He killed the Democrats’ bill because, he said, he was concerned about inflation. But the bill was anti-inflationary; what he really didn’t like was boosting green energy.

By Harold Meyerson, The American Prospect

Ostensibly, the reason Joe Manchin killed what remained of his own Democratic Party’s agenda was that it contributed to inflation.

In fact, it did nothing of the kind.

The three chief components of the bill that Manchin rejected were a tax hike directed at the rich and corporations, deficit reduction, and spending on energy, both green and otherwise. But the proposed tax hikes were actually anti-inflationary. In the current bout of inflation, it’s the wealthy who can and do continue to spend merrily along, and in some particularly inflationary markets, like housing, they play a major role in bidding up the costs. Moreover, the additional funds that these particular tax increases would bring into the government’s coffers would reduce the federal deficit, which is why the Committee for a Responsible Federal Budget released a statement today calling for tax increases.

Protesters at the Hart Senate Office Building carry signs calling for Sen. Manchin to support the full Build Back Better Bill.

Second, the bill that Manchin axed devoted, at his previous insistence, roughly half of those increased revenues explicitly to retiring a portion of the federal debt—again, in the assessment of the CRFB and the old-school conventional wisdom (which is the kind of wisdom to which Manchin subscribes), a sure-fire way to reduce inflation. In actuality, the relation between deficits and the debt and the current bout of inflation is shaky at best, but to the extent that we can plumb the Mind of Manchin, debt retirement is surely anti-inflationary.

Which brings us to the proposed bill’s third component that ended up on Manchin’s cutting room floor: spending to boost both fossil fuel (which, again, had been added at his insistence) and green energy initiatives. But how inflationary were those? Increasing drilling and, consequently, the supply of oil and gas is likely to bring down the price at the pump. Increasing the supply of sustainable energy isn’t likely to reduce costs in the short term, but in the long term, it’s a huge cost saver when balanced against the costs of dealing with the havoc that the climate crisis is causing both now and in the future.

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