What Does Senator Joe Manchin Believe He’s Getting?

Numerous news reports have emerged about the reforms to the energy infrastructure permitting process that Senator Joe Manchin has obtained as promises from President Joe Biden, Senator Chuck Schumer, and House Speaker Nancy Pelosi, in exchange for his support for the “Inflation Reduction Act.” That title sets a new standard for Beltway disinformation: Inflation is a monetary phenomenon, and the most that plausibly could be said is that the bill would not increase the deficit and thus the scope for debt monetization by the Fed. The bill ostensibly increases various taxes by $739 billion, authorizes new spending (oops, “investments”) of $433 billion, and so yields “deficit reduction” of $300+ billion. 

That these numbers as well as the prospect for “inflation reduction” are utter falsehoods is a given; and the same is true for the proposition that Congressmen and Senators will choose to raise taxes by more than they raise spending, systematically accepting an excess of the political pain of taxing over the political sunshine of spending. And so the budget numbers specified in the 725-page draft legislation are based upon an obvious deception: that the new spending somehow will not be renewed after an initial three-year period, an exercise in Congressional gameplaying that cannot possibly have escaped notice by Manchin.

So why has he signed on to this monstrosity? Back to the promises of energy infrastructure permitting reforms: It is clear that Manchin understands that his partners in legalized crime are not to be trusted. Last weekend he said that “potential ‘consequences’” would ensue were the Democratic leadership to renege on the deal. Because of the Senate requirements for legislation to be passed with only a simple majority, the permitting reforms are not included in the draft legislation. Instead, they are to be enacted as part of separate legislation later this year, subject to a filibuster and thus requiring 60 votes. The central reforms that Manchin claims are being promised are the following:

• A requirement that the President designate at least 25 “high-priority” energy infrastructure projects which then would enjoy prioritized permitting.
• Maximum two-year environmental reviews for “major” projects under the National Environmental Policy Act, and one year for “lower-impact” projects, with a lead federal agency coordinating the interagency reviews.
• A reduction in litigation delays, in particular by setting a statute of limitations for court challenges to proposed projects.
• An “improve[ment]” in application of the Clean Water Act to infrastructure projects “by incorporating improvements from both the Trump and Biden administrations,” in particular by imposing a one-year time limit within which certification requests be granted, granted with conditions, denied, or waived.
• An increase in federal government permitting authority for interstate electric transmission lines.
• A requirement that the relevant federal agencies take the actions necessary to finalize construction and operation of the Mountain Valley Pipeline, with any new litigation shifted to the DC Circuit Court of Appeals from the Fourth Circuit.

Where to begin? Precisely what kinds of projects does Manchin believe that Mr.

Biden would designate as “high-priority?” Fossil fuel infrastructure? Coal projects in West Virginia? That Manchin obviously has endorsed prioritized permitting for green pork — hugely wasteful and environmentally destructive — does not bode well for the net outcomes of his claims of promised permitting reforms. 

The time limits on NEPA reviews do nothing to reform the inherent perversities of NEPA, and do nothing to limit the litigation game pursued by the ideological opponents of fossil fuels. The claimed statute of limitations on court challenges would merely shift the litigation process forward in time; it does not reduce the scope for such litigation to delay and constrain investment, nor does it change the inherent biases of NEPA or of the selection of projects for legal attack by the environmental left. The time limits on environmental reviews and the litigation process do nothing, literally, to facilitate the investment process for conventional energy, notwithstanding Manchin’s claims to the contrary. And notice that Manchin’s “reforms” do not address the efforts by banking and other regulators to use extralegal tools to constrain capital access for investment in conventional energy.

Because the Trump and Biden regulatory changes to implementation of various provisions of the Clean Water Act are diametrically opposed — why else would the Biden administration have issued a new rule in place of the Trump rule? — the claimed incorporation of the best of both worlds is laughable. But as not as much so as the one-year time limit for action on certification requests. No problem: The bureaucracy will be happy to issue denials within one year, or to threaten such denials unless the applicants waive the time limits. The increase in permitting authority for long-distance transmission systems is a sop to the wind and solar power lobbies; it has nothing to do with the conventional energy that Manchin claims to be championing.

Finally, there is the ostensible requirement that Mountain Valley — Manchin really does care about this, as it is a West Virginia project — finally be allowed to move forward. Really? How does this requirement imposed upon the federal bureaucracy reduce the litigation threat? If anything, it would lead the bureaucracies to insert poison pills into the permits, leading the courts to invalidate them. And does Manchin actually believe that the DC Circuit will prove more favorable toward Mountain Valley than the Fourth Circuit (Maryland, Virginia, West Virginia, North Carolina, and South Carolina)? Seriously?

Note that Manchin’s “deal” endorses increased taxation that would reduce productive activity, and the numerous subsidies and favoritism for specific interest groups — organized labor and the “green” lobby in particular — would yield massive resource waste. The result would be a reduction in the aggregate size of the economic pie, and therefore, conceptually, a one-time jump in the price level. That is not the same as an increase in “inflation,” an increase in the rate at which the aggregate price level rises over time. But does this matter?

Manchin may not understand such subtleties, but it cannot be the case that he is oblivious to the waste and wreckage wrought by ever-greater expansion of the federal government. Accordingly, it is clear that he is averting his eyes from reality, notwithstanding his earlier stance that taxes ought not be raised during a period of increasing economic weakness, and that spending ought not be increased during a period of heightened inflationary pressures. And then there is the argument that the deal would reduce greenhouse gas emissions by around 40 percent (below 2005 levels) by 2030. Does Manchin understand that the global temperature effect by 2100 would be 0.055 degrees C, — an effect that would not be detectable — using the EPA climate model? 

Who knows? But Manchin’s “deal” is a farce, and it is obvious that he must know that. Ignore his claims of centrism, realism, and a championing of the interests of ordinary working people. This “deal” demonstrates that he is part of the Beltway swamp.