Manchin Presses Granholm on Administration’s Botched Implementation of Inflation Reduction Act

Washington, DC – Today, the U.S. Senate Energy and Natural Resources Committee held a hearing to examine the President’s budget request for the U.S. Department of Energy (DOE) for fiscal year 2024. During the hearing, Senator Joe Manchin (D-WV), Chairman of the Committee, discussed the urgent need for comprehensive energy permitting reform, energy security, fiscal responsibility, and stressed to Secretary of Energy Jennifer Granholm the need to implement the Inflation Reduction Act (IRA) as Congress intended.

“As the superpower of the world, we are reliant on China, Russia, and other foreign adversaries for far too many of our energy needs—whether it be oil, solar wafers, nuclear fuel, or, increasingly, electric vehicles. These are all things we can and should be producing start to finish in North America or sourcing from our allies. In an effort to decarbonize we need to be honest about the dirty supply chain secrets that come with various energy resources and technologies, or we’re simply sacrificing security for climate goals.

“That is why we need the federal government to signal with both words and actions that the United States is prioritizing our energy security and reducing geopolitical risk. This means implementing the energy bills we’ve passed responsibly, lawfully, and consistent with Congressional direction and intent—not re-interpreting these laws to try to make them fit a climate-only agenda. It also means that we in Congress need to pass timely, predictable energy permitting reform. And at a fundamental level, it means spending within our means and taking responsible steps to reduce our national debt, which is one of the biggest threats to our national security,” said Chairman Manchin.

During the hearing, Chairman Manchin  expressed frustration about the Administration’s failure  to comply with the letter of the law in the IRA, which includes definitions that inform eligibility for the two parts of the tax credit —  the first if the critical minerals in the battery are extracted and processed in the U.S. or from reliable free trade agreement partners, and the second if the battery and its components are manufactured in North America.

“The EV tax credits for cars, my personal belief is we didn’t need any.  But with that being said, I said if we’re going to do it, let’s get something for it. And changing to electric [vehicles] when we had dependence on a foreign supply chain, mostly China — that doesn’t make any sense. So, we put this together saying $3,750 would come if you secured and sourced and do the processing in North America or countries with a free trade agreement. And then the other $3,750 would be for manufacturing the battery in North America. 

“One of the things I’m frustrated by is the classification of the manufacturing of certain foils, powders, and other components as processing instead of manufacturing. It can’t be one or the other depending on where you want to put it to get more product from other places, we want this done in America. We don’t want this overseas because then there’s no urgency for our manufacturing to ever do this,” said Chairman Manchin.

Later in the hearing, Chairman Manchin showed a chart with the  definition of battery components from the IRA, which makes clear it what should be covered by manufacturing, that DOE and Treasury had failed to use in the proposed consumer EV tax credit.  

“This is what we passed, this is the bill, and this is what you all broke the law by, by referring back to the bipartisan infrastructure bill. This is the IRA we passed, it tells you exactly what manufacturing credits are going to be and what they’re going to be based on. That’s all I’m saying, follow the law,” said Chairman Manchin.

“I am so upset about this because [the administration] is doing every they can to bust the budget, what we promised the American people that bill would cost,” continued Chairman Manchin. 

Following questions from Senator Martin Heinrich (D-NM), Chairman Manchin took a point of privilege to discuss the need to ensure that the Inflation Reduction Act does not exceed the Congressional Budget Office score.

“I agree with you I’m very proud of the IRA and what it is doing and what the intention of it was to do. What I’m not proud of is that we’re not staying in the guidelines of what the CBO score was. I’m trying to make sure that we don’t dupe or scam the American public thinking we passed one bill that costs this much, and it doubles up because of the liberalization of what they’re putting out much quicker, much faster and much longer. I am very proud of the results we’re getting, and with that we ought to live within it. That’s all I’ve said, just don’t bust it, don’t blow it wide open now, thinking it’s going to be debt financed, which is what we’ve done to the American public for far too long.” said Chairman Manchin.