Senator Joe Manchin (D-WV) was hailed as a hero by conservatives and moderates alike just a few weeks ago when he said he could not support a far-left piece of legislation that many claim will tax small businesses as well as the middle class. Last week, Manchin announced that he had changed his mind about the legislation. President Biden took to the media to discuss what has been dubbed the Inflation Reduction Act. Americans tweeted their displeasure with Manchin’s decision, while others praised the move.
Since that day, Manchin has been on at least five different networks since last Tuesday, when the announcement of a reconciliation bill was made. Pit stops for Manchin included Fox News Sunday with Bret Baier, CNN, and ABC News.
On Fox, Manchin discussed with Baier why he changed his mind. He said that negotiations had been ongoing since he announced he could not support Build Back Better legislation in late 2021. Manchin said the secrecy was so that he would “not have to go through the drama” that had followed his decision not to vote for Build Back Better, Joe Biden‘s signature piece of legislation.
Manchin told Baier that “he was wrong” about a previous spending bill, the American Rescue Plan, and that he “hoped he wasn’t wrong again.” Many economic experts say that the American Rescue Plan, which provided another round of stimulus checks to all Americans as well as created the child tax credit payout for those with children aged 17 and under (as long as they met certain income requirements).
Baier asked Manchin point-blank why he was supporting this legislation as well as “Why should Americans believe you now when you say this new bill will not exacerbate inflation?” Manchin said he would make sure that he did not repeat the mistake.
One point of contention has to do with the possibility that this will raise taxes, particularly for those who make a living with a successful small business. Manchin was adamant during his Fox News Sunday interview that this legislation only closes loopholes in the tax code rather than raising them.
The bill is also intended to hire more IRS employees, and some political pundits are chatting about the possibility this legislation also includes the mandate that banks must report transactions of $600 or more. Janet Yellen appeared on CNBC’s “Squawk Box,” where she defended the proposal by the Treasury Department. A former Kansas Federal Reserve president called the proposal a “massive invasion of privacy.” It is unclear whether the Treasury Department’s proposal will be a part of the Inflation Reduction Act.
Groups such as Americans for Tax Reform disagree with Manchin’s tax claim. The bill is slated to cost $433 billion.
The bill does have some positive points, such as allowing for Medicare to negotiate the prices of prescription drugs for seniors and a subsidy for those who make less than $300,000 annually to purchase an electric car.
At the same time, the bill will call for a fifteen percent corporate minimum tax for those companies worth more than $1 billion, “stepped-up” IRS tax enforcement, and the carried interest loophole. These proposals will around $500 billion; Manchin says this isn’t the same as raising taxes.
Manchin pointed out that the subsidy for those purchasing an electric car requires that the individual vehicle being purchased carries a battery that is made in American and not in China. Manchin pointed out this as one of the positives of the bill.
He also said that this bill does call for monies provided for the research and development of green energy, but that it also reduces the way permits for oil and gas businesses are handled.
Senate Majority Leader Chuck Schumer (D-NY) is hoping to pass the bill with a simple majority vote; however, there is one vote that hasn’t been secured for this measure – the yea vote of Senator Kyrsten Sinema, who has said she will not vote for a bill that would raise taxes during this time of scorching hot inflation.