Manchin Threatens to Sue Biden Admin If It Alters Electric Vehicle Credit System

Manchin Threatens to Sue Biden Admin If It Alters Electric Vehicle Credit System
Sen. Joe Manchin (D-W. Va.) on Capitol Hill in Washington on May 4, 2022. (Nicholas Kamm/AFP via Getty Images)
Ryan Morgan

Sen. Joe Manchin (D-W.Va.) is threatening to sue President Joe Biden’s administration if the Treasury Department moves to expand the electric vehicle tax credit system beyond the limits he agreed to when he agreed to support Biden’s Inflation Reduction Act (IRA) legislation last year.

On Wednesday, Manchin published an op-ed in the Wall Street Journal, asserting that while he and Biden agreed to certain objectives when he agreed to vote for the IRA, executive branch officials are now working to redefine legal terms to favor renewable energy systems while ignoring provisions of the law meant to expand fossil fuel production.

“Specifically, they are ignoring the law’s intent to support and expand fossil energy and are redefining ‘domestic energy’ to increase clean-energy spending to potentially deficit-breaking levels,” Manchin wrote. “The administration is attempting at every turn to implement the bill it wanted, not the bill Congress actually passed.”

The IRA was passed on a party-line vote with Vice President Kamala Harris breaking a 50–50 tie in the Senate. The bill passed with the support of all Democrats but one in the House.
The legislation included up to $7,500 in tax credits for electric vehicles, if the minerals for their batteries are refined or processed in the United States or in countries that have a free trade agreement with the United States and the vehicle undergoes final assembly in North America.
Even before the IRA passed, some auto industry officials believed the supply chain provisions would disqualify a large number of vehicle models. John Bozzella, president and CEO of the Alliance for Automotive Innovation, told The Hill that “a likely result of this bill (as currently constructed) is that a significant number of consumers will not be able to take advantage of this credit in the early years when it is needed the most.”
Rather than implementing the supply chain stipulations in the IRA, the Treasury Department announced (pdf) in December that it would delay the implementation of the supply chain provisions and prepare new guidance for calculating electric vehicle tax credits by the end of March. It remains to be seen how the Treasury Department guidance will impact the electric vehicle market.
In comments to reporters on Wednesday, Manchin said if the Treasury Department guidance “goes off the rails” and violates the intent of the climate legislation approved in August, “I will do whatever I can—if that means going to court and I can do it, I'd do it.”

Biden White House Says Relationship With Manchin Remains Respectful

Despite Manchin’s stated misgivings about the implementation of part of the IRA, the Biden administration said on Thursday that it continues to have a “respectful” working relationship with the centrist Democrat senator.
“We have a respectful, a productive relationship with Senator Joe Manchin, and we are very proud of the Inflation Reduction Act and our shared goals and values that the President signed into law, as you know, this past summer,” White House press secretary Karine Jean-Pierre said Thursday.

“We’re going to continue to work with Senator Manchin on those shared priorities and values,” she added.

In his Wall Street Journal op-ed, Manchin called on Biden to “instruct his administration to implement the Inflation Reduction Act as written and stop redefining its credits and other subsidies.”

Manchin also tied the electric vehicle tax credit issue to ongoing U.S. debt limit negotiations and said Biden should “sit down with fiscally minded Republicans and Democrats to negotiate common-sense reforms to out-of-control fiscal policy.”

Reuters contributed to this article.