Never doubt the power of The Swamp.
But on July 27, Manchin switched his position and agreed with Senate Majority Leader Chuck Schumer (D-N.Y.) to a deal that has been dubiously dubbed the “Inflation Reduction Act of 2022.”
The Manchin–Schumer deal shows, yet again, that the Washington Favor Factory never sleeps. The 700-plus-page bill is filled with outrageously expensive subsidies for the solar and wind sectors and lavishes lollipops on nearly every energy-related special interest in Washington. The legislation is so broad and has so much corporate welfare that it’s been endorsed by—get this—ExxonMobil and the Natural Resources Defense Council.
Exxon is cheering the provisions that could expand domestic drilling. The NRDC is cheering because the bill includes tax credits for a myriad of alt-energy programs, including, of course, more tax credits for wind and solar.
The energy-related parts of the bill are expected to cost $369 billion. That’s an increase of more than 20 percent over the cost estimates published just a few weeks earlier. (Talk about inflation!) And while the cost has been pegged at $369 billion, the final invoice for all of the measures in the bill could be far higher. That brings me to my first point: the bill reveals (again) how perverted the parliamentary process in Congress has become.
Nor any debate about another extension of the production tax credit (PTC), the subsidy used by the wind industry. The PTC, which is the second-most-expensive energy-related provision in the federal tax code, expired at the beginning of this year. It was designed as a “temporary” subsidy but it’s been extended 13 times, and has become the main financial incentive that’s driving the growing land-use conflicts between the wind industry and towns and counties all across the country. Despite these conflicts, as Shellenberger notes, the subsidy for wind energy could, if certain conditions are met regarding domestically produced content, rise to 3.1 cents per kilowatt-hour from the current 2.6 cents per kilowatt-hour.
These subsidies for solar and wind are blatant examples of corporate welfare being handed out in the name of climate change. Despite staggering costs—and the deleterious impact that the wind and solar subsidies are having on the integrity of the electric grid—these handouts aren’t being debated. Indeed, the total cost and potential impact of the legislation are hardly mentioned by big media outlets, perhaps because the language in the bill is so convoluted it takes an expert to understand what the legislation will do.
That’s what the Inflation Reduction Act of 2022 is: a pork-filled cluster. Manchin and Schumer have delivered for the NGO-corporate-congressional-climate complex which wants more spending on weather-dependent renewables despite the ongoing energy crisis in Europe, where countries such as Germany, Italy, Holland, and others are rushing to purchase and burn as much coal as they possibly can.
Oh, and by the way, the Newcastle coal benchmark now stands over $400 per ton. Nineteen months ago, it was selling for $50 per ton.
Put another way, cutting that much emissions would require cutting domestic oil use by more than half. (Last year, oil-related emissions totaled 2.2 billion tons.) Call me a skeptic, but that will not happen.
In short, this deal may be a long way from becoming law. But whether it becomes law or not, it shows again that the Washington Swamp will always deliver to special interests.