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The Best of Democrats’ Bad Options?

Cutting the Build Back Better Act into “chunks” would be painful, but it may be the last chance in a long time to pass ambitious, enduring climate policy.

Chip Somodevilla/Getty Images

During his press conference last week, Joe Biden seemed confident about at least one part of his proposed Build Back Better bill: “I think it’s clear that we would be able to get support for the $500 billion plus for energy and the environment.” Democrats are divided on whether passing just that piece of it is possible, or a good idea.

“We don’t have another 10 years to wait,” Senator Edward Markey told The New York Times. “We should take what Joe Manchin said, take the climate and clean-energy provisions in the package that have been largely worked through and financed, and take any other provisions in any other part of Build Back Better that have the votes, and put them together as a package.” But other senators are loath to break up Build Back Better: Sherrod Brown vowed to “fight like hell” to save the expanded child tax credit, which does not have the votes (more on this below).

Trying to pass a climate-only reconciliation bill would be a huge gamble, one premised on the idea that Senator Joe Manchin dislikes poor people—who would be helped enormously by the original $2 trillion bill, less so by a standalone environmental “chunk” of it—more than the idea of making low-carbon technologies cheaper. If this is true, though, there’s a depressing case to be made for a climate package.

The Supreme Court will soon take up a case that could dismantle the Environmental Protection Agency’s ability to regulate carbon emissions, hamstringing the administration’s options regardless of what happens to Build Back Better. Given how Manchin has helped to winnow the bill’s climate provision, even its passage would necessitate further immediate action on climate change via executive authority. But there’s additional urgency now, given what the court’s conservative majority may do. A shrunken Build Back Better may be one of the few options left to pass long-lasting climate policy for a decade or longer, given the grim forecast for Democratic control of Congress in the coming years. If the votes are there, the argument goes, pass climate policy as soon as humanly possible.

This plan isn’t without serious, potentially devastating trade-offs. Thanks in part to the structure of Build Back Better’s climate provisions, which effectively incentivize companies and consumers to make lower-carbon investment decisions, they don’t pack the kind of built-in, easily recognizable deliverables for voters that more bread-and-butter welfare state provisions do. Prioritizing climate could well mean the end of the expanded child tax credit, which Biden signed into law in March but which expired at year’s end. (Build Back Better would reinstate the expansion, but Manchin has insisted on adding a work requirement.) Being able to take $7,500 off the cost of a new electric car or e-bike isn’t a great substitute for a transformative social policy that kept millions of children out of poverty, good as both are to have.

The American Recovery and Reinvestment Act, which President Obama signed into law in 2009, similarly encouraged private investment in green things. While much less than the clean energy spending in Build Back Better, the $90 billion allocated by the ARRA was a boon for clean energy entrepreneurs and climate action enthusiasts—and virtually incomprehensible to anyone else. The dramatic drop in wind and solar prices over the last decade has at least as much to do with China meeting the demands of the German energy transition as modest U.S. loan guarantees. The year after the ARRA passed, three out of four Americans believed the stimulus money had been wasted—a view nourished by the kind of bombastic right-wing messaging sure to come for Build Back Better’s green spending, too.

This comparison is even more bleak given the multiple interest-rate hikes the Federal Reserve is planning over the next few months. By raising the cost of borrowing, the hikes could depress investment and help wipe out the considerable jobs gains made thus far under Biden—just in time for voters to head to the polls in November’s midterm. It could create a situation not unlike the Obama administration’s turn toward austerity in 2010 that helped cost it the House that year. Given how reliant the Biden climate plan is on private investors being willing to play ball, raising interest rates could put a damper on sought-after clean energy spending that Team Biden is relying on to meet its climate goals.

There’s also the possibility that, should climate spending pass and Republicans return to power in Washington, they’ll just let much of that money—set to be spent over a decade—sit there. And Republicans have already been eager to kill off clean energy laws and incentives at the state level; getting rid of childcare benefits or universal pre-K once they’re up and running might prove harder. Depending on how much Manchin can extract from negotiations, a skinny Build Back Better might also help greenlight a new generation of fossil fuel–burning power plants, so long as they have dubiously effective carbon-capturing equipment slapped onto them. Thanks to Manchin, the bill won’t include penalties for continuing to run carbon-intensive power plants.

And this is an optimistic scenario. Manchin has a tendency to say he’ll support things he actually won’t. The day after Biden’s bullishness about breaking up Build Back Better, Manchin reportedly said he preferred “starting from scratch” and principally wanted to deal with inflation, Covid-19, and the national debt. Taking him at his word that he’s on board for more than $500 billion in climate spending could just drag the process out even longer, all as Biden’s poll numbers sink further. It’s just as likely that Manchin will be indifferent to passing any part of Build Back Better, content to extend his moment in the sun and keep collecting his yearly half-million in dividends off status quo energy policy—Democratic majorities be damned.

Maybe a bloodbath for House Democrats in this year’s elections is inevitable. Maybe whatever passes won’t make a difference for them either way. The case for jettisoning everything else in Build Back Better to pass climate spending through reconciliation is cynical but understandable. It also might not work.