Manchin Reconciliation Package Includes Policy He Once Called 'Ludicrous'

West Virginia senator's deal provides tens of billions of dollars in electric vehicle tax credits.

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August 1, 2022

Sen. Joe Manchin’s $485 billion budget reconciliation package includes a provision he once called "ludicrous" and counterproductive to fighting inflation, according to a Washington Free Beacon review of the bill.

The deal Manchin struck with Senate Democrats to fight inflation includes tens of billions of dollars worth of electric vehicle tax credits, a policy once considered a non-starter for Manchin. As recently as April, Democrats thought negotiations reached an impasse after he said electric tax credits "make no sense to me whatsoever."

"There's a waiting list for EVs right now with a fuel price at $4.00, but they still want us to throw $5,000 or $7,000 or a $12,000 credit to buy an electric vehicle," Manchin said on the Senate floor. "We can't produce enough product for the people that want it and we're still going to pay them to take it. It's absolutely ludicrous, in my mind."

Despite those words, the Inflation Reduction Act includes electric vehicle tax credits for up to $7,500 per vehicle. Those tax benefits apply to any family making up to $300,000 and can be used on any electric vehicle that costs up to $80,000.

The electric vehicle provision is the latest reversal for Manchin, who held up Democratic Party spending plans for more than a year over a litany of concerns that have been seemingly tossed aside. Last week, the bipartisan Joint Committee on Taxation concluded that the budget reconciliation package would raise taxes by billions on Americans making less than $200,000. Manchin previously said he would never support tax hikes during a recession, which the U.S. economy entered in July. Why Manchin caved on electric vehicle subsidies is unclear. Manchin said in March that he was "reluctant to go down the path of electric vehicles" over concerns about the ability for manufacturers to meet demand.

"I’m old enough to remember standing in line in 1974 trying to buy gas. I remember those days," he said. "I don’t want to have to be standing in line waiting for a battery for my vehicle, because we’re now dependent on a foreign supply chain, mostly China."

Republicans are unanimous in their opposition to the spending package. Senate Minority Leader Mitch McConnell blasted Manchin over hypocrisy last week and called the Inflation Reduction Act a "reckless taxing and spending spree that will delight the far left and hammer working families even harder."

"They want Americans to be faced with skyrocketing prices and higher taxes and fewer jobs, all at the same time," McConnell said. "Democrats have outlined a giant package of huge new job-killing tax hikes, Green New Deal craziness that will kill American energy."