Manchin says he won’t back Biden’s spending bill that contains major trade irritant with Canada

December 19, 2021
Manchin says he won't back Biden's spending bill that contains major trade irritant with Canada

Canada and other countries were hoping a U.S. senator might kill a controversial electric-vehicle tax credit that has angered America’s trading partners.

Sen. Joe Manchin is now threatening not just to do that: he sounds like he’s planning to torpedo the entire Build Back Better legislation that contains that provision as one of numerous measures that form the heart of the Democratic Party’s priorities.

The moderate Democrat, who is key to President Joe Biden’s hopes of passing the $1.75-trillion US domestic investment bill, said on Sunday he would not support the package.

“I cannot vote to continue with this piece of legislation,” Manchin said during an interview with the Fox News Sunday program, citing concerns about inflation. “I just can’t. I have tried everything humanly possible.”

The White House called Manchin’s remarks a breach of commitments he made to find common ground, and said it would find a way to move forward with the legislation in 2022.

“If his comments on FOX and written statement indicate an end to that effort, they represent a sudden and inexplicable reversal in his position, and a breach of his commitments to the President and the Senator’s colleagues in the House and Senate,” White House press secretary Jen Psaki said in a statement.

Canada and other countries have mounted a frantic lobbying effort to persuade U.S. senators to modify one single provision of that legislation involving vehicles.

CBC’s Washington correspondent Alex Panetta breaks down the latest development in this Twitter thread:

What they want changed is a tax credit that favours vehicle assembly in U.S. plants that use union labour, primarily in Michigan. That plan, they argue, violates international trade agreements and would have a devastating effect on jobs in the auto sector in Canada and elsewhere.

They were especially hoping that Manchin might step in to insist on a change. It now sounds like what he’s done instead is threaten his party’s entire legislative agenda.

A key holdout

Many Democrats feel passage of the bill is essential to the party’s chances of maintaining control of Congress in next year’s elections.

The exchange marked the first sharp public break between the White House and a senator who many top allies of Biden privately regard as damaging the Democratic president’s political future.

The White House had hoped to keep negotiations cordial and private in the hope of avoiding alienating the critical ally. Sunday’s shift — a public rebuke of Manchin that revealed details of private talks — suggested a new phase in Biden’s push for legislation he regards as essential to his legacy.

The West Virginia senator’s comments drew outrage from liberal Democrats and Sen. Bernie Sanders, a democratic socialist who helped shape the bill and called for a vote to be held on the measure despite Manchin’s opposition.

WATCH | Electric vehicle tax credit jeopardizes USMCA, says ex-ambassador: 

Former U.S. ambassador to Canada says electric vehicle tax credit jeopardizes USMCA

Former U.S. ambassador to Canada Kelly Craft says President Biden’s proposed tax credit for electric cars made in America jeopardizes the new USMCA trade agreement. 13:05

Manchin has been a key holdout on the White House’s “Build Back Better” plan, which aims to bolster the social safety net and fight climate change and is the cornerstone of Biden’s legislative agenda.

In a statement released after the Fox News Sunday interview, Manchin said that increasing the U.S. debt load would “drastically hinder” the country’s ability to respond to the coronavirus pandemic and geopolitical threats.

“My Democratic colleagues in Washington are determined to dramatically reshape our society in a way that leaves our country even more vulnerable to the threats we face,” he said in the statement.

“I cannot take that risk with a staggering debt of more than $29 trillion and inflation taxes that are real and harmful to every hard-working American at the gasoline pumps, grocery stores and utility bills with no end in sight.”

‘Nail in the coffin’

Manchin’s support is crucial in a chamber where the Democrats have the slimmest margin of control and Republicans are united in their opposition to the bill. Even if the West Virginia senator were somehow convinced to back the bill, the White House would still have to win over Sen. Kyrsten Sinema, another moderate Democrat who has not committed to supporting it.

Though talks with Manchin had been going poorly, Biden’s aides expressed confidence in recent days that they would eventually secure a deal.

The package would raise taxes on the wealthy and corporations to pay for a host of programs to thwart climate change, boost health-care subsidies and provide free child care.

Biden has argued that lowering such costs is critical at a time of rising inflation and as the economy recovers from the fallout of the coronavirus pandemic. Republicans say the proposed legislation would fuel inflation and hurt the economy.

U.S. annual inflation is running at more than double the Federal Reserve’s two per cent target.

Sanders calls for vote

Sanders, who is aligned with Democrats in the Senate, said in a CNN interview on Sunday he thinks there should still be a vote on the proposed legislation, despite Manchin’s opposition.

“I hope that we will bring a strong bill to the floor of the Senate as soon as we can and let Mr. Manchin explain to the people of West Virginia why he doesn’t have the guts to stand up to powerful special interests,” Sanders said.

Biden last month signed into law a $1-trillion US infrastructure bill designed to create jobs by dispersing money to state and local governments to fix crumbling bridges and roads and by expanding broadband internet access.

Liberal Democrats in Congress had urged coupling the Build Back Better legislation with the infrastructure bill in hopes of ensuring the passage of the former. U.S. House of Representatives Speaker Nancy Pelosi, a Democrat, in September led an effort to decouple the two bills.

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