Baltimore Sun

Manchin made his big bargain

- By George Liebmann George Liebmann is president of the Library Company of the Baltimore Bar and the author of numerous works on law and history, most recently “Vox Clamantis In Deserto: An Iconoclast Looks At Four Failed Administra­tions.”

From the beginning of discussion of the Biden administra­tion’s Build Back Better proposal, I forecast that the time would come when Sen. Joe Manchin of West Virginia would be “bought off ” by the Biden administra­tion with the provisions of benefits to his state.

Mr. Manchin held out for longer than expected, and drove a harder bargain than expected — to the nation’s benefit. Along the way, he successful­ly torpedoed grandiose plans for the nationaliz­ation of day care, elder care, preschool classes and the dental profession, as well as assorted gifts to the teachers’ and constructi­on unions and other Democratic interest groups. A plan that would have increased coming deficits by several trillion dollars has been transforme­d into a bill of about one-fifth the original size, which will actually reduce deficits, though not until 2024.

Any measure that relieves the Federal Reserve Board from sole responsibi­lity for combating inflation is to be welcomed, lest the burden fall disproport­ionately on the constructi­on industry and real estate values, re-creating the “stagflatio­n” of the 1970s. The bill does not do much to relieve pressure on interest rates, but it does do something. Even its delayed effect in this respect is not too deplorable; expectatio­ns of the future feed into the present. The minimum corporate tax, increased IRS appropriat­ions, and constricti­on but not eliminatio­n of the “carried interest” exemption are to be welcomed as steps toward a fairer tax system, notwithsta­nding the wails and lamentatio­ns from the Club for Growth and the Wall Street Journal, who never find a tax increase that is worthy of support.

Were I a congressma­n, I would hold my nose and vote for the bill, and would forever thereafter be stigmatize­d as a traitor, a RINO or worse.

Yet Mr. Manchin’s bargain is regrettabl­e on two counts. The first is in the outrageous continued subsidies and tax credits for the electric car industry. Even Elon Musk, whose fortune is due to these subsidies, has recognized that “startup” subsidies are no longer needed. Mr. Manchin welcomes them because he realizes, as the climate change hysterics in large-cities do not, that electric car enthusiast­s do not dwell in the sunny, windy and sparsely populated spaces of “flyover country,” but in large Eastern and Midwestern cities whose utility plants still use coal as their marginal fuel to cover higher electricit­y demands. In 30% to 40% of the country, including the populous mid-Atlantic states, each new electric car means decreased demand for gasoline and increased demand for West Virginia coal.

Mr. Manchin’s pork-barreling is not as egregious as the fish hatcheries and roads to nowhere favored by his predecesso­r, Sen. Robert Byrd. But it has unfortunat­e budget and environmen­tal effects nonetheles­s.

The second cause for regret is that Mr. Manchin’s spending programs replace and are at the cost of some of the worthier items in Mr. Biden’s original proposals. These included proposals for a Climate Corps along the lines of the New Deal’s highly successful Civilian Conservati­on Corps. If modified to enhance the Army’s role in training, as with its ancestor organized by General George Marshall, this would have provided an alternativ­e for youth, while providing for needed soil conservati­on, flood control and reforestat­ion projects. It has been estimated that 40% of the nation’s Paris Treaty objectives can be achieved through reforestat­ion. But the planting of trees, unlike the manufactur­e of electric cars, has no friends on K Street, the source of all Democratic omnibus bills. The bill does provide a billion dollars, a drop in the bucket, for urban forestatio­n.

The family tax credit, fostered in recent years by an unusual cast of characters — including Newt Gingrich, Bernie Sanders, Ivanka Trump and Mike Lee — also has disappeare­d from the reconcilia­tion legislatio­n, though it would have benefited the child victims from the upsurge in births out of wedlock, the product of the liberaliza­tion of sexual mores. Sen. Lee of Utah sensibly proposed that its expansion be modified by including a part-time work requiremen­t so as not to re-create the perverse incentives of the former Aid to Families with Dependent Children program, but instead it has fallen completely by the wayside.

Also discarded is Congressma­n James Clyburn’s effort to extend the drug treatment programs of the recent Medicaid expansion to opt-out states in the Deep South much in need of it. Instead, the Manchin bill perpetuate­s the widely dispersed Obamacare subsidies, a consumer crowd pleaser that does much for the health care profession­s and little for public health.

But one cannot have everything. “In the Kingdom of the Blind, the one-eyed man is King.” That, for the moment, is Mr. Manchin, without whom there would have been no revenue measures at all, and no deficit reduction once the Republican­s regain Congress.

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