[Congressional Record Volume 169, Number 200 (Tuesday, December 5, 2023)]
[Senate]
[Pages S5722-S5725]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Inflation Reduction Act
Mr. MANCHIN. Mr. President, I rise today, I can say, out of
frustration, out of anger, out of disappointment that our
administration is continuing to break the law that we all passed and
that President Biden signed, knowing full well what was in it. I am
talking about the Inflation Reduction Act, the IRA. The reason I am
saying this is because, in putting this bill together, at the time that
we did, I made sure that everyone involved had to sign off on it. The
President, the majority leader, and the Speaker knew exactly what was
in the bill and the purpose of the bill.
I still believe that the purpose of this bill was done in the right,
proper way. I think it was a transformative bill, if we could just stay
within the guidelines of how the bill was written. It is not left to
interpretation, but they have interpreted.
They are trying to, basically, implement a piece of legislation that
they couldn't get passed, and I have said this. The purpose of the bill
had three purposes. The first on the Inflation Reduction Act was to
reduce our debt. We all talked about that.
We have $33.8 trillion in debt today, and if everything that we do
does not take that into account and we do not think about our children
and grandchildren and future generations, what we are leaving them is
untenable. Something has to be done. So that piece of legislation had
debt reduction in it--debt reduction.
It is also based on securing our energy. When the Ukraine war broke
out, we were not energy secure. We couldn't help our allies over in
Europe, and basically energy was weaponized by Putin. He used it as a
weapon, which was very harmful to our allies. Basically, I said this:
If you can't help the people who are willing to fight and die for the
cause you believe in and we all believe in--the freedoms and democracy
that we cherish--then they are not going to be there when you do need
them.
The third thing was to bring manufacturing back to America, the
building blocks that we need. And transportation is a major building
block of how we deliver our goods, how we basically take care of our
lives, how we secure our own jobs, and how we are able to pay for our
own way through this wonderful world of ours, but it also runs our
economy.
And I still believe the intent and the ability of the IRA to work as
we hoped, the level of investment that we have been seeing from the IRA
is transformative. We have never seen this fight. People have been
predicting us to fall into a recession, if you will, with high
inflation, and we have been able to stave that off because we had this
piece of legislation that has given us kind of a shot in the arm that
nowhere else in the world has had.
But here is the problem we are running into. It really, truly seems
from my standpoint--because we in my Energy Committee wrote the bill,
unknown to most any American for over 3 months before it was
introduced, and it was done because of the war in Ukraine. It was done
because we were not secure.
Let me talk to you about transportation. They want to move to
electric vehicles sooner than what we are prepared to do. The building
blocks that you need is to basically have total, absolute self-reliance
on your transportation mode. Up until this piece of legislation or the
intent of the administration, we were able to take care of basically
our planes, trains, automobiles and everything in between. We could do
that with American ingenuity, manufactured in America or reliable
countries. We never had to rely on foreign supply chains that were
unreliable, such as China, such as Russia, such as Iran, such as North
Korea. But because of the political desires of trying to transform the
transportation mode that we weren't able to basically secure ourselves,
this is what is happening.
If President Biden were still a Member of this body and if he were
Senator Biden, I guarantee you, he would be absolutely incensed at what
is happening, in any administration, with a piece of legislation that
he worked so hard on, that he basically cosigned or signed off on as
something he believed in, watching it be completely shredded. And that
is what is happening.
Since the administration seems to have forgotten, I am going to
remind everyone what we agreed to. This was on a phone call that I had
with the President, with the Speaker, and with the majority leader at
the time before the bill was signed.
I said this is a $687 billion bill--$687 billion in revenue--and $384
billion of that bill would be invested in energy security while also
improving our environment--energy security. That means we would be
producing more energy and be more self-secured than at any time. And
right now I can say that it has worked absolutely the way it was
intended to. We are producing more energy in this country today than
ever before. We are producing more oil and gas, and we are doing it
cleaner than anywhere else in the world. And we are producing LNG to
help our foreign allies. So we are doing exactly what we intended to do
with this piece of legislation. That was $384 billion.
[[Page S5723]]
Another $64 billion went toward healthcare. We put a $35 cap on
insulin; we are allowing Medicare to negotiate; and we have an
extension of lower prices with healthcare.
With the balance--you have never heard this--we have paid down $239
billion in debt. Now, everything I just told you, you very seldom ever
hear from the administration or really from the President himself,
speaking about what this bill, all included, does. You don't hear him
speaking about we paid down $237 billion, in the most trying times that
we have had, the most deficit that we have ever carried before. We
should be proud of that; that for the first time since 1997, we have a
piece that was directed--almost one-third of that bill--to pay down
debt for our future generations. The IRA did that. You have never heard
it mentioned.
Also, what the IRA did and what we intended for it to do was
basically give us the energy that we need today, making sure we are
producing the fossil fuel in the best, cleanest fashion, using all the
modern technology. And I have always said this: You cannot eliminate
your way to a cleaner environment. I know my environmental friends on
the far left are thinking, Please, don't drill anymore--no more oil, no
more gas, no more coal. Well, that is not how the world works. It is
called global climate, and you can innovate through technology, but you
are not just going to tell people to eliminate something. That is what
this bill does. We are producing more energy than ever before, and we
are doing it cleaner and with more technology. So we are producing the
energy that we have to have to be energy-secure today while we are
investing in the energy that we would like to have carbon-free in the
future. We are doing both. That is what is creating all of this
excitement and investment from around the world.
Also, the purpose was to bring manufacturing back to the United
States, to secure the manufacturing that we need that we allowed to
leave 30 years or more ago and to bring it back home. Now they are
trying to change that to meet the radical climate change that basically
is going to harm the country and still be able to help countries that
we know are unreliable.
This becomes more and more obvious to me every day. It is frustrating
to read the law and know that they are knowingly violating it. That is
what they are doing. I would hope that the President of the United
States, if he is watching or listening to me--bring your team in and
ask them how they can basically neglect the way the bill was written
and the numbers that we put in the bill and the definitions we put in
the bill of what was going to be not left to interpretation and how it
goes to different Agencies, whether it be DOE and back up to Treasury,
to basically find ways that they can maneuver and work around this.
Transportation is fundamental to our economy. Think about this. I
have been sitting here long enough and listening and watching different
proposals. At one time, $60, $70, $80 billion was going to be
recommended, and we were going to build charging stations around the
country. I said: Let me make sure I understand how history works. I
said: I remember reading the history books on when the Model T was
basically brought onto a mass assembly line, that the average person
could own, and they were going to build cars for the American family. I
don't remember the Federal Government stepping up and building filling
stations.
This is a capitalist society we live in. The market meets the
demands. It always has and always will. But this administration was
concerned that the market wouldn't meet it, so we had to throw Federal
dollars at it, which I was totally opposed to. We have cut that down
drastically because the market has always met the demands of a
capitalist society. That is what we believe in. You either believe in
it or you don't.
That was done, and I couldn't believe that, and I said: I don't
remember us building any filling stations. But, again, I don't remember
basically, during the greatest Depression the world has ever seen--the
1930s--that FDR ever sent a check to anybody. My grandparents never
received any checks. My grandfather received an opportunity to find a
job to take care of the kids--my dad and them--but he never got a
check. But we thought we had to.
So you can look back on this and find out how better off we are
because of some of the changes we have made into the country that we
are today. I think that is what we have to do.
I remember waiting in gas lines in 1974. I had to wait to buy gas to
go to work every other day, depending on your license plate's last
number. There were so many different ways you could. Then we started
trying to find different ways that we could maybe buy in bulk and be
able to use that during times when we couldn't buy gas.
I do not intend to stand in line and wait for a battery or a battery
component for me to drive my vehicle if I am forced to by an EV car.
And that is what we are doing. We are almost bribing American citizens
to buy EVs.
The car companies in America, the big three, were so committed that
they had to have $7,500 in credit. Now, here is General Motors, Ford,
and Chrysler that have to have this money coming from the Federal
Treasury for them to be able to make their market plan. That is their
business plan. I mean, that makes no sense to me at all because I have
watched the automobile industry over the years. I love automobiles, and
I love what they do and how they market them. Basically, when they have
an oversupply, they use incentives for you and me to want to go buy
them. They give you discounts. They give you low interest rates or no
rates in interest. They do everything they can.
But, here, they needed to have the Federal Government entice you to
buy a vehicle that maybe you don't want, that maybe you are not ready
for. And I said: Well, fine. If that is the direction we have to go,
then don't you think we should get something for it? So that is when I
made sure that $3,750--$3,750--would be basically granted as part of
the discount if--if--you basically sourced the critical minerals from
North America or free-trade agreement countries or allies of ours, not
from foreign supply chains that we believe are basically unreliable. It
makes no sense for us to be fighting over whether to get China out of
our supply chains. The bottom line is to have them controlling our
building blocks, how we build our batteries, where they come from, the
anodes and cathodes and all the critical minerals in the processing.
Let me just show you. Basically, when we wrote the bill, we put
strict, tough, but achievable standards in the IRA to ensure that China
and other nations that don't share our values don't benefit off the
backs of American taxpayers. I do not believe the United States of
America and the citizens of our great country and the hard-earned tax
dollars they are paying to our Treasury should be used to benefit
another nation that could use them against us. We were very, very clear
on that.
If you look at the chart right here, you can just see what they have
done.
Everything on the left here shows, by 2023, 40 percent of the
minerals must be extracted or processed in the United States or in
free-trade agreement countries or recycled in North America. This is
written in the bill, this 40 percent. Guess what. They cut that in
half, to 20 percent, arbitrarily by basically saying that these are
temporary rules; they are not permanent rules. This is what we are
dealing with.
This was in the bill all the way down so that we would not have to
rely on sourcing requirements from countries that we couldn't rely on
if they wanted to hold us hostage. It goes clear down, all the way
through. In 2024, 50 percent had to. They cut every one of them in
half--every one of them arbitrarily in half.
I would like for the President of the United States to see this, and
I would be happy to make this presentation to him. I want his
administration to look at this and for the Treasury Department--from
Janet Yellen--to try to explain to the President and explain to the
American people why you could arbitrarily cut in half the intentions of
the bill and what you think that you can do, because we cannot meet the
demands in America.
With all of this investment coming back to our country, they can't do
it quick enough because of their political agenda to get more EV cars
out the door. That is it. That is the only reason. It is not for
securing, basically, this manufacturing back to America
[[Page S5724]]
quicker. It is not to get off the reliance that we have on unreliable
foreign supply chains. It is basically to meet a political agenda.
The other $3,750 was supposed to be directed for production, for
producing the anodes and cathodes. This is what we are dealing with
continuously here.
These are the minerals that were extracted or processed in U.S. free-
trade agreement countries or recycled in North America, according to
Treasury's proposed rules. That is what they want to do. This is what
the IRA says. It is in the law. This is the bill that the Presiding
Officer and I and a lot of people voted for, and we have explained to
them: Follow the law. If you don't follow the law, then you are
breaking the law.
I guarantee you that then-Senator Biden and now-President Biden would
be totally outraged--totally outraged--at this.
They are also distorting the law to make it easier to qualify for tax
credits by pretending that battery component manufacturing is the same
as critical minerals processing. What I mean by that is, you extract
the critical minerals wherever they may be and in whatever part of our
country. That means that we have to do our permitting reforms so that
we can start extracting in the United States the large deposits that we
have that we haven't been able to get to and those in other countries,
such as Canada, North America, and Australia, which are free-trade
agreement countries--start processing them, taking them out, and
getting them ready to go to manufacturing. They are now defining
``manufacturing'' as part of the processing process. That was never
ever part of the law, and they know that.
The fake free-trade agreements, including with Indonesia, which is
totally controlled by China, make them say: We can go to Indonesia and
do business with them and use their critical minerals for processing
and manufacturing and say it meets the qualifications.
It does not. That is not a free-trade agreement country. It is
absolutely controlled by China. Then we have other battery companies,
such as CATL, where basically Ford is going to pay 12 percent for 10
years, a 12-percent royalty for the technology, without having the
ability to create their own technology or it will basically reverse the
technology that was stolen from America. It makes no sense to me at
all. And they want the U.S. Treasury tax dollars--the taxpayers of
America to be giving a 12-percent royalty to China. It makes no sense,
none at all.
They did it again last week with the proposed rules on foreign
entities of concern, delaying deadlines we wrote right into the IRA
that were intended to remove China completely from our battery supply
chains.
To quote from the IRA, the consumer EV tax credit does not apply to
``any vehicle placed in service after December 31, 2024.''
So I want you to look at this chart here. This is in the bill. This
is how it was written from the IRA: The consumer EV tax credit does not
apply to ``any vehicle placed in service after December 31, 2024, with
respect to which any of the applicable critical minerals contained in
the battery of such vehicle were extracted, processed, or recycled by a
foreign entity of concern.''
Basically, in the bipartisan inflation bill that we passed, we
identified--and it was written into law--those countries of concern,
foreign countries of concern. We wrote that into the law--China,
Russia, North Korea, and Iran.
Then, if you see here, this is what was written into law as the
deadline in the Inflation Reduction Act--no extraction or processing of
critical minerals by Chinese entities or other foreign entities of
concern after December 31, 2024.
Look now at what the deadline is in the proposed Treasury rules.
These are proposed Treasury rules. They want to change that to 2026 or
later--2026 or later.
And this is written into the law. This is the code: no battery
manufacturing by Chinese entities or other foreign entities of
concern--December 31, 2023. We are coming up on that deadline.
Look at what they did over here: 2026 or later. That is for the
anodes or cathodes, which are the positive-negatives of batteries. That
is what they want to do to meet their political agenda, not to meet,
basically, the enticing manufacturing know-how that we have in America
to get us up and running. These investments are coming because of that.
But when you strike this out and basically lengthen it to these
timetables or later, this could go clear through the cycle of the bill,
2032.
So do you think that then-Senator Biden would not have been incensed
to see what was done in clear view, plain view, by what any
administration was doing to his bill or a bill that he supported or a
bill that he voted for and what is happening to it now? I don't think
so.
The credit is also not applied to any vehicle placed in service, as I
said, after December 2023 with respect to which any of the components
contained in the battery of such vehicle are manufactured or assembled
by a foreign entity of concern.
China, along with Russia, Iran, and North Korea, is listed in the law
as a foreign entity of concern. It is listed. They are spelled out. It
wasn't like you had to say: Well, we are not sure what the
interpretation of that means. What is a ``foreign entity of concern''?
We spelled it out. It is because they are willing to weaponize their
control of supply chains against the United States and our allies.
Russia has already done that with Ukraine and all of our allies in
Europe.
China, I am sure, is doing the same thing with critical minerals that
they know we have to have for the building blocks that we use every
day--computers, chips--for everything we need.
But now the IRS is proposing temporary exemptions from the end of
2026 to allow batteries containing Chinese minerals to qualify for
years longer than the law allows, as the charts show. It completely
violates the law. I see it, and I am sure many of my colleagues do too.
Yet this administration is moving forward.
I hope the President sees it. I hope he asks for an accounting from
his people who are interpreting and implementing it from the Treasury
Department and DOE and from his own people on his environmental council
within his office.
The IRA clearly set deadlines in 2023 and 2024, not at the end of
2026. Can anyone at the IRS read? Is it that difficult to understand
that the IRA clearly set deadlines of 2023 and 2024, not at the end of
2026 or later?
So it is another 3 years of American taxpayers truly getting screwed
over by the administration. It is another 3 years of China and other
foreign nations reaching deeper into and controlling more of our
electric vehicle battery supply chains. This will put America another 3
years behind.
This loophole means that automakers will not be required to know
whether Chinese critical minerals are actually in a given battery until
2027. They won't even report it. They won't even know where it is
coming from. It puts all of our investments that we have coming to the
country at a critical disadvantage. If they can undercut and basically
flood the market with lower prices, it makes it very difficult for our
own manufacturers in the United States of America to be able to find
the footing and the support they are going to need to make sure the
batteries and components are made right here in America and to make
sure the critical minerals are coming from countries that have supply
chains we can rely on.
I ask you: What is the point of the IRA with loopholes like this?
What is the point of passing a law that the lawmakers can just throw
their hands up and say: Well, here is a $7,500 tax credit that
taxpayers are paying for. This is where your tax dollars are going, and
we don't even know where the batteries came from--whether it is China,
Indonesia, or anywhere else.
Worse yet, the IRS, under this administration, seems to have adopted
a new legal strategy to avoid any accountability from the courts or
Congress. I want you to hear this. They have, basically, a new legal
strategy to avoid accountability by issuing what they call proposed
rules.
A proposed rule means that you are working diligently to get the
permanent rules in place. If you can't get them in place, then nothing
should go out. There shouldn't be any credits. There shouldn't be any
of these incentives until you actually get your act together. Not only
do they not get them together, but they said they can't even come close
to getting them together before 2026, when the law says
[[Page S5725]]
2023 and 2024 in different categories. And they say it might even be
later than that.
That is what they are using. That is the gimmick. That is the legal
strategy to, basically, usurp the law. Then the IRS can break the law,
implement it in a way in which it was passed, and possibly avoid any
judicial review.
They are trying to push into the market, quicker than what we can
basically produce and rely on ourselves, EVs. That is the bottom line.
Car companies have changed and done that to put themselves in a
position where, without the credits and without the incentives from the
American taxpayers, who are giving them money for the cars, they think
it is going to be actually destroying their business plan. This is
wrong. This is not America. This is not capitalism as we know it. This
is not the market-driven performance that we have seen over our
lifetimes. It is absolutely ridiculous and not the way the government
and this country should operate.
I intend to hold the IRS accountable. I will support anyone who
attempts a legal challenge to these proposed rules. If you have been
damaged by what they are doing, and it is basically putting you in
jeopardy of not having your market shares, not being able to get your
product to market quick enough, and basically China is overrunning you
with lower prices because they are keeping you out of the market, then
you should sue the Federal Government--the Treasury--and I will do an
amicus brief behind it because they are breaking the law.
Although we can't normally do a Congressional Review Act resolution
for proposed rules--they know that. That is their strategy: We will
just do proposed rules. That gives us all of the flexibility that we
need.
This situation is unique. Credits are being awarded as if proposed
rules were final. That is what they are doing. That has never been how
we have operated.
Then-Senator Biden knew exactly, and he knows it now, and I am hoping
he gets involved and stops this ridiculousness by some of his
administration and some of the heads of his Agencies.
The Congressional Review Act should apply here. Xi Jinping has
already shown that he will use critical minerals as leverage to put
Americans and the free world at risk with new restrictions on exports
of several critical minerals. I would expect that from Xi Jinping and
China. What I never could have expected was our own government to give
up so easily and continue to let foreign nations control our Nation's
transportation.
The administration is breaking our promise to the American people
that this bill will reduce our debt. These proposed rules are breaking
the law and blowing past the CBO cost estimate. The biggest mistake
that we made--the biggest mistake that I made--was not putting a cap on
the money. If you want to know how we have accumulated $33.8 trillion
of debt so quickly, it is that, when we pass a piece of legislation and
there is a 10-year period on that, the CBO scores it. We have to find
pay-fors. We want to show that we are prudent, that we are paying for
things.
How can you accumulate this? I came here in 2010. The debt was at $13
trillion. We are now at $34 trillion. How can you accumulate that much
debt that quick if you are paying for things?
Let's just quit kidding ourselves.
The bottom line is this. They put a piece of legislation. The CBO
scores it. It becomes very popular. So we have 10 years of spending
authority. We run out of money in 3 or 4 years. Guess what happens.
Rather than coming back to the legislature--because it was such a
successful program--and expanding upon that and making sure that we
have new appropriations and new ways to pay for the additional services
that people want, what happens then? We debt-finance it. It is
basically added to the debt for the next 6 years, if you run out of
money in 4. That is what is happening, and no one seems to really care
about that.
I need my Republican colleagues, I need my Democratic colleagues and
everyone to be serious. The debt we have now, we have accumulated it.
If we do two things, do this: Stop. Stop this craziness of allowing
pieces of legislation to have a CBO score. Make it stop when the money
runs out. If the money runs out in 4 years, then the spending authority
should run out in 4 years. Even though we intended for it to last 10,
it didn't. Don't wait until the next party or the next political
movement changes it. Do it ourselves so we never get ourselves in this
deficit spending and keep accumulating more debt.
The second thing, proposed rules--don't let temporary rules basically
rule the day. Don't let any credit score out the door, don't let any
incentives take effect until you have permanent rules in place. Then
the Treasury would do its job on time.
We are not holding anybody accountable whatsoever, and that is what
we need to do.
Let me be clear. There is no question that the IRA is bringing more
investment to this country than ever before, and it will work the way
it was intended to work.
Electric vehicle and battery makers announced $52 billion in
investments in North American supply chains before the IRS started
loosening rules.
It was working. It didn't need all this. They are placating--just a
few players here--the large carmakers that basically want this
advantage. They want it to be quicker because they put so much
investment into electric vehicles, and we can't supply them. They got
way ahead of their skis, and they want the taxpayers of America to pull
them out. That is it in a nutshell.
Numbers like this show that breaking the law doesn't get us more
investment. It just makes the cost go up for American taxpayers, and it
also keeps jobs in China, not bring them back to America.
This administration knows the deal they made, and the intent of the
IRA was to secure our energy, reduce our debt, and rebuild our critical
supply chain. They are attacking all three of those principles. You
have never heard about the good that the bill did and the reason and
the purpose of the bill: reduce our debt--reduce our debt; secure
energy--we are doing that; and, basically, rebuild our critical supply
chains so that they are reliable and not dependent on foreign supply
chains that, basically, are unreliable.
I am going to do everything in my power to hold them accountable,
protect the American taxpayers, and secure energy supply chains.
This is something we all should be concerned about. I say that
because of this: If we work hard, and we pass a piece of legislation,
and we have an understanding that we all have agreed to on what a bill
does, then every Agency should adhere to the intent of the legislation.
They should not be able to look for loopholes and find loopholes and
even write them in when there are no loopholes. But they are doing
that, not just the Democrat administration or Republicans. They have
all done this.
You can't accumulate $33 trillion of debt or an additional $20
trillion of debt in 12 years, 13 years. You can't do that unless
something is critically wrong. We have been able to show it. We have
seen this, and it has to stop.
So I am asking the President: Please, get involved, Mr. President.
Hold your Agencies to the letter of the law the way you would if you
were still a Senator.
I yield the floor.