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<!--
{
  "post_id": "64804246.chartbook-138-build-back-better-dead",
  "post_date": "2022-07-20T16:00:42.348Z",
  "is_published": true,
  "email_sent_at": "2022-07-20T16:00:42.579Z",
  "inbox_sent_at": "2022-07-20T16:00:42.579Z",
  "type": "newsletter",
  "audience": "everyone",
  "title": "Chartbook #138: Build Back Better, Dead Again ",
  "subtitle": ""
}
-->
<p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://adamtooze.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p><strong>On Thursday last week, the Build Back Better package that was to define the first term of the Biden presidency with a combination of climate funding, health care measures and progressive taxation, was declared dead, for the second time. The last rites had </strong>first been pronounced in December last year. It was then revived. Now it seems to have a stake planted squarely in its heart. </p><p>As reported by the <em><a href="https://www.nytimes.com/2022/07/15/climate/manchin-climate-change-democrats.html">NYT</a></em>, the mood in Washington was desperate: </p><blockquote><p>Privately, Senate Democratic staff members seethed and sobbed on Thursday night, after more than a year of working nights and weekends to scale back, water down, trim and tailor the climate legislation … only to have it rejected inches from the finish line. “Rage keeps me from tears,” Senator Edward J. Markey, Democrat of Massachusetts and a longtime advocate for climate legislation, wrote on Twitter late Thursday.</p></blockquote><p><strong>As David </strong>Dayan put it in the <em><a href="https://prospect.org/blogs-and-newsletters/tap/may-build-back-better-never-be-spoken-of-again/">American Prospect</a></em>: </p><blockquote><p>What was once a transformative, multitrillion-dollar agenda to face numerous long-standing crises in domestic policy has narrowed to an exceptionally narrow drug price reform, the main part of which—price negotiation in Medicare—doesn’t kick in until 2026, two years after the next presidential election, and a two-year extension on ACA subsidies that were set to expire at the end of the year. Eighteen months of fruitless negotiation has come down to that. </p></blockquote><p>The health part may still pass. There is some talk that climate bits might be brought back in the autumn. But no one really believes that. In November the betting is that the Democrats will lose control of Congress, which means that for progressive politics a historic window of opportunity has slammed shut. The US is now unlikely to meet the ambitious emissions targets - a 50-52 percent cut in CO2 emissions relative to 2005 - that the Biden administration announced to the world in the spring of 2021. </p><p>As Jonathan Chait put it in <em><a href="https://nymag.com/intelligencer/2022/07/joe-manchin-didnt-kill-biden-democrats-agenda-alone.html">New York Magazine’s Intelligencer</a></em>:</p><blockquote><p>Joe Biden once dreamed of an <a href="https://nymag.com/intelligencer/2020/05/joe-biden-presidential-plans.html">FDR-size</a> domestic-reform agenda. But the <a href="https://www.washingtonpost.com/us-policy/2022/07/14/manchin-climate-tax-bbb/">collapse of negotiations in Congress</a> … will ensure he achieves nothing of the sort — not Roosevelt-size, not Obama-size, nor even Clinton-size. (Bill Clinton managed to increase taxes on the rich, expand the Earned Income Tax Credit, and create a health-care benefit for poor children.) In addition to losing its chance to address any domestic social need in an enduring way, the administration is also having imperiled its global leadership on climate change and a global corporate minimum tax, two measures that hinged on Biden getting his own country’s house in order.</p></blockquote><p>The death of Build Back Better is yet another failure of the American political class to respond to the multiple global crises of our current moment - climate, pandemic, immigration, financial instability, global inequality and economic risk - that I’ve been calling the polycrisis. As the world swelters under extreme heat, Washington - in certain respects still the command center of global power - has declared that it has other, more pressing concerns to attend to, such as inflation - as though there were any meaningful trade off - or passing a gargantuan defense bill. </p><div data-component-name="Twitter2ToDOM" class="tweet" data-attrs="{&quot;url&quot;:&quot;https://twitter.com/stephensemler/status/1547702958757883904?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ&quot;,&quot;full_text&quot;:&quot;The House just passed a bill authorizing $840 billion for the Pentagon. More Republicans voted against it than Democrats. &quot;,&quot;username&quot;:&quot;stephensemler&quot;,&quot;name&quot;:&quot;Stephen Semler&quot;,&quot;date&quot;:&quot;Thu Jul 14 22:01:54 +0000 2022&quot;,&quot;photos&quot;:[{&quot;img_url&quot;:&quot;https://pbs.substack.com/media/FXqLotkUsAARqJE.jpg&quot;,&quot;link_url&quot;:&quot;https://t.co/3TRwgFXoeH&quot;,&quot;alt_text&quot;:null}],&quot;quoted_tweet&quot;:{},&quot;retweet_count&quot;:2251,&quot;like_count&quot;:10438,&quot;expanded_url&quot;:{},&quot;video_url&quot;:null,&quot;belowTheFold&quot;:true}"><a class="tweet-link-top" href="https://twitter.com/stephensemler/status/1547702958757883904?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ" target="_blank"><div class="tweet-header"><img class="tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_96/stephensemler.jpg" alt="Twitter avatar for @stephensemler" loading="lazy"><div class="tweet-header-text"><span class="tweet-author-name">Stephen Semler </span><span class="tweet-author-handle">@stephensemler</span></div></div><div class="tweet-text">The House just passed a bill authorizing $840 billion for the Pentagon. More Republicans voted against it than Democrats. </div><div class="tweet-photos-container one"><div class="tweet-photo-wrapper "><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!dr3H!,w_600,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fpbs.substack.com%2Fmedia%2FFXqLotkUsAARqJE.jpg"><img class="tweet-photo" src="https://pbs.substack.com/media/FXqLotkUsAARqJE.jpg" alt="Image" loading="lazy"></picture></div></div></a><a class="tweet-link-bottom" href="https://twitter.com/stephensemler/status/1547702958757883904?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ" target="_blank"><div class="tweet-footer"><span class="tweet-date">10:01 PM ∙ Jul 14, 2022</span><hr><div class="tweet-ufi"><span href="https://twitter.com/stephensemler/status/1547702958757883904?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ/likes" class="likes"><span class="like-count">10,438</span>Likes</span><span href="https://twitter.com/stephensemler/status/1547702958757883904?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ/retweets" class="retweets"><span class="rt-count">2,251</span>Retweets</span></div></div></a></div><p>Whilst the Pentagon arms for a confrontation with America’s enemies abroad - notably China and Russia - as John Podesta, formerly senior counselor to President Barack Obama and founder of the Center for American Progress, put it  in rather melodramatic terms: the failure of Build Back Better has “doomed humanity”. </p><p>And this Washington drama has a villain: Joe Manchin. The <a href="https://adamtooze.substack.com/p/chartbook-46-west-virginia-the-historic">Senator from West Virginia</a> is single-handedly responsible for crippling Biden’s key proposal not once, but two times over. </p><p>Throughout the tortuous process of negotiation that began in the summer of 2021, the administration and Congressional leaders worked closely with Manchin in the hope of persuading him to back some combination of Biden’s infrastructure, welfare, taxation and climate proposals. In the process, Biden’s ambitious agenda was subject to salami slicing. </p><p>First the Congressional centrists sliced off the infrastructure component, and the Democratic leadership went along. For David Dayen at the <em>American Prospect</em>.</p><blockquote><p>The defining moment might have been when Democratic leadership decided to back the <a href="https://www.npr.org/2021/11/15/1055841358/biden-signs-1t-bipartisan-infrastructure-bill-into-law">bipartisan infrastructure bill</a> and take centrists and Republicans at their word that they would vote for anything else in exchange.</p></blockquote><p>Then there was the package of $300 billion to be spent on tax credits for producers and consumers of wind and solar power and buyers of electric vehicles. As the NYT reports:</p><blockquote><p>It would be the single largest expenditure by the United States to fight climate change. (Senator) Mr. Wyden sought Mr. Manchin’s input to shape the tax package in such a way that the West Virginian would support it. Mr. Manchin obliged: He told Mr. Wyden to rewrite the package according to his specifications, so that the tax credits could also be used for nuclear energy and for carbon capture and sequestration, a nascent technology that has so far not proved commercially viable but that could theoretically allow power plants that burn coal, oil or gas to continue to operate without climate-warming emissions.</p></blockquote><p>The $300 billion subsidy package was flanked by regulatory measures </p><blockquote><p>At the same time, other Democrats were crafting an even more ambitious climate provision for the bill, known as a clean energy standard, that would have paid electric utilities to replace coal- and gas-fired power plants and penalized those that didn’t. In a private memo signed last summer with Senator Chuck Schumer of New York, the majority leader, Mr. Manchin, the chairman of the Senate energy and natural resources committee, secured control over the design of the program. But by October, Mr. Manchin had <a href="https://www.nytimes.com/2021/10/15/climate/biden-clean-energy-manchin.html">backed out of the clean energy standard</a>, saying he could not support any version. Democrats deleted the entire proposal.</p><p>Then in December, Mr. Manchin <a href="https://www.nytimes.com/2021/12/19/climate/manchin-climate-build-back-better-bill.html?searchResultPosition=4">pulled out of negotiations altogether,</a> saying he could not vote for the overall spending package. Talks were dead for months.</p></blockquote><p>At this point, Build Back Better died its first death. </p><p>But the administration and Congressional Democrats had not given up. In the spring of 2022 talks resumed, but now Manchin’s position was stronger than ever. The administration was becoming increasingly desperate to pass legislation of some kind and the war in Ukraine sent petrol and gas prices soaring, strengthening the hand of those who demanded a voice for fossil fuels. </p><blockquote><p>“Russia’s invasion of Ukraine gave Manchin a huge new bargaining authority, as did record inflation,” said Paul Bledsoe, a strategic adviser at the Progressive Policy Institute. That, he said, “changed the dynamic.”</p></blockquote><p>Every time Manchin hacked away at the bill, the climate policy community scrambled to come up with solutions and exception. By last week Manchin appeared to have everything he wanted. Build Back Better had become as much a short-term promotion package for fossil fuel production, as a long-term renewable energy program. As late as Wednesday night it seemed that a deal had been clinched. But then, Manchin walked away. In the end he did not even attempt to make a case, simply waving at reporters and pointing to inflation. So nonchalant was his dismissal that it left commentators wondering whether a deal had ever been there for the taking. </p><p>Manchin makes a villain straight out of central casting. He took more campaign donations from the oil and gas industry than any other Senator and owed his personal fortune to dealing in the coal business. He is <a href="https://www.nytimes.com/2022/07/18/opinion/climate-politics-manchin.html">vain</a> and extremely sensitive. But explaining how he is able to exercise the leverage he is, is a more subtle question than simply tracing his personal finances. It is not good enough at this moment of disillusionment simply to blame one bad apple. </p><p>As Kate Aronoff put it in the <a href="https://newrepublic.com/article/167073/manchin-climate-january-6">New Republic</a>: </p><blockquote><p>Manchin is as good a person as any to heap blame onto. He has blood on his hands. It’s comforting to have a single person to focus rage on. But his power to make or break climate policy was years, maybe centuries in the making. Until the real causes are snuffed out—from an undemocratic Constitution to a political system beholden to corporate profits—they’ll just keep boiling us.</p></blockquote><p>America is both one of the birth places of modern climate politics and the place where climate politics has gone to die, not once but over and over again. Biden’s is now the third democratic administration in succession to try to pass major climate legislation and to fail. Clinton tried with a carbon tax. Obama tried with cap and trade carbon pricing. Both efforts collapsed. </p><p>The 2021-2022 Build Back Better package was the product of a learning process. It started from the assumption that carbon pricing was impossible in modern America. Instead, the Biden administration would focus on a combination of regulations - clean air - and subsidies for electric vehicle adoption. These were not vague gestures. The scenarios were carefully calibrated by the <a href="https://www.newstatesman.com/world/americas/north-america/us/2021/12/the-stalled-presidency">leading climate modeling team</a>s. Never before had economic policy plans been so closely harnessed to emissions modeling. At least until the winter of 2021-2 there was still optimism that the compromise packages would allow America to meet its 2030 objectives. But even the most sophisticated modeling and dedicated campaigning were not enough to overcome Manchin’s cynical maneuvering. </p><p>Manchin is a figure who draws the eye. But he only has the sway that he does because the Democratic majority is as slim as it is. You could blame that on the failings of the Democratic party. Anguished postmortems will fill the summer and autumn, even more so if the Democrats do as badly in the midterms as is to be expected. </p><p>But was there really a strategy by which the Democrats might have won thumping majorities in 2020 in both houses of Congress enabling them to pass major legislation in the face of the filibuster rules and the anti-majoritarian procedures of Capitol Hill? One must surely doubt. For decades, neither the Democrats nor the Republicans have commanded the kind of huge majorities that enabled the New Deal of the 1930s and 1940s. America a profoundly divided society that does not easily yield large majorities for ambitious legislation from either side. Already in the 1990s, neoliberalism, though hegemonic in the political elite, lacked large majority support. Carter, Reagan and Clinton all had to maneuver carefully. </p><p>Nor is America peculiar in this regard. <a href="https://www.versobooks.com/books/3187-the-last-neoliberal">Bruno Amable</a> has made a similar case for contemporary France. With the break-up of traditional left and right social blocs, modern societies are fragmented without a clear alignment of political parties and projects with familiar social coalitions. Opinion pollsters generally find that the public in Europe and the US can be divided into five or six distinct social, political and cultural segments. The obvious way to organize power, therefore, is through some kind of moderated proportional representation model and a multi-tier coalition system of the type that operates in Germany. By contrast, the two party, first past the post systems in US as in the UK create a highly unpredictable political scene, in which the two main parties span interests and sub-groups that have hugely divergent interests and politics and the head to head off run off is hard to call, unless it is stabilized through gerrymandering of constituencies. </p><p>Invoking the German example is not meant to imply a simple solution either to the constitution of effective governance or the hegemony of green modernization in particular. In Germany too, the substance of climate policy remains disputed. But there is little or no scope for outright denial or obliviousness to the issue. What Joe Manchin along with the entire GOP has just done to the Biden administration, which is to put in question the priority of the entire climate agenda, would be unthinkable. </p><p>It is tempting to say that ultimately the problem in the US is that climate is just not popular enough. But that begs the question. Climate is not an issue that asserts itself simply through the force of facts. It is not the same as pollution or a war. Climate is abstract. To join the dots, to make it salient requires political work. Activists, scientists, the media, a few key politicians have, in fact, done that work in the US and the evidence is that they are gaining ground. </p><blockquote><p>A <a href="https://www.pewresearch.org/science/2022/07/14/americans-divided-over-direction-of-bidens-climate-change-policies/">poll conducted in early May</a> by the Pew Research Center found a majority of Americans, 58 percent, think the federal government is doing too little to reduce the effects of global warming while 22 percent said it is doing the right amount and 18 percent said it is doing too much. In the same survey, 71 percent said their community had been hit by extreme weather in the past year and a majority linked it to climate change.</p></blockquote><p>As Matto Mildenberger a leading political scientist in the field of climate policy remarks, the <a href="https://www.nytimes.com/2022/07/17/us/politics/climate-change-manchin-biden.html">narrative that climate was of declining salience to the public</a> simply does not stand up. </p><blockquote><div data-component-name="Twitter2ToDOM" class="tweet" data-attrs="{&quot;url&quot;:&quot;https://twitter.com/mmildenberger/status/1549390673656307712?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ&quot;,&quot;full_text&quot;:&quot;Been reading more and more takes that climate bill failed because of shifting public opinion: e.g. the NYT \&quot;reported\&quot; this week (without empirical evidence!) that the public has soured on climate as the economy weakened. Nonsense. A short 🧵 1/\n\n<a class=\&quot;tweet-url\&quot; href=\&quot;https://www.nytimes.com/2022/07/17/us/politics/climate-change-manchin-biden.html\&quot;>nytimes.com/2022/07/17/us/…</a>&quot;,&quot;username&quot;:&quot;mmildenberger&quot;,&quot;name&quot;:&quot;Matto Mildenberger&quot;,&quot;date&quot;:&quot;Tue Jul 19 13:48:17 +0000 2022&quot;,&quot;photos&quot;:[],&quot;quoted_tweet&quot;:{},&quot;retweet_count&quot;:572,&quot;like_count&quot;:1928,&quot;expanded_url&quot;:{&quot;url&quot;:&quot;https://www.nytimes.com/2022/07/17/us/politics/climate-change-manchin-biden.html&quot;,&quot;image&quot;:&quot;https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/412c0071-8b03-40a4-8825-5792a84d2c09_1050x549.jpeg&quot;,&quot;title&quot;:&quot;As the Planet Cooks, Climate Stalls as a Political Issue&quot;,&quot;description&quot;:&quot;Joe Manchin’s rejection of a compromise climate bill tells a familiar story: Voters and politicians put a higher premium on immediate issues, such as inflation and the economy, giving politicians a pass on global warming.&quot;,&quot;domain&quot;:&quot;nytimes.com&quot;},&quot;video_url&quot;:null,&quot;belowTheFold&quot;:true}"><a class="tweet-link-top" href="https://twitter.com/mmildenberger/status/1549390673656307712?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ" target="_blank"><div class="tweet-header"><img class="tweet-header-avatar" src="https://substackcdn.com/image/twitter_name/w_96/mmildenberger.jpg" alt="Twitter avatar for @mmildenberger" loading="lazy"><div class="tweet-header-text"><span class="tweet-author-name">Matto Mildenberger </span><span class="tweet-author-handle">@mmildenberger</span></div></div><div class="tweet-text">Been reading more and more takes that climate bill failed because of shifting public opinion: e.g. the NYT "reported" this week (without empirical evidence!) that the public has soured on climate as the economy weakened. Nonsense. A short 🧵 1/

<a class="tweet-url" href="https://www.nytimes.com/2022/07/17/us/politics/climate-change-manchin-biden.html" target="_blank">nytimes.com/2022/07/17/us/…</a></div><a class="expanded-link" href="https://www.nytimes.com/2022/07/17/us/politics/climate-change-manchin-biden.html" target="_blank"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/412c0071-8b03-40a4-8825-5792a84d2c09_1050x549.jpeg" class="expanded-link-img" loading="lazy"><div class="expanded-link-bottom"><span class="expanded-link-domain">nytimes.com</span><span class="expanded-link-title">As the Planet Cooks, Climate Stalls as a Political Issue</span><span class="expanded-link-description">Joe Manchin’s rejection of a compromise climate bill tells a familiar story: Voters and politicians put a higher premium on immediate issues, such as inflation and the economy, giving politicians a pass on global warming.</span></div></a></a><a class="tweet-link-bottom" href="https://twitter.com/mmildenberger/status/1549390673656307712?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ" target="_blank"><div class="tweet-footer"><span class="tweet-date">1:48 PM ∙ Jul 19, 2022</span><hr><div class="tweet-ufi"><span href="https://twitter.com/mmildenberger/status/1549390673656307712?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ/likes" class="likes"><span class="like-count">1,928</span>Likes</span><span href="https://twitter.com/mmildenberger/status/1549390673656307712?s=20&amp;t=YfB7fQO0VMeO2MGCB7uDxQ/retweets" class="retweets"><span class="rt-count">572</span>Retweets</span></div></div></a></div></blockquote><p>Even in West Virginia, Manchin was <a href="https://www.sierraclub.org/sierra/coal-miners-weren-t-happy-when-joe-manchin-derailed-build-back-better">criticized by the coal miners union</a> for his efforts to block Build Back Better.</p><p>The problem with climate politics in the US is not that you could not find a popular majority for a suitably designed program, but that the GOP and centrist Democrats have no interest in proposing or agreeing to such a policy. Beyond the individual figure of Manchin, this is where lobbying by fossil fuel industry matters. The influence of oil, gas and coal lobbyists and their associated industries works not on the broad mass of the public, but on the political class, to ensure that they dissuade, moderate and ultimately kill off proposals like Build Back Better.</p><p>Of course lobby groups play a key part here. Manchin is clearly in their pocket. But that by itself is not an adequate answer either. The fossil fuel industries, even in West Virginia, does not account for a dominant share of regional, let alone national economic activity. And there are, after all, major interests who stand to gain from the low cost energy that the renewable energy transition promises. So, this is the other key role for fossil lobbying. Not only do they seek to persuade the political class to oppose measures like Build Back Better they dissuade other business groupings from forming the kinds of coalitions for green modernization that are beginning to set the tone in Europe. </p><p>Another way of putting the same point is to ask why Build Back Better did not have more powerful friends? How could a giant national program come to depend on the vote of a single Senator who represents a state with a population smaller than that of Brooklyn. On this score, it is worth listening more closely to Manchin and the justifications he offers. His arguments are illogical but nevertheless telling. As reported by the <em>New York Times</em></p><blockquote><p>At the start of this week, Mr. Manchin said his top concern was the price at the pump and the need for more fossil fuels. “How do we bring down the price of gasoline?” he said. “From the energy thing, but you can’t do it unless you produce more. If there’s people that don’t want to produce more fossil, then you got a problem. That’s just reality. You got to do it.”</p><p>On Wednesday, after data was released showing the nation’s inflation rate at 9.1 percent, the highest in a year, Mr. Manchin said in a statement, “No matter what spending aspirations some in Congress may have, it is clear to anyone who visits a grocery store or a gas station that we cannot add any more fuel to this inflation fire.”</p></blockquote><p>As one of his spokespersons went on to elaborate: </p><blockquote><p>“Senator Manchin, believes it’s time for leaders to put political agendas aside, reevaluate and adjust to the economic realities the country faces to avoid taking steps that add fuel to the inflation fire.” </p></blockquote><p>In comments to TV news crews widely circulated by Fox, Manchin gestured to a supposed connection between inflation and debt. To fight inflation you have to “get the debt under control” he declared. This was not a moment for a big spending package like Build Back Better. Of course, the proposed legislation included taxation too, but on that too Manchin was a skeptic. He doesn’t want to squeeze American business.</p><p>What this suggests is that it may be a mistake to view the failure of Build Back Better primarily through lens of climate. It may, in fact, be better thought of as part of a more comprehensive effort on part of centrist Democrats, for whom Manchin makes a convenient frontman, to stall the reformist energies that were briefly unleashed on the left-wing of the Democratic Party in 2021. </p><p>The theory of change that informed the effort to pass Build Back Better was itself broad-based. Loosely derived from Green New Deal vision, Biden’s Jobs and Families Plans linked climate to a wider agenda of progressive policies. The gamble was that you could thus build a powerful electoral coalition. By the same token, however, you also multiplied your enemies. As Chait describes it in <em>American Prospect</em>: </p><blockquote><p>In the final weeks (AT: June/July 2022), Manchin returned to the bargaining table with a deal that still would have counted as a substantial achievement. The plan would have raised taxes on the ultrarich and allowed the federal government to save money by negotiating the cost of some prescription drugs. The proceeds from these measures — likely around a trillion dollars —&nbsp;would have been split between deficit reduction, energy investments (short-term fossil-fuel production, and long-term green-energy investment), and enhanced support for tax credits to help people buy health insurance. A <a href="https://nymag.com/intelligencer/2022/07/gottheimer-is-on-a-mission-to-destroy-bidens-presidency.html">key faction of Democrats in the House</a>, along with Senator Kyrsten Sinema, blanched at the tax hikes. Moderates have been privately coordinating their opposition, and it seems very likely that Manchin’s sudden opposition to raising taxes on the rich comes not from him, but from them — he sometimes takes the heat for fellow Democratic moderates. In this case, he is likely channeling their concerns and passing them off as his own.</p></blockquote><p>Not only did opposition in the House led by <a href="https://nymag.com/intelligencer/2022/07/gottheimer-is-on-a-mission-to-destroy-bidens-presidency.html">Josh Gottheimer of New Jersey</a> rally around opposition on taxes on the richest Americans, another issue was corporate taxation. In the progressive agenda of the early Biden administration, a key plank was the effort led by Janet Yellen at Treasury to create a global coalition around a 15 percent minimum corporation tax. The provision was due to be included in the reconciliation bill, which under the arcane procedures of the Senate, would bundle together all the key policy proposals to be voted through by the Democrats wafer thin majority. But as <a href="https://www.politico.com/news/2022/07/15/manchin-rejects-global-tax-plan-00046103">Brian Faler reported at Politico</a>, Manchin raised objections to this too. </p><blockquote><p>Sen. Joe Manchin on Friday rejected the idea of imposing a 15 percent global minimum tax on U.S. companies, blowing a big hole in the Biden administration’s campaign to remake the international tax system. Speaking with West Virginia radio host Hoppy Kercheval, Manchin (D-W.Va.) said he doesn’t support the administration’s  plan because other countries have yet to adopt the tax, and he doesn’t want to put American companies at a competitive disadvantage. “We’re not going to go down that path overseas right now,” said Manchin. “Because the rest of the countries won’t follow, and we’ll put all of our international companies in jeopardy, which harms the American economy.” “Can’t do that, so we took that off the table,” said Manchin, referring to his closed-door talks with Senate Majority Leader.</p></blockquote><p>What, you might ask, have climate measures got to do with global taxation? The link are so called “pay fors”, a legacy of the move spearheaded by Nancy Pelosi and supported by Janet Yellen’s Treasury in 2021 to ensure that the second wave of Biden administration measures did not add considerably to the national debt. That meant that climate and other spending would have to be funded through taxes. That went some way towards allaying the fears of fiscal conservatives, but it also widened the coalition against enacting any legislation at all. </p><p>The unintended side effect of Biden’s failed mega-pack of progressive measures is that Donald Trump’s $3 trillion December 2017 tax cuts that overwhelmingly favor the richest Americans are now likely by default to become permanent. As <a href="https://nymag.com/intelligencer/2022/07/joe-manchin-didnt-kill-biden-democrats-agenda-alone.html">Chait </a>comments: </p><blockquote><p><a href="https://nymag.com/intelligencer/article/donald-trump-2024-decision.html">Donald Trump</a> was able to unite his party behind an unpopular tax cut for the rich. Biden was unable to unite his party behind a popular reversal of that bill, or even a partial reversal. <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.niskanencenter.org_how-2Ddonor-2Dopinion-2Ddistorts-2Damerican-2Dparties_&amp;d=DwMFaQ&amp;c=7MSjEE-cVgLCRHxk1P5PWg&amp;r=-xCx-KoFuHYyHy8E_CxmxNx64_jEC3BHMAUJCYYWxM4&amp;m=rg7vPWzxr5G5br8cXZynWT876U2hfKNEQtOeC9kurCZoUSJCpdmQg2gN9BT1oTji&amp;s=wpOFNDE2xukVFHF2RpWuFNAc5XnrfLkW8_IkndwnUd4&amp;e=">Political scientists</a> have an explanation for both these things: The wealthy hold a disproportionate influence on both the elite in parties, pulling Democrats to the left of their voters on social issues, and Republicans to the right of their voters on economic issues.</p></blockquote><p>As <a href="https://prospect.org/economy/the-impossible-inevitable-survival-of-the-trump-tax-cuts/">David Dayen</a> points out in <em>American Prospect,</em> this is an astonishing reversal. Trump’s December 2017 tax measures were wildly unpopular. Reversing them and restoring the tax code of 2017 ought to provide all the funding the Democrats need. And yet instead, thanks to the Democrats themselves, Trump’s tax regime will make it unscathed through the Biden Presidency. </p><blockquote><p>within months of Biden taking office, a <a href="https://prospect.org/infrastructure/building-back-america/pro-trump-tax-cuts-caucus/">pro-Trump tax cuts caucus</a> took shape. Suddenly, the likes of Sinema, Gottheimer and Schrader and others were uninterested in raising taxes on corporations, capital gains, inheritances, pass-through businesses, wealthy households, or really anything or anyone else. The Biden administration and Senate leaders kept bargaining for other ideas. If the pro-tax cut caucus didn’t like raising marginal rates, how about a tax <a href="https://www.finance.senate.gov/imo/media/doc/Billionaires%20Income%20Tax%20-%20Section-by-Section.pdf">just on billionaires</a>? If they didn’t like new corporate rates, how about a <a href="https://taxfoundation.org/global-minimum-tax-us-international-tax/#:~:text=The%20global%20minimum%20tax%20establishes,jurisdiction%20where%20they%20have%20profits.">global minimum tax</a> for large corporations, negotiated with the entire world, that would prevent evasion? How about just beefing up IRS enforcement so that the taxes actually owed under the current structure are actually collected? One by one, the pro-Trump tax cuts caucus rejected these. The only part of the Trump tax cuts they really wanted to change was to reverse the repeal of the state and local tax deduction, practically the only non-giveaway to the rich in the whole package. Manchin finally became a full-fledged member of the pro-Trump tax cuts caucus last week, when he rejected any tax increases in reconciliation. The entire premise of Democratic policy for the last two years—use the rollbacks of the most unpopular (the only unpopular?) tax cut maybe in history to offset a new round of deeply needed public investment—was dead. … The Trump tax cuts are going to be made permanent, signed by whoever is president in 2025, if not by Biden before that. Despite lofty promises, not a single dollar of the uniquely unpopular policy, courtesy of the president maybe more reviled by Democrats than any other, will be touched. …. </p></blockquote><p>This is the full measure of the failure of the early Biden administration. It allowed innovative long-term spending plans to be burdened with short-term funding requirements. Those could largely have been met by reversing Trump’s 2017 cuts. And yet today it stands empty handed. Not only is Build Back Better dead, but Trump’s tax cuts live on and that double loss has been inflicted on Biden by the Centrists within his own party. </p><p>As David Dayen comments: </p><blockquote><p>(w)hy are the Trump tax cuts still standing? Is it something to do with tax policy in particular, and the Democratic allergy to tax increases? Is it a function of bare Congressional majorities, ridiculous legislative rules like the filibuster, and too-dramatic goals overlaid onto them? I think it goes deeper, and signals how Democrats have just forgotten what constitutes governing. The way they create policy ideas, form political coalitions, and work to pass measures through Congress is just impossibly broken. If you have unanimous opposition to a bad policy with no real political proponents and then can’t get a single thing done about it in the space of five years, it speaks to an essential malfunctioning at every level of the party and the process. Nobody should get a pass for it. It's nothing short of an embarrassment.</p></blockquote><p>Having failed comprehensively in Congress, the Biden administration now insists that it will double down on administrative regulations as a way to push forward the climate fight. </p><blockquote><p>“Action on climate change and clean energy remains more urgent than ever,” Mr. Biden said. “So let me be clear: if the Senate will not move to tackle the climate crisis and strengthen our domestic clean energy industry, I will take strong executive action to meet this moment.”</p></blockquote><p>But so far the administrative actions taken by the administration have in fact pointed in the opposite direction, aiming to appease the likes of Manchin and accelerate oil and gas development.</p><blockquote><p>the Interior Department <a href="https://www.nytimes.com/2022/07/01/climate/biden-oil-gas-drilling-alaska.html">offered the possibility of 11 new offshore oil and gas lease sales</a> in the Gulf of Mexico and Alaska — despite Mr. Biden’s campaign promise to end new drilling in federal waters … The White House also was weighing whether to allow a path for other fossil fuel projects, like a gas pipeline in West Virginia, in order to gain Mr. Manchin’s vote. …. The administration delayed federal rules to address methane, mercury and other pollutants from oil and gas facilities so as not to anger Mr. Manchin during negotiations, according to several administration officials. That’s two years lost time in a regulatory process that can be lengthy.</p></blockquote><p>Meanwhile, the entire viability of the regulatory route has been put in question by the Supreme Court where the conservative majority recently voted to limit the <a href="https://www.supremecourt.gov/opinions/21pdf/20-1530_n758.pdf">Environmental Protection Agency’s ability to regulate carbon emissions from power plants</a>. The EPA can continue to regulate greenhouse gases, but it has effectively lost the power to force the closure of the most polluting coal-fired plants, or compel utilities to switch to renewables. </p><p>****</p><p>Eighteen months on from the inauguration of January 2021, the Biden administration faces the shipwreck of its domestic policy agenda. Dayan sums up the mood on the left well</p><blockquote><p>Most important, stopping the will-they-or-won’t-they is an absolute political imperative. The party is exhausted by failure, and won’t hold out for another couple months of wishes and hopes. Eighteen months of Joe Manchin being America’s most well-known Democrat is enough. Just put (AT: what remains of) the bill on the floor and get this over with. Get something completed, and spend the August recess thinking about how we got here.</p></blockquote><p>The future as far as American progressives are concerned looks grim. </p><p>For two years in Washington the Republicans, hunkered down in iron clad opposition, were a sideshow. The politics that mattered were within the Democratic party, between the left, centrists and right-wing. Now, with the midterms looming, we are about to embark on a new, darker chapter dominated by the efforts of a resurgent GOP to crush the remaining life out of the Biden White House and to prepare the ground for the Presidential elections in 2024. </p><p>This gear shift in Washington will affect the entire world.  </p><p>When Biden’s climate agenda was announced in the spring of 2021 it was not merely a national event. The White House hosted a global climate summit ahead of COP26 in Glasgow. The point was to demonstrate that America was “back”. Both Biden’s climate and tax agenda were designed with global deals in mind. On both fronts US credibility is now cut to shreds.</p><p>This is, no doubt, very bad news. Reading the commentary on Manchin’s sabotage of Build Back Better you would be forgiven for thinking that it implied a death warrant for the world. But such exaggerations reflect the shock of the moment rather than clear-headed analysis of America’s actual influence on world affairs in 2022. </p><p>There may once have been a moment, in the 1990s perhaps, where global climate politics really did revolve around the battles in Washington DC. But today that is a deeply anachronistic view. America’s share of global emissions is less than 14 percent, half that of China, and its share is falling year by year. </p><p>Of course, a world with a cooperative, United States committed to the energy transition would be a better world. Trump showed how the US can anchor an anti climate coalition. But even with an obstructive United States, the energy transition in Europe and large parts of Asia has a momentum that will carry it forward regardless. Fundamentally, what impels this logic is the difference between energy exporters and energy importers and the increasingly compelling cost advantages of renewable energy. </p><p>As far as the world is concerned it merely confirms the fact that the US is an unreliable partner in the energy transition and has an in-built and profound structural bias towards fossil fuels. </p><p>The collapse of Build Back Better is bad news, above all, for America itself. </p><p>What it means is that the US energy transition will be slowed down. It will proceed without support and at a considerable disadvantage. It places Detroit, for instance, in an invidious position. The risk is that in the not too distant future the US becomes collateral damage as eurasian transition proceeds. That is bad news for US capital. American business misses out on the profits to be made from green modernization. Whilst carbon pricing is creating an entirely new asset class in Europe, America cannot even get to first base. </p><p>American capitalism will no doubt survive. What is more in question is the future of American society and the political system built on it. Above all the failure of the Biden administration’s domestic agenda is terrible news for “ordinary” Americans. It is one more sign of the refusal of the American political class to devise coherent and future-orientated solutions for American society as a whole. Instead of charting the off-ramp towards a greener future, the Biden Presidency is mounting a sustained campaign to hustle America’s oil and gas producers to maximize production and humbling itself before Saudi Arabia. The autopsies on Biden’s Build Back Better package may give Joe Manchin as the cause of death. But America’s problems with the energy transition go far deeper than that. </p><p>****</p><p>I love putting out Chartbook and I am particularly pleased that it goes out free to thousands of readers all over the world. But it takes a lot of work and what sustains the effort is the support of paying subscribers. If you appreciate the newsletter and can afford a subscription, please hit the button and pick one of the three options.</p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://adamtooze.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p></p><p></p><p></p><p></p>

<!--
{
  "post_id": "66539545.chartbook-139-the-battle-for-climate",
  "post_date": "2022-08-02T09:23:18.612Z",
  "is_published": true,
  "email_sent_at": "2022-08-02T09:23:18.851Z",
  "inbox_sent_at": "2022-08-02T09:23:18.851Z",
  "type": "newsletter",
  "audience": "everyone",
  "title": "Chartbook #139 The battle for climate legislation in the US: making sense of the Manchin-Schumer compromise ",
  "subtitle": ""
}
-->
<p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://adamtooze.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p>Passing climate legislation in the US is an attritional business. Clinton tried and failed. Obama tried and failed. Until the last week of July it seemed that Biden was doomed to fail too. </p><p>The House had signaled its clear support for big legislation last year, including a raft of climate measures in a&nbsp;<a href="https://www.reuters.com/markets/us/us-house-vote-bidens-175-trillion-bill-after-hours-long-delay-2021-11-19/">$1.75 trillion bill</a>. But in the finely balanced situation with the Republicans in dogged opposition it was the Senate that counted and, there, the West Virginia Senator and coal baron Joe Manchin stepped up to play the part of villain. </p><p>In an <a href="https://www.nytimes.com/2022/07/30/climate/manchin-climate-deal.html">eight month ordeal</a> he forced the scrapping of clean air standards. He also shot down plans for bigger tax credits for consumers who bought union-made electric vehicles, <a href="https://www.nytimes.com/2022/07/12/climate/electric-vehicle-tax-credits-manchin.html">a measure that was opposed by Toyota Motor</a>, which operates a nonunion plant in West Virginia. In December he announced he simply could not vote for a bill of major spending. When he returned to the table, he sliced away at the fee imposed on oil and gas operators for leaks of methane. He rejected an early plan by Democrats <a href="https://www.nytimes.com/2021/12/16/climate/manchin-offshore-drilling-climate.html">to permanently ban oil drilling in the Atlantic and the Pacific</a>. With the Ukraine war raging and energy prices surging, Manchin became ever more adamant in his backing for fossil fuels. Then, finally, within a few feet of the finish line, in mid-July Manchin slammed the door. </p><p>On July 13th the US inflation print hit 9.1 percent. The following day Manchin declared that he could not support what was left of the Build Back Better Bill. Amongst wailing, tearing of hair and gnashing of teeth, the Biden administration’s climate policy was declared dead. Several of us wrote obituaries and a mini-debate began about how to understand the failure of the Biden administration. </p><p>Then Manchin pivoted once more. On <a href="https://www.politico.com/news/2022/07/27/manchin-schumer-senate-deal-energy-taxes-00048325">18 July behind closed doors</a>, secret negotiations resumed between Manchin and Schumer, which on Wednesday 27th produced a remarkable new compromise. Build Back Better was dead. But much of its climate-substance now returned in the form of the Inflation Reduction Act. The announcement came on the day that the Senate also voted through CHIPS act. Whereas ten days earlier the Biden administration had appeared dead in the water, it now seemed possible that the Democrats would pass two major pieces of legislation ahead of the summer recess and the midterms. </p><p>The Manchin-Schumer compromise in the draft Inflation Reduction Act includes: </p><p><strong>$260 billion in clean-energy tax credits; $80 billion in new rebates for electric vehicles, green energy at home and more; $1.5 billion in rewards for cutting methane emissions; $27 billion ‘green bank’ for a federal green bank to complement the 23 that already exist across the US; support for coal miners with black lung</strong></p><p>All told, Democrats estimate the bill will bring in $739 billion in revenue and will invest $433 billion in spending. The result will be to reduce the deficit by in the order of $300 billion. The large-scale pledges on climate spending are flanked by provisions that will force through $288 billion in savings on Medicare expenditure, at the expense of the pharmaceutical industry, a three year $64 billion subsidy to support Obamacare and a $2000 cap on out of pocket costs for seniors on Medicare. </p><p>If it passes, the IRA will be the largest piece of climate legislation that Congress has ever approved. As has been true throughout the arduous process of legislative drafting, the impact of the Inflation Reduction Act on emissions was immediately modeled by climate think tanks. In this respect 2021-2022 marks a new era in US economic policy. The <a href="https://rhg.com/research/inflation-reduction-act/">Rhodium’s group</a> conclusions are broadly sanguine:</p><blockquote><p>The array of clean energy tax credits has the greatest impact on emissions. Long-term, full value, flexible clean energy tax credits for new clean generation and retention of existing clean generators are roughly in line with the scenarios we examined in <a href="https://rhg.com/research/build-back-better-clean-energy-tax-credits/">prior research</a>. Long-term tax credits for <a href="https://rhg.com/research/carbon-capture-american-jobs-plan/">carbon capture</a>, direct air capture, <a href="https://rhg.com/research/clean-hydrogen-decarbonization/">clean hydrogen</a> and <a href="https://rhg.com/research/closing-the-transportation-emissions-gap-with-clean-fuels/">clean fuels</a> provide a launch pad for these key technologies to scale and build on the investments of the IIJA hub and demonstration programs. Federal investments have the potential to generate multi-megaton scale natural carbon removal in soils and forests. Long-term electric vehicle (EV) tax credits will accelerate the diversification of passenger vehicles away from their over-reliance on petroleum, though the EV credits included in this bill are scaled back from previous proposals. Manufacturing tax credits and investments will help diversify supply chains, expand domestic capacity to produce the clean technologies the world needs to achieve deep decarbonization, and can help enable the record levels of wind and solar deployment we project in our modeling. Our preliminary assessment of the IRA is that its policies, including the new leasing provisions, reduce net GHG emissions by 31% to 44% below 2005 levels in 2030 (Figure 1).  … If Congress passes this package, additional action from executive agencies and subnational actors can put the US’s target of cutting emissions in half by 2030 within reach. … Put simply, the IRA has the potential to be the biggest climate action ever taken by Congress. </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!ngh4!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!ngh4!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png 424w, https://substackcdn.com/image/fetch/$s_!ngh4!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png 848w, https://substackcdn.com/image/fetch/$s_!ngh4!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png 1272w, https://substackcdn.com/image/fetch/$s_!ngh4!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png 1456w" sizes="100vw"><img src="https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png" width="1108" height="952" data-attrs="{&quot;src&quot;:&quot;https://bucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com/public/images/262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:952,&quot;width&quot;:1108,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:236211,&quot;alt&quot;:&quot;&quot;,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" title="" srcset="https://substackcdn.com/image/fetch/$s_!ngh4!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png 424w, https://substackcdn.com/image/fetch/$s_!ngh4!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png 848w, https://substackcdn.com/image/fetch/$s_!ngh4!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png 1272w, https://substackcdn.com/image/fetch/$s_!ngh4!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F262d9b30-5a0f-48a3-b4ac-c2c4dcba9a25_1108x952.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-refresh-cw"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div></blockquote><p>****</p><p>Quite suddenly, <a href="https://www.nbcnews.com/politics/congress/manchins-surprise-democrats-finally-feel-robust-agenda-run-rcna40648">as one House member put</a>, the Democrats are “at the precipice” of actually getting something done. </p><p>How did this happen? How did a Presidency that seemed stalled, suddenly recover momentum. Why did commentators, myself included get it wrong? It isn’t fun to revisit bad calls, but honesty demands some kind of reckoning with this disorientating experience. How do we make sense of this switchback? </p><p>First thing to say, is that Manchin’s surprises really do seem to be surprises even for those very close to the process. The heartbreak and shock that Manchin engendered twice over, in December 2021 and July 2022, is genuine. Each time his change of heart seems to be <a href="https://www.msn.com/en-us/news/politics/manchin-and-sinema-are-on-a-collision-course-over-closing-a-tax-loophole-for-rich-americans-it-could-upend-biden-s-790-billion-deal/ar-AA107S3o?ocid=msedgntp&amp;cvid=a62174ed8ff0415181444574333b0866">last-minute and counter to expectation</a>s. </p><p>So labyrinthine was the process of negotiations between Manchin and Schumer that some are convinced that it is part of a <a href="https://www.dailykos.com/stories/2022/7/30/2113345/-Was-this-Manchin-Schumer-and-Biden-s-plan-all-along-Saturday-s-GNR">5-dimensional chess game</a> that the Democrats have been playing to outwit McConnell and the GOP. </p><p>That would be reassuring. It would imply tactical control. If true it would also imply something weird about the US political system: given the GOP roadblock, the best way for the Democrats to pass any legislation is to appear as though they have checkmated themselves, allowing them to attract GOP support for bipartisan bills, before unleashing a partisan ambush to pass the all important reconciliation legislation. The outcome may be pleasing. But this is a crazy way to conduct public affairs.  </p><p>Pleasing though this theory may be, it also does not chime with the understanding of those closest to the process. Rather than a successful manipulative tactical game, something closer to the reverse seems to have transpired. After Manchin’s veto on July 14th it really did seem as though Biden’s legislative agenda was dead. The realization of that shock, the sense of despair widely shared across the Democratic camp, echoed and amplified by the commentariat, triggered a rally. Biden’s Presidency was in peril. It was time to act. </p><p>In the tense negotiations between 13th and 14th of July tempers had frayed. As Manchin tells it, he and Schumer reconnected the following week:</p><blockquote><p>“By Monday we ran into each other again. I (Manchin) said, ‘Are you still upset?’ He (Schumer) said, ‘I’m very discouraged.’ I said, ‘Well, you shouldn’t be. Something positive could be done if we all want to work rationally,’” Manchin said, recounting the key moment. &nbsp;He said their staffs started working together in earnest the next day, July 19. They finally hashed out a deal on Tuesday evening (26th), recognizing they had to announce the package on Wednesday if it had any chance of passing before the scheduled start of a lengthy summer recess on Aug. 6. … It just so happened the timing aligned perfectly with Schumer’s plan to hold a vote on final passage of the chips and science bill at noontime Wednesday. Republicans who voted for tens of billions of dollars for the domestic semiconductor manufacturing industry and the National Science Foundation were outraged and felt betrayed.&nbsp;Sen. John Cornyn (R-Texas), a key player in getting the chips and science bill passed, said he received “assurance privately from some Democrats, including the staff of the Senate majority leader, that the tax and climate provisions were off the table,” which Republicans said would be a precondition for moving the chips bill. &nbsp;Cornyn took to the Senate floor Thursday afternoon to rail against the secret climate and tax deal.&nbsp; “How can we negotiate in good faith, compromise where necessary, and get things done together after the majority leader and the senator from West Virginia pull a stunt like this?”&nbsp;he said with rising exasperation. “To look you in the eye and tell you one thing and to do another is absolutely unforgivable.”&nbsp;</p></blockquote><p>Source: <a href="https://thehill.com/homenews/senate/3578689-inside-the-secret-manchin-schumer-deal-dems-shocked-gop-feels-betrayed/">The Hill </a></p><p>Interestingly, both Manchin and Schumer preferred to hold the White House at arms length. They did not wish to repeat the direct negotiations between Manchin and Biden in 2021 which ended in failure and public recriminations after months of fruitless talks. &nbsp;</p><blockquote><p>“President Biden was not involved,” Manchin told West Virginia MetroNews.&nbsp;“I was not going to bring the president in. I didn’t think it was fair to bring him in. This thing could very well have not happened at all,” he said, explaining he didn’t want to involve the president in case talks fell apart again. &nbsp;</p></blockquote><p>What we are witnessing is not a cunning plan but a desperate improvised effort to pull back from the brink. It is the fruit of an effort in crisis-management triggered by the dawning realization of disaster. How was this deal possible? </p><p>****</p><p>One simple theory is that Manchin remembered that <a href="https://www.washingtonpost.com/opinions/2022/07/29/manchin-drug-energy-bill-still-democrat/">he was a Democrat</a>. </p><p>As Manchin <a href="https://www.politico.com/news/2022/07/27/manchin-schumer-senate-deal-energy-taxes-00048325">described his relationship</a> with Chuck Schumer of New York: “It’s like two brothers from different mothers, I guess. He gets pissed off, I get pissed off, and we’ll go back and forth. He basically put out statements, and the dogs came after me again.” Clearly, Manchin did not want to be blamed for the failure of the Biden Presidency. He has ambitions. He wants to get things done. </p><p>Furthermore, at some point, he may have come to the realization that climate measures are actually good politics, even in West Virginia. It is commonly said that American voters do not support climate action, especially with stagflation looming. But that is a claim <a href="https://newrepublic.com/article/167220/manchin-climate-smart-politics">not strongly supported by evidence</a>. In fact:</p><blockquote><p>Climate action enjoys broad support. Indeed, some climate policies are supported by huge majorities, including Republican voters. A large majority (58 percent) believes the federal government is doing too little to address the problem. As U.C. Santa Barbara political scientist Matto Mildenberger has been pointing out on Twitter, the public favors climate action and rewards it. Furthermore, while Manchin’s West Virginia constituents are more conservative than the national population, polling shows a clear majority of the state’s voters support aggressive clean energy initiatives, and many coal miners <a href="https://www.washingtonpost.com/climate-environment/2022/05/18/joe-manchin-climate-change/">supported Build Back Better</a> due to its funding for treatment of black lung disease. So the more plausible explanation for Manchin originally blocking climate action wasn’t because of voters but because he’s a coal baron (coal mine <em>owners </em><a href="https://www.washingtonpost.com/climate-environment/2022/05/18/joe-manchin-climate-change/">opposed</a> Build Back Better). His most recent move—supporting climate legislation and pitching it as an anti-inflation measure—is far closer to a majoritarian position.</p></blockquote><p>Specific policies like a <a href="https://insideclimatenews.org/todaysclimate/manchins-climate-bill-includes-27-billion-for-a-green-bank-heres-why-thats-a-big-deal/">green bank </a>enjoy large majorities even in conservative states.</p><blockquote><p>In Manchin’s homestate of West Virginia, 54 percent of likely voters supported the idea of a national green bank, the survey found, with 31 percent opposing. In Alaska, 68 percent supported the bank and 20 percent opposed. Among oil, gas, and coal workers and their families, support was even higher: 62 percent and 77 percent of them supported a green bank in West Virginia and Alaska, respectively.</p></blockquote><p>And this points to a bigger and broader point. It turns out that though the US may since the 1990s have been the place where climate policy goes to die, the balance may finally be shifting. As<strong> Zack Colman, Josh Siegel and Kelsey Tamborrino reported in an important piece in <a href="https://www.politico.com/news/2022/07/29/the-manchin-pressure-campaign-ceos-labor-bosses-and-bill-gates-00048621">Politico</a>, Manchin’s threat to sink Build Back Better unleashed a furious lobbying effort on behalf of green business opportunities.</strong></p><blockquote><p><strong>When Joe Manchin balked at the clean energy incentives in Democrats’ expansive spending bill two weeks ago, the corporate C-suites and union boardrooms jumped into action. With hundreds of billions of dollars of incentives for manufacturing, electric vehicles, nuclear power and carbon capturing technology hanging in the balance, executives from some of the nation’s biggest companies and labor unions made their case to the Democratic West Virginia senator: The next generation of clean tech needed Washington’s backing to take off. Clean energy manufacturing companies with plans to set up shop in Manchin’s state helped orchestrate the 13-day effort to change his mind …. That push — which two of the people said included a call from Bill Gates, whose venture capital firm has backed a West Virginia-based battery start-up — was taking place alongside a campaign by other senators along with economist and inflation hawk Larry Summers to convince Manchin of the merits of the bill. On Capitol Hill, Democratic Sens. John Hickenlooper of Colorado, Chris Coons of Delaware and Tina Smith of Minnesota continued engaging with Manchin and his staff behind the scenes, …. Duke Energy and Constellation Energy making the case for the clean energy package in the days after Manchin appeared to walk away from the energy and climate measures. A senior executive with a clean power company said his firm communicated with Manchin, Schumer and Senate Finance Chair Ron Wyden (D-Ore.) in the past two weeks “softly reminding them” that “tens of billions of dollars in investment are at stake here.” Ultimately, Summers, the former Treasury secretary under President Bill Clinton, made the case that the climate package would not stoke inflation as Manchin had feared. Economists from the Wharton School at the University of Pennsylvania and deficit reduction advocate Maya MacGuineas, president of the nonpartisan think tank Committee for a Responsible Federal Budget, also briefed Manchin during that period … Jason Walsh, executive director of the BlueGreen Alliance, a coalition of labor and environmental groups, said several West Virginia companies pushed Manchin to back the credits as well — even suggesting failure to pass the bill imperiled their plans to invest in new operations. A senior executive with a utility operating in Appalachia said that his company communicated with Manchin how aspects of the bill such as tax credits to build clean energy manufacturing plants at former coal sites and incentives for developing small nuclear reactors and hydrogen would help West Virginia’s economy. “We know coal plants are ultimately going to close,” the executive said. “What is going to replace them? What are the jobs? What are we transitioning to? … Nucor Corp., the largest U.S. steelmaker, which is building a new plant in West Virginia, also reached out to Manchin’s staff — as did the Carbon Capture Coalition, a cross-sector group that includes labor unions, oil companies and manufacturers, according to a person familiar with the contacts. Form Energy, a battery storage startup backed by Gates’ Breakthrough Energy Ventures and which has plans for a West Virginia manufacturing hub, walked Manchin’s staff through its growth trajectories with and without the proposed suite of legislative incentives, a person directly familiar with the interaction said. … And labor unions also pressed Manchin. The United Mine Workers of America engaged throughout the 13-day period with Manchin’s staff … Brandon Dennison, the CEO of the economic development organization Coalfield Development, pointed to companies like Solar Holler, a West Virginia-based solar installer whose employees are members of the International Brotherhood of Electrical Workers labor union. Dennison said that when he talked to Manchin’s staff in the past two weeks, he made it clear that passing clean energy incentives was about giving West Virginia “a chance to stay an energy state. “If we want to benefit from the investments and the jobs that are going to come with that transition, we need to be part of the proactive solutions and policies rather than constantly playing on defense,” Dennison said. “That’s the case I tried to make.”</strong></p></blockquote><p>What this suggests is that in the future we may look back on Manchin’s pivot in July 2022 as the moment at which the green capitalist coalition in the US had finally gathered sufficient strength to overcome at least the most dogged defense of the energy status quo. As one commentator <a href="https://www.washingtonpost.com/business/2022/07/30/climate-solar-manchin-china/">remarked</a>: “This is a historic climate bill, but it’s also one of — if not <em>the </em>— most significant industrial policy bills of this era”.</p><p>Again, West Virginia stands to benefit, as the <a href="https://www.nytimes.com/2022/07/30/climate/manchin-climate-deal.html">NYT reports</a>.</p><blockquote><p>West Virginia remains the nation’s second-largest producer of coal, but its mining industry has declined sharply over the past decade as electric utilities <a href="https://www.nytimes.com/2020/05/13/climate/coronavirus-coal-electricity-renewables.html">have closed hundreds of coal plants nationwide</a> because of competition from inexpensive natural gas and renewable power. Industry leaders said they expected more coal plant closures with the passage of the bill. “Our preliminary estimates indicate that West Virginia would be one of the states with the largest number of coal retirements due to the wind and solar tax credits,” Michelle Bloodworth, chief executive of America’s Power, an industry trade group, said in a statement. But these days, there are more former coal miners in West Virginia than current coal miners, and the bill will undoubtedly help them, said Phil Smith, the top lobbyist for the United Mine Workers of America. He praised the permanent funding for the Black Lung Disability Trust Fund as well as the tax credits for carbon capture, a technology that Mr. Manchin has called “critical” but that has so far struggled to gain traction because of high costs. “If we’re going to have coal industry 15, 20, 30 years from now, it is because we have developed carbon capture and deployed it, that’s just the truth,” Mr. Smith said. “Folks out in the coal fields understand that. And the coal companies understand that.” Mr. Smith said the bill’s $4 billion in tax incentives for renewable energy manufacturers to build their factories in former coal fields would directly help the approximately 45,000 miners nationwide who have lost their jobs in the past decade. … another $5 billion in the package that would allow existing coal-fired power plants to improve their efficiency and adopt environmental controls like scrubbers, which remove pollutants from smokestacks. Those measures to help the coal industry, she noted, come on top of $8.5 billion for carbon capture and storage that Mr. Manchin secured as part of a <a href="https://www.nytimes.com/2021/11/15/us/politics/biden-signs-infrastructure-bill.html">bipartisan infrastructure bill</a> last year.</p></blockquote><p>But if the Manchin-Schumer bill marks an important shift in America’s political economy, Machin’s interventions have also given that shift a profoundly conservative shape. Most obviously, the Inflation Reduction Act is a fraction of the size originally envisioned for Biden’s legislative initiatives. The Democrats, who <a href="https://www.newsbreak.com/news/2686353312621/bill-gates-was-among-a-wide-range-of-ceos-and-labor-bosses-who-lobbied-to-change-manchin-s-mind-on-the-inflation-reduction-act-report">once aspired</a> to pass a mammoth $3.5 trillion bill are now cheering a $433 billion package.</p><p>The Manchin-Schumer bill is not only shrunken in size. It is conservative in its political framing and larded with concessions to fossil fuel interests. Whereas energy transition was once paired with social radicalism, it is now linked to Manchin’s agenda of energy security, inflation control and deficit reduction.</p><p>To claim that the Manchin-Schumer compromise will actually reduce inflation is an overstatement, but according to the influential analysis of the Wharton School it is broadly <a href="https://www.yahoo.com/news/wharton-school-finds-manchin-schumer-191315563.html">inflation-neutral</a>. </p><blockquote><p>The <a href="https://budgetmodel.wharton.upenn.edu/issues/2022/7/29/inflation-reduction-act-preliminary-estimates">analysis</a>, produced by the Penn Wharton Budget Model, finds that the Inflation Reduction Act “would very slightly increase inflation until 2024 and decrease inflation thereafter.” The increase could be as high as 0.05 percentage points in 2024, and could be followed by an estimated 0.25 percentage point fall in the Personal Consumption Expenditures price index by the late 2020s. “These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation,” write the study’s authors. </p></blockquote><p>The net effect of the bill, according to the Wharton study, will be to reduce the deficit by $248 billion over the budget window. </p><blockquote><p>Included in the bill is a 15 percent corporate minimum tax, which Schumer and Manchin argued will collect $739 billion in government revenue over ten years. Overall, “a&nbsp;decrease in spending on prescription drugs combined with increases in revenues from personal income taxes and business taxes lead to a decrease in government debt will&nbsp;lead to a decline in government debt by 8.4 percent by 2050,” the model says.</p></blockquote><p>Meanwhile, the big news from the fossil fuel industries is that <a href="https://www.politico.com/news/2022/07/28/manchin-oil-gas-biden-schumer-climate-bill-00048514">they don’t hate</a> the Manchin-Schumer compromise either. </p><blockquote><p><strong>the legislation contains what some called “Easter eggs” that would benefit oil and gas companies, including access to new swaths of federal waters in Alaska and the Gulf of Mexico. … Those leasing provisions alone would offer a win for oil and gas companies that are feuding with the Biden administration over Interior’s slow pace of fossil fuel lease sales, one lobbyist for the industry said. Meanwhile, the bill’s proposal to charge a fee of up to $1,500 a ton for the petroleum industry’s emissions of methane, a potent greenhouse gas, would be less of an issue for large oil companies already working on reducing them, industry analysts said.</strong></p></blockquote><p>As one lobbyist remarked: </p><blockquote><p><strong>“The Easter eggs that Manchin forced into the bill on leasing, they’re a big deal. If you squint hard enough, you can see this being a bipartisan compromise.” The bill would also make it easier for businesses to use a tax credit for deploying technology that captures and stores planet-warming carbon emissions, which has become big business for companies like Exxon Mobil and Chevron. … “If enacted ... this package would provide the most transformative and far-reaching policy support in the world for the economy-wide deployment of carbon management technologies,” Madelyn Morrison, spokesperson for the advocacy group Carbon Capture Coalition, said in a prepared statement. … Oil company BP said the deal offers a lot to like for oil companies that are extending their reach into renewables, carbon capture and other forms of alternative energy. … “We applaud Senate lawmakers for making progress toward a historic climate deal,” BP spokesperson Josh Hicks said in an email. “BP has actively advocated for Congress to pass strong climate legislation, including the full suite of clean-energy and low-carbon tax credits the U.S. House passed in 2021. We will continue engaging constructively with policymakers to advance these measures as we aim to become a net zero company by 2050 or sooner.”</strong></p></blockquote><p><strong>Unsurprisingly, the American Petroleum Institute, the trade group representing the largest oil producers in the country, was more restrained in its initial take. But even <a href="https://www.bloomberg.com/news/articles/2022-08-01/manchin-spending-deal-includes-billions-in-taxes-on-oil-sector?sref=wOrDP8KX">EXXON’s CEO </a>commented that the legislation as a step in the right direction. </strong></p><p>Environmental groups meanwhile are <a href="https://www.dailykos.com/stories/2022/7/29/2113438/-Coalition-calls-on-Biden-and-Schumer-to-ditch-fossil-fuel-poison-pills-in-Manchin-climate-deal">furious</a> at the compromises forced by Manchin.</p><p>Under the terms of the deal, the Department of Interior would be required </p><blockquote><p>over the next decade to offer oil and gas drilling leases on&nbsp;at least 2 million acres of public land as well as&nbsp;60 million acres offshore&nbsp;in any year the department&nbsp;seeks approval of new renewables projects on federal land or waters. That would hold renewables “hostage” to expanded fossil fuel extraction, said&nbsp;Brett Hartl, CBD’s government affairs director. CBD’s Hartl&nbsp;<a href="https://www.commondreams.org/news/2022/07/29/climate-coalition-biden-and-schumer-reject-fossil-fuel-expansion-manchin-deal">called </a>the IRA a “devil’s bargain&nbsp;that ignores science and locks us into at least a decade of new oil and gas extraction."&nbsp;In a CBD, press statement, he said, “This is a climate suicide pact. It’s self-defeating to handcuff renewable energy development to massive new oil and gas extraction. The new leasing required in this bill will fan the flames of the climate disasters torching our country, and it’s a slap in the face to the communities fighting to protect themselves from filthy fossil fuels.”</p></blockquote><p>Erich Pica, president of Friends of the Earth,&nbsp;commented </p><blockquote><p>“The Inflation Reduction Act may be the most Washington can offer right now, but it’s a far cry from what’s actually needed to address the climate crisis. The investments in renewables, energy efficiency and Superfund clean-ups will make a difference, but communities and the climate continue to be sacrificed to Sen. Manchin’s fossil fuel demands.”</p></blockquote><p>All told the terms of the deal will make it impossible for Biden <a href="https://www.nytimes.com/2022/06/23/climate/biden-offshore-drilling-climate.html">to uphold his campaign promise</a> to end new federal oil and gas leasing. </p><p>Overall, the Inflation Reduction Act is a true compromise. On substance, the balance of evidence generated by emissions models strongly suggests that the advantage lies with the energy transition. as Manish Bapna, president of the Natural Resources Defense Council, told the <a href="https://www.nytimes.com/2022/07/30/climate/manchin-climate-deal.html">New York Times</a>, “his group’s internal modeling showed that the emissions cuts from the legislation would be as much as 10 times greater than the effects from the support it extends to fossil fuels. He called the fossil fuel provisions “pain points” but said overall the deal was “significantly positive.”</p><p>But the balance of political arguments is rather different. If the basic aim of the early Biden administration was to reconfigure American politics with a bold legislative agenda under an overtly progressive brand, then that project has come to grief and the last minute Manchin-Schumer compromise does not change that. The combination of GOP opposition, spoiling by Manchin and Sinema, and the surge in inflation, have fundamentally changed the terms of the discussion and the legislative possibilities. What has emerged in the CHIPS act and the IRA are two pieces of industrial policy legislation that may significantly alter America’s political economy. But they do so under the sign of global geopolitical competition, energy security and fiscal restraint. This is not incompatible with Biden’s message in the spring of 2021, but it recasts that message in distinctly conservative terms. </p><p>And, at the time of writing, it still remains unclear whether Manchin-Schumer compromise will fly. Given the last minute nature of the compromise and the Congressional recess on August 6th, the timeline is incredibly tight. The draft bill faces a grueling passage through the Senate. </p><p>Manchin’s pivot has unleashed not just the constructive forces of green modernization, but also the lobbyist interests that hitherto have sheltered behind Manchin’s stonewall. As one person close to the process commented to me, the fight will be fought this week. </p><blockquote><p>In a notice reviewed by <a href="https://www.nytimes.com/2022/08/01/us/politics/democrats-climate-deal-senate.html">The New York Times</a>, Democratic floor staff offered some advance advice for senators and their aides as they looked toward the marathon voting session. “Please be patient, stay hydrated, wear comfortable shoes, bring snacks for your hideaway, a blanket for your lap as it usually gets cold in the chamber at night and anything else to make you comfortable as we hunker down and get to work,” it said.</p></blockquote><p>Apart from snacks and hydration, it is political economy that is to the fore. The Democrats still need every vote in the Senate and, as of the time of writing, Kyrsten Sinema of Arizone has been ominously silent on the compromise deal. </p><p>She was not party to the conversation between Manchin and Schumer - the “brothers from different mothers”. And there is nothing that Sinema likes to do more than to break liberal hearts over issues like the privileges given to <a href="https://www.bloomberg.com/news/articles/2022-08-01/sinema-s-silence-on-manchin-schumer-bill-keeps-everyone-guessing?sref=wOrDP8KX">taxation on carried interest</a>. </p><blockquote><p>Talking points that are circulating emphasize private equity’s influence in Arizona’s economy and how taxing the industry could chill job creation. A number being circulated, originating from research by lobby group American Investment Council, is that private equity-backed businesses have employed some <a href="https://www.investmentcouncil.org/state/arizona/">229,000 people in Arizona</a>.</p><p>Sinema isn’t expected to oppose all tax changes. But in the past she’s indicated that she doesn’t support eliminating the carried interest break. That tax perk allows private equity and hedge fund managers to pay lower capital gains tax rates, which top out at 23.8%, rather than the 37% income tax rate on a portion of their earnings. The senator hasn’t publicly explained the reasoning for her stance on carried interest.&nbsp;</p><p>… Sinema is the main reason the smaller Inflation Reduction Act proposal now on the table doesn’t reverse the Trump-era corporate and individual rate cuts. But it does impose a minimum tax on corporations and eliminates the carried interest break, which has led to heavy pressure from Republicans and industry.</p></blockquote><p>That may be too much for her to stomach. There may also be a rebellion of right-wing low-tax Democrats in the House, if they do not get their way. </p><blockquote><p>Eliminating carried interest is a relatively small change dollar-wise in the context of the $739 billion in tax provisions in the bill. It would only raise about $14 billion additional tax dollars over the course of the decade. If Sinema were to object to repealing carried interest, it could be stripped from the bill without large consequences on other spending priorities, but it could be politically difficult for other Democrats to hand a win to hedge funds and private equity firms.</p></blockquote><p>The result of the Congressional battle this week remain to be seen. Whatever transpires - surprise victory or oft-predicted defeat - the basic and most general point is that this entire process is unbelievably contingent. The balance of forces in US political economy as refracted through the structures of American politics are, in the current moment, finely balance. The Democratic coalition, though it can draw on support of progressive elements of American business, is internally riven. What is clear is that the progressive impetus of 2021 has been decisively broken. The CHIPS and IRA Acts may be effective, but they are not pieces of legislation that will transform American society. They work with the grain of its political economy. And given the dismal poll numbers that still dog the Democrats, they may have come too late, and be too overshadowed by the issue of inflation, to secure what the Democrats and American democracy most urgently need - something less than total disaster in the mid-terms. The progressive side of the Biden team has been worn down, whether the political obituaries for the Biden administration as a whole were written prematurely still remains to be seen. </p><p>*****</p><p>I love putting out Chartbook and I am particularly pleased that it goes out free to thousands of readers all over the world. But it takes a lot of work and what sustains the effort is the support of paying subscribers. If you appreciate the newsletter and can afford a subscription, please hit the button and pick one of the three options.</p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://adamtooze.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://adamtooze.substack.com/subscribe?"><span>Subscribe now</span></a></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p><p></p>