Senator Manchin urges lawsuits against treasury over EV tax credit rules

In a heated exchange during a Senate Appropriations Committee hearing on Tuesday, U.S. Senator Joe Manchin voiced strong opposition to the Treasury Department’s implementation of the Inflation Reduction Act (IRA), specifically the local content rules for companies to receive clean energy tax credits. The West Virginia lawmaker, known for his pivotal role in shaping key legislation, has taken a firm stance against what he perceives as a watering down of the IRA’s original intent.

Addressing Treasury Secretary Janet Yellen directly, Manchin expressed his frustration with the content rules, which he claimed have been significantly reduced compared to the language in the legislation. “I’m encouraging every manufacturer to sue you, and I will do the amicus brief on (their) behalf …. and you’ll lose every suit,” he said, holding up posters that contrasted the content requirements in the IRA with those set in the final rules by Treasury.

Manchin, who recently left the Democratic Party and registered as an independent, has been a vocal critic of what he calls “partisan extremism” in both major parties. The 76-year-old senator has been particularly critical of the Biden administration’s handling of the IRA’s implementation, arguing that the final local content rules are damaging U.S. manufacturers.

Last month, Manchin expressed his dissatisfaction with the Treasury’s decision to allow automakers an additional year to use Chinese graphite and other critical minerals in battery production before switching to domestic sources, stating that it would “break the law.”

During the hearing, Manchin emphasised that the IRA was written to ensure that the United States was not reliant on supply chains from China, but Treasury’s implementation meant China would stay “in the market for the entire extent of the IRA.” He argued that this outcome contradicted the legislation’s original intent.

In response, Yellen acknowledged the shared concern about reliance on supplies from China and offered to engage in technical discussions with Manchin about the issues he raised during the hearing.

Manchin’s comments come in the wake of his pivotal role in securing the passage of multiple pieces of legislation early in President Joe Biden’s administration, including a massive infrastructure bill. His influential position as a key vote on such measures has given him significant leverage in shaping policy outcomes.

The senator’s call for lawsuits against the Treasury Department over the EV tax credit rules highlights the ongoing tensions between lawmakers and the executive branch over the implementation of the landmark climate and energy legislation. As the IRA’s rollout continues, the debate over local content requirements and supply chain dependencies is likely to remain a contentious issue, with Manchin positioning himself as a vocal advocate for domestic manufacturing and energy independence.

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