prepared to “move forward” after securing a deal changing some of the bill’s tax provisions. Democrats are dropping a tweak to a tax on investors and substituting a tax on corporate stock buybacks.

Though we’re still awaiting the Senate parliamentarian’s verdict — which is needed pass the bill with only Democrats via the reconciliation budget process — this is a breakthrough. All 50 Senate Democrats are close to uniting behind legislation, fully endorsed by President Biden, that would direct hundreds of billions of dollars toward spurring our transition to a cleaner energy future, while Republicans sit the whole thing out.

The deal contains $369 billion to combat climate change. That includes tens of billions for incentivizing the production, manufacture and consumption of renewable energy sources and their technologies. Studies say this will help reduce emissions to 40 percent below 2005 levels by the year 2030.

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At its core, the bill constitutes industrial policy that would invest in the creation of clean-energy manufacturing jobs, including in former coal communities. As I’ve argued, this would allow Democrats to shift the debate: Rebuilding jobs in the industrial and Appalachian heartlands requires accepting realities of global warming and technological change — and harnessing them to our advantage — rather than remaining mired in backward-looking nostalgic fantasies.

The opening to shift that paradigm may have actually grown.

So far, Republicans have struggled to attack the bill’s tax provisions. They include funding to bolster IRS enforcement toward high-income tax manipulators, and a minimum tax on huge corporations that currently game down their tax rate. (Sinema wants to tweak the latter.)

As Paul Krugman notes, the usual GOP attacks look particularly absurd: The result of targeting such provisions is to “defend the interests of tax evaders and avoiders,” many of whom are extraordinarily wealthy.

The buyback tax in the package makes those attacks even sillier. The provision would reportedly place a 1 percent tax on stock buybacks, in which corporations repurchase stocks to enrich shareholders.

As a Roosevelt Institute analysis shows, stock buybacks are a symptom of financial rules that have been shaped to fuel “extractive” elite fortunes at the expense of socially productive investments. A tax on buybacks could encourage corporations to redirect funds currently used to enrich wealthy shareholders and invest them in job creation, development, and research.

It’s notable that the few Republicans who have tried to nudge the GOP in a more economically populist direction have supported a stock buyback tax.

Sen. Marco Rubio of Florida, for instance, has backed the idea, expressly because it would remove incentives prompting corporations to decide that “returning capital to shareholders is better for business than investing in their products or workers.”

What’s more, Steven Rosenthal, a senior fellow at the Tax Policy Center, points out that stock buybacks often benefit foreign investors who own U.S. stocks without ever paying U.S. taxes on them.

And so, says Rosenthal, taxing buybacks would also “encourage corporations to invest in America rather than buy back stocks from foreign owners tax-free.”

Will “America First” Republicans really attack that?

All this gives Democrats an opening to seize the populist mantle from the Trumpist wannabe types. And here’s a tell: Rep. Tim Ryan, the Democrat challenging self-proclaimed populist J.D. Vance for a U.S. Senate seat in Ohio, supports the bill expressly because it would create good jobs.

The bill will “set us on the path to dominate the clean energy industry by creating millions of good-paying jobs here at home,” Ryan told me in a statement, calling it “a major win for working people in Ohio.”

Vance recently tweeted:

Putting aside the ravings about China and Democratic donors — which are typical of Vance’s debased politics — note that he wants voters to see the clean energy transition as something that can only sap our national vitality in the struggle against China, as something fundamentally in conflict with the creation of manly industrial work.

This is the paradigm Democrats can shift. University of Massachusetts professor Robert Pollin, who has modeled the bill’s economic impact, says it could have just that impact.

“There’s no question that the job creation generated by clean energy investments is going to be far in excess of job losses resulting from the phaseout of fossil fuels,” Pollin told me. “Current energy-intensive regions of the country should, in my view, receive a disproportionate amount of those investment funds.”

This is a big moment. But it’s also sobering that the most our system can bear is a package that only nudges us in a greener direction without placing serious constraints on the fossil fuel industry’s future activity, even if it would accomplish much.

Indeed, as economics writer Zach Carter argues, in some ways the greater transformative potential that the pandemic and rising authoritarianism had created — an opening to revitalize democracy by showing it can deliver for working people amid crises — has dissipated amid a lost year of congressional infighting.

But if this bill passes, Democrats will have an opportunity to show democracy can work, by reorienting our national trajectory away from climate catastrophe while helping revitalize areas that are easy prey for Vance-like populist demagogues. They should seize it.

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