The two-week scramble that saved Democrats’ climate agenda

At the center of the impasse was Sen. Joe Manchin III (D-W.Va.). A moderate swing vote and longtime budget hawk, Manchin had said the week before that he could support investments to tackle global warming, just not in the way Democrats had proposed them, and not while prices nationally were soaring. Instead, he wanted his party to wait — but Democratic leaders felt they were running out of time.

At the White House, President Biden already had issued an ultimatum, telling members of Congress he would fire off new executive orders if they did not pass a law. In the Capitol, meanwhile, Democrats began to confront Manchin directly: Sen. Thomas R. Carper (D-Del.), for one, approached him during a vote on the Senate floor, brandishing a list of recent deadly climate catastrophes that warranted Manchin’s attention.

Little did many Democrats know, however, Manchin was already back at the table — in another round of fierce discussions with Senate Majority Leader Charles E. Schumer (D-N.Y.). Soon, the steady mix of public pressure, private pleading and persistent negotiation would lead the two men to produce what once seemed unthinkable: a deal on the largest burst of climate-related spending in U.S. history that took nearly all of Washington by surprise.

The story of that breakthrough is one of intense talks and high emotions over a period of about two weeks, according to more than two dozen people familiar with the matter, many of whom spoke on the condition of anonymity to describe a process so secretive that few knew about it at the time. The journey spanned basement backrooms of the Capitol, countless hours of phone calls — and a virtual handshake that clinched the arrangement over Zoom, since the coronavirus had trapped Manchin at home.

For Schumer, the party’s chief negotiator, a key to assuaging Manchin’s concerns were policy sweeteners that boosted fossil fuels and coal-heavy West Virginia. But Manchin also spoke with a wide array of others — fellow Democrats, economists including Larry Summers, even executives like Bill Gates. They each delivered some version of the same message: If Democrats did not seize on a rare opportunity to combat climate change, the U.S. may never have another chance at it again.

Republicans, who opposed spending to address global warming, initially thought they had scored a political victory: Last weekend, a group that included conservatives, industry officials and a top outside adviser to President Donald Trump even held a call with Manchin, during which several praised him for scuttling the package.

Ultimately, though, Manchin came to agree with his own party, satisfied that Democrats’ plans would not harm the economy. Explaining his decision, Manchin maintained at a news conference Thursday he never actually wavered in his engagement, even once “the dogs came after me.” Schumer, for his part, seized on the magnitude of the moment, having finalized an agreement that had eluded Democrats for about a year.

“You’re going to change the country for the better,” he told Manchin in the hours before they released the bill late Wednesday afternoon. “This is going to be historic for the country.”

Manchin and Schumer each declined interviews through their spokespeople. Senate Democrats hope to begin debating the bill as soon as next week.

If it is adopted, the so-called Inflation Reduction Act of 2022 would see nearly $370 billion in new climate and energy-related investments, aiming to foster new technology, cut back on emissions and satisfy Manchin’s demand that the U.S. maintain support for fossil fuels.

It includes new and extended tax credits for solar, wind and other renewable energy, and more than $80 billion in rebates for home improvements and electric vehicles. It also sets aside $1.5 billion to curtail harmful methane emissions. And at Manchin’s insistence, it mandates new oil and gas leasing in the Gulf of Mexico and off the coast of Alaska.

How the Schumer-Manchin climate bill might impact you and change U.S.

The bill’s authors say it will reduce emissions by 40 percent by 2030. That’s less than Democrats sought last year, when the House adopted roughly $555 billion in climate-related spending as part of the plan known as the Build Back Better Act. That proposal, named after Biden’s campaign slogan, proposed major overhauls to federal health care, immigration, education and tax laws. But Manchin in December essentially killed the bill, saying he could not cast his must-have vote for its roughly $2 trillion price tag.

More than seven months later, Schumer and Manchin had resumed talks, but found themselves barreling toward the same disappointment — even as Democrats attempted to rethink their agenda in a smaller form. Despite consistent, productive discussions, Manchin informed Schumer on July 14 that he still could not support his own party’s efforts to advance a sprawling proposal so quickly.

For Manchin, the primary concern was inflation. He withdrew his support after a government report showed the prices of gas, groceries and other goods had spiked by 9.1 percent in June, describing the development publicly as a “serious concern.” Privately, the senator sounded even more dire alarms — telling a group of energy executives and other supporters at a Washington fundraiser, for example, that he could not support anything that worsened the economy.

In particular, Manchin took issue with the tax increases Democrats had proposed to pay for their new spending, including the investments on climate. While the senator himself had endorsed some of the revenue-raising ideas, including one proposal to raise more money and improve the solvency of Medicare, Manchin said the sum total of tax hikes threatened to exacerbate inflation.

“Can’t we wait to make sure we do nothing to add to that? And I can’t make that decision on basically taxes of any type and also on energy and climate,” Manchin said during an interview on MetroNews TalkLine, a West Virginia radio show, a day later. “But I’m not going to do something, and overreach, that causes more problems.”

Manchin’s stance stunned Democrats. For weeks, many thought they were close to finishing a climate deal; aides on the Senate’s top environment-focused committee, led by Carper, had even started drafting press materials announcing a breakthrough with Manchin when the news arrived.

But the senator’s sudden skepticism posed a new, insurmountable challenge, since no bill could advance over GOP objections in the narrowly divided Senate without Manchin’s vote. Instead, he essentially offered his party a choice: They could wait for the release of new inflation numbers in August and try again, or they could further whittle down their bill to focus exclusively on health care costs and adopt it now.

Democrats did not want to squander their final opportunity to fulfill the pledges they had made to voters ahead of the 2022 election, so Schumer began work on a smaller measure — one focused on lowering prescription drug prices and insurance premiums. Biden endorsed the approach in a statement on July 15 that omitted any mention of Manchin, stressing: “The Senate should move forward, pass it before the August recess, and get it to my desk so I can sign it.”

But some in the party, long frustrated by inaction on climate change, embarked on a pressure campaign targeting Manchin anyway. A wide array of Democrats including Sens. Carper and Christopher A. Coons of Delaware, Edward J. Markey of Massachusetts, John Hickenlooper of Colorado, Tina Smith of Minnesota, and Ron Wyden of Oregon each worked with their aides to canvass environmental groups, energy companies and economists who might have be able to change Manchin’s mind.

Some Democrats enlisted the likes of Summers, a former treasury secretary who had been warning about inflation for a year, to make the case to Manchin that climate spending would not imperil the economy. Others targeted Gates, the former Microsoft chief executive who has a number of clean-energy investments. He eventually rang the West Virginia senator to make the case for climate investments; his office declined to comment.

Hickenlooper, meanwhile, turned to top executives from PG&E, DuPont and other firms. “They were kind of mopey,” the senator recalled in an interview, though he urged them to call Schumer and Manchin and encourage them to keep pursuing a deal. “You can sit on your hands, or be useful,” Hickenlooper said.

A few tried more personal outreach. Only weeks earlier, Coons had huddled with Manchin on a trip to Brussels and Switzerland, discussing policy during hours of conversation. So Coons broached the topic of the fast-warming planet on Monday, July 18, making a direct plea to Manchin during a closed-door meeting in the Hart Senate Office Building.

“There are folks in our party who are saying all sorts of terrible things about you, who believe you were stringing us along for a year and that you were never going to come to a deal because of your state or because of your conflicts of interest,” a source recalled Coons saying. The comment appeared to reference long-standing concerns about Manchin’s ties to the coal…