Biden Climate Bill is About More than Climate: It Taxes the Rich & Large Corporations, Allows Medicare to Negotiate Drug Prices & More

Today we summarize the deal brokered with Sen. Joe Manchin and nine other Democrats. The new Inflation Reduction Act is VERY far from perfect — there is much to like but as our analysis reveals there is as much to revile. We also offer links and commentary on an important report on emerging White Christian Nationalism, and an interesting analysis of how the fracking industry, even with almost limitless capital, has lost tens of billions of dollars a year for over a decade.

Christian Nationalism. CNN’s “An Imposter Christianity is Threatening American Democracy” provides a thorough discussion of the threat posed by right-wing fundamentalist Christian nationalists: who they are, what they believe, their vision for America, and how this vision threatens what remains of a very fragile democracy. A worthwhile read.

A few weeks ago I finished Jon Krakauer’s gripping book, Under the Banner of Heaven, which focuses on fundamentalist Mormonism and how its followers are held in the sway of certainty that they are doing God’s will, sometimes committing unspeakable acts of violence with no compunction.   Look at the photo at left, the man raising the Bible in one hand, the American flag in the other. He was in the Capitol on Jan. 6, motivated by misguided love of God and country, but certain nonetheless in his beliefs and actions. How do you discuss issues with a person operating with such unwavering certainty?

We hope you’ll read “An Imposter Christianity is Threatening American Democracy” to learn more about this threat to our democracy.

Fracking. A Lesson from Decades of Misplaced Resources. From the NYT’s “Hardly Anyone Talks About How Fracking Was an Extraordinary Boondoggle”:

Today, with profits aided by the energy price spikes of the last year, the fracking industry is finally, at least for the time being, profitable. But from 2010 to 2020, U.S. shale lost $300 billion. Previously, from 2002 to 2012, Chesapeake, the industry leader, didn’t report positive cash flow once, ending that period with total losses of some $30 billion, as Bethany McLean documents in her 2018 book, “Saudi America,” the single best and most thorough account of the fracking boom up to that point. Between mid-2012 and mid-2017, the 60 biggest fracking companies were losing an average of $9 billion each quarter. From 2006 to 2014, fracking companies lost $80 billion; in 2014, with oil at $100 a barrel, a level that seemed to promise a great cash-out, they lost $20 billion.

NYT’s “Hardly Anyone Talks About How Fracking Was an Extraordinary Boondoggle”

The NYT’s describes how decades of mostly private capital and favorable federal regulation has propped up the fracking industry and that despite that support it has lost billions of dollars, year after year for nearly two decades. They also point out how disingenuous the gas & oil industry’s attacks on renewable energy are for being too expensive and economically unviable.

Fracking was nothing less than a genuine energy transition, enacted quite rapidly and at enormous upfront expense with only speculative paths to real profit, requiring large-scale infrastructure build-outs against some cultural and political resistance and yet celebrated all the while as a product of irrepressible capitalism, the almost inevitable result of the never-ending appetite Americans have for cheap energy. And yet for a decade, as fracking boomed, Americans were told again and again — and not just by climate deniers — that rushing a green transition would be too expensive.

Clean energy has found its footing anyway, but renewables still account for only 12 percent of energy consumption in the United States, compared with 32 percent for natural gas and 36 percent for petroleum. Imagine what those figures might look like if there had been a decade of strategic subsidy and directed regulatory support [for renewables]…

The contrast raises a basic question: What does it mean to call one form of energy “expensive” or to say that transitioning to another would “cost too much”? Put another way: Why did the country decide it was OK to lose money on one kind of energy but anathema to lose it on another?

NYT’s “Hardly Anyone Talks About How Fracking Was an Extraordinary Boondoggle”

So here we are in 2022, with renewables cheaper by the day, far cheaper than gas and oil-based energy, and despite escalating threats from Mother Nature with scalding temperatures, devastating floods, and inflamed forests, we persist in investing in fossil fuels. See below.

Joe Manchen Extracts Huge Concessions

Today we focus on what remains of President Biden’s climate legislation, the newly named Inflation Reduction Act. The price tag for climate investments, whittled down by Sen. Joe Manchin, now stands at $385 billion, so a far cry from the original $3 trillion price tag. As described below, there is much to like in this legislation. From Inside Climate News, “Senate Democrats Produce a Far-Reaching Climate Bill, But the Price of Compromise with Joe Manchin is Years More Drilling for Oil and Gas“:

“If enacted, the legislation released Wednesday night in a surprise agreement between Sen. Joe Manchin III (D-W.Va.) and Senate Majority Leader Charles E. Schumer (D-N.Y.) would represent one of the most consequential pieces of economic policy in recent U.S. history — though still far smaller than the $3 trillion the Biden administration initially sought.The nonpartisan Committee for a Responsible Federal Budget estimates that the bill would put about $385 billion into combating climate change and bolstering U.S. energy production through changes that would encourage nearly the whole economy to cut carbon emissions. With the planet rapidly warming, Schumer and Manchin say the bill would reduce carbon emissions by roughly 40 percent by 2030, close to President Biden’s goal of cutting U.S. emissions by at least 50 to 52 percent below 2005 levels by 2030. Manchin also emphasized that it would spur American energy independence more broadly, including by encouraging natural gas, as the war in Ukraine has exposed domestic reliance on petrostates’ fossil fuel production.

Inside Climate News, “Senate Democrats Produce a Far-Reaching Climate Bill, But the Price of Compromise with Joe Manchin is Years More Drilling for Oil and Gas”:

Among the other positive elements to the legislation, unrelated to climate:

  • Enabling Medicare to negotiate prescription drug prices, a change that could save consumers billions.

On health care, Democrats campaigned in 2020 on major changes, and this deal fulfills two major pledges: Allowing Medicare to negotiate the price of prescription drugs, and making health care more affordable for millions of Americans.

“This is the best development on health care for the American people in years,” Sara Lonardo, a spokeswoman for Families USA, a liberal consumer health lobby, said in a statement. “It’s crucial we get this deal locked down and passed as soon as possible. Once this bill is law, we will keep fighting to ensure the millions of Americans in the Medicaid coverage gap get the care they need to live their healthiest lives.”

Wasington Post: “How the Schumer-Manchin climate bill might impact you and change the U.S.”
  • Significant tax increases on mega corporations and the rich.

“This would certainly be the biggest corporate tax increase in decades,” said Steve Wamhoff, a tax expert at Institute on Taxation and Economic Policy, a left-leaning think tank. “We’ve had decades of tax policy benefiting the rich, but this is really the first attempt to raise revenue in a progressive way that would begin to combat wealth and income inequality.”

Washington Post: “How the Schumer-Manchin climate bill might impact you and change the U.S.”

Both of these bill components are most welcome, as are the positive elements directly related to climate:

  • $369.75 billion in tax incentives and other support for clean energy—by far, the biggest federal investment ever in addressing climate change.
  • Tax credits for renewable energy for the first time would be extended for 10 years, a major boost for the wind and solar industries, which have not had sufficient time to plan and develop large-scale projects when tax credits were only available for one- and two-year intervals.
  • The legislation also includes tax credits for an array of technologies that do not currently get any support, such as large, grid-scale power storage, and incentives for the manufacturing of solar panels, electric vehicles, and other hardware domestically.
  • The bill includes $9 billion in consumer home energy rebate programs, mostly focused on low-income consumers, to electrify home appliances and for energy efficient retrofits. 
  • The bill not only would expand the current $7,500 tax credits for consumers who purchase new electric vehicles, it would add a new $4,000 tax credit for purchasers of used EVs. 

As a result of these groundbreaking gains, some environmental groups, health advocates, and economic justice advocates are encouraging passage of the bill. Those supporting the bill have much to ignore. From Inside Climate News, “Senate Democrats Produce a Far-Reaching Climate Bill, But the Price of Compromise with Joe Manchin is Years More Drilling for Oil and Gas”:

The deal would prohibit the Interior Department from approving renewable energy development over a ten-year period unless it also opened lands to oil and gas development.

Onshore, the department would have to lease at least 2 million acres each year or half of what was requested by oil companies, whichever figure is smaller, in order to issue rights-of-way for wind or solar development. Offshore, it would need to lease at least 60 million acres for oil and gas development each year in order to open leasing for offshore wind development.

The legislation hikes tax incentives for expensive carbon capture technology 70 percent. It also requires that, for the next decade, the federal government offer tens of millions of acres offshore for oil and gas drilling as a prerequisite to the expansion of offshore wind energy development.

And Manchin said that he has obtained a commitment from Biden, Senate Majority Leader Chuck Schumer, and House Speaker Nancy Pelosi that they will advance separate legislation this fall that streamlines the permitting process for energy infrastructure, including pipelines and export facilities.

“It is truly all of the above, which means this bill does not arbitrarily shut off our abundant fossil fuels,” Manchin said in a statement.

Inside Climate News, “Senate Democrats Produce a Far-Reaching Climate Bill, But the Price of Compromise with Joe Manchin is Years More Drilling for Oil and Gas”:

Apparently, if we are to tap the massive wind generation potential in the Gulf of Mexico, the cost is to open it to drilling first. “It’s self-defeating to handcuff renewable energy development to massive new oil and gas extraction,” said Brett Hartl of the Center for Biological Diversity. “The new leasing required in this bill will fan the flames of the climate disasters torching our country, and it’s a slap in the face to the communities fighting to protect themselves from filthy fossil fuels.” So, while many health care and economic justice advocates, along with some enviro groups like the Natural Resources Defense Council, are gritting their teeth, averting their eyes, and supporting the legislation, the sentiment is not universal:

“Other environmental groups were drafting a letter urging the Senate to reject the compromises for fossil fuel development as incompatible with goals to eliminate greenhouse gases. “This is a climate suicide pact,” said Brett Hartl, government affairs director at the Center for Biological Diversity.

Inside Climate News, “Senate Democrats Produce a Far-Reaching Climate Bill, But the Price of Compromise with Joe Manchin is Years More Drilling for Oil and Gas”:

While the environmental community may be sending mixed messages, according to Washington News, some people have principles that they will not negotiate away:

“An autonomous Indigenous-led delegation of Black, Indigenous, people of the global majority and their allies have shut down the streets surrounding the Department of Interior Washington D.C early this morning painting CLIMATE EMERGENCY in front of the building. 

The group is demanding President Biden declare a climate emergency and stop approving fossil fuel projects, including leases, exports, plastic plants, and pipelines. Permitting new fossil fuel projects will further entrench us in a fossil fuel economy for decades to come — and encourage the continued violence and genocide the fossil fuel industry brings to Black, Indigenous and communities of the global majority.

Two provisions buried in the Inflation Reduction Act would require massive oil and gas leasing in the Gulf of Mexico and Alaska, reinstate an illegal 2021 Gulf lease sale and mandate that millions more acres of public lands be offered for leasing before any new solar or wind energy projects could be built on public lands or waters.

From Washington News: “Hanging from tipi poles, tribal leaders and allies block roads around the Home Office”

In closing, this is what entirely unprincipled legislation looks like, an amalgam of disparate ingredients, some extraordinarily beneficial and needed, mixed with entirely toxic elements. You wind up with sausage that may taste good going down, but will kill you in the end. That is exactly what we have here in the Inflation Reduction Act: sugar-coated death.

It is clear that to secure untainted legislation we need the power to elect a more principled Congress with a full commitment to social, economic AND climate justice. With such a Congress, we would have three separate bills here, one focused on health care, another on tax policy, and a third on climate. The climate bill would not be muddied with toxic fossil fuel giveaways. Instead, we’ve been offered long overdue corporate tax increases and the ability to negotiate drug prices, so many Dems will swallow the rest of the package whole. Without a more principled Congress we are left with toxic compromises and the only principled recourse being to paint signs on the Dept. of Interior.

If the survival of the entire planet were not at stake, compromise to achieve long-sought objectives would be acceptable. But that isn’t the world we live in, as Mother Nature (and our Indigenous allies) keep telling us. In this context, this compromise is both infuriating and insane. We have to do better and we should take our cues not from politicians, but from the principled groups who are not afraid to speak the truth: We have a climate emergency. We need to say that clearly and then begin to do what is required, not be duped by some hodgepodge, schizophrenic legislation.

Your thoughts?

In solidarity & hope,

Paul & Roxanne

Categories: Climate Justice, Uncategorized

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3 replies

  1. Although expanded leasing looks scary on paper, do energy companies really want to invest in infrastructure that’s going to be priced out of business by continuing efficiencies and cost savings in renewables? Another factor in this complex problem space is that the Dems need to show some legislative success ahead of the November midterms. If we lose both the House and the Senate, we’ll only have Biden’s veto to protect us for the next two years. And going into the 2024 election running on a message of “I vetoed a bunch of bad stuff” doesn’t sound very promising. Another 4 years of any GOP president will be a catastrophe.

  2. Manchin to the country, “See, I’m not villain. Now take these poison pills and like it.” Paul, your last paragraph sums it up. The good things in the bill are supposed to get us to projected positive climate goals. With all the continued support and giveaways to the fossil fuel industries, it’s hard to imagine how they can be realized. As usual, we are encouraged to happily take what we can get. It’s something but not what is needed.

  3. It’s the reality of this system. Rotten, but it’s what we have to deal with. No more pie in the sky.

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