Updated July 15, 2022 at 4:51 PM ET
President Joe Biden said on Friday that he will take executive action on climate change as talks among Senate Democrats on possible legislation faltered, and he encouraged them to pursue a smaller deal focused on health care, in part to lower health costs in the face of high inflation.
"I will not back down: the opportunity to create jobs and build a clean energy future is too important to relent," Biden said in a statement. "Health care is also critical... Families all over the nation will sleep easier if Congress takes this action. The Senate should move forward, pass it before the August recess, and get it to my desk so I can sign it."
Sen. Joe Manchin, D-W.Va., delivered a serious blow to ongoing Senate negotiations for a Democratic budget package, telling Majority Leader Chuck Schumer, D-N.Y., on Thursday that he will not support a bill that includes climate or tax provisions — leaving slimmed-down legislation focused on health care.
The West Virginia Democrat favors a bill that would lower prescription drug prices and extend for two years health insurance subsidies under the Affordable Care Act, which would prevent premium increases that many states are set to announce next month, according to a Democrat briefed on the conversation.
This could mean a standalone health care bill is within Democrats' reach. But this is far less than the $2 trillion package originally proposed, which would have added record funding to key areas of President Biden's domestic agenda, namely climate and social safety net programs.
No spending bill can advance without Manchin's support in the evenly divided Senate, and Schumer has been negotiating with the frequent holdout for weeks.
Manchin still open to a deal, but wants a check on spending amid high inflation
Manchin told Schumer he wanted to see the July inflation numbers before committing to a bigger package, he said on Friday.
If Schumer wanted to move forward immediately, Manchin told West Virginia radio host Hoppy Kercheval, a much slimmer bill on health care was his best option.
"He took that as 'no,' I guess," Manchin said.
Manchin also said he saw progress on the climate side of the talks, despite disagreements about the magnitude of fossil fuel cuts, and he wanted to look at passing a bill in September. He added he did not want to stop future negotiations.
"I would not put my staff through this — I would not put myself through this — if I wasn't sincere about trying to find a pathway forward to do something that's good for our country," he said.
Earlier this week, the conservative Democrat had expressed worries about increasing government spending, and putting more dollars into the economy, as the United States faces its worst inflation in decades.
"While Washington seems to now understand this reality, it is time for us to work together to get unnecessary spending under control, produce more energy at home and take more active and serious steps to address this record inflation that now poses a clear and present danger to our economy," he said in a statement on Wednesday, after the government's report for June consumer spending showed the highest inflation in 40 years.
"No matter what spending aspirations some in Congress may have, it is clear to anyone who visits a grocery store or a gas station that we cannot add any more fuel to this inflation fire."
Another obstacle to Biden's climate agenda
Biden has vowed to use the "whole of government" to combat climate change, aiming to halve greenhouse gas emissions from 2005 levels by 2030. That would be in line with what an international consortium of scientists say is necessary to fend off the worst impacts of climate change.
But the political divide in Congress has thrown up obstacles to achieving that aim, and the conservative-majority Supreme Court has made it harder for the Biden administration to tackle climate change on its own.
Since mid-2021, Senate Democrats and the Biden administration have repeatedly entered into negotiations with Manchin to advance action on climate change, only to have him shoot down the proposals.
Manchin's home state of West Virginia faces grave threats from floods supercharged by climate change. At the same time, it is a major producer of coal and natural gas. Manchin himself has personal financial ties to the coal industry, and he has gotten more campaign donations from the fossil fuel sector than any other senator.
Without Manchin's support, Congress is unlikely to fork over a substantial investment in climate policy before the midterm elections, when the balance of power is expected to tip to Republicans and put climate legislation off for several more years.
Massive spending on things like subsidizing renewable power generation and electric vehicles would have brought greenhouse gas reduction goals within reach, according to a 2021 analysis by the Rhodium Group.
"Absent new legislation, the renewable sector will not grow at the pace needed to address the climate imperative," said Gregory Wetstone, president and CEO of the American Council on Renewable Energy (ACORE), after news broke that Manchin was seeking to trim the spending bill.
While the federal government can still use regulations to reduce carbon pollution, a recent U.S. Supreme Court decision barred agencies from enacting particularly aggressive federal climate standards, further limiting the White House's options.
Sen. Ron Wyden, a top Democrat on environment and finance issues, expressed "disappointment" at the news that the climate portion of the package could be scrapped.
"We can't come back in another decade and forestall hundreds of billions — if not trillions — of economic damage and undo the inevitable toll," he said in a statement late Thursday night, when news of Manchin's change of heart was first reported by the Washington Post.
Democrats have been wrestling to get Manchin on board with their budget proposals since last fall. In December, he announced he would not vote for the $2 trillion proposal, which at the time was an already slimmed-down version from the original bill and included $555 billion in climate and energy spending.
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