To boost economy and midterm outlook, Democrats must pass clean energy bill

Congressional Democrats are getting restless, and who can blame them. Despite a major infrastructure legislation becoming law last November, the Biden administration’s economic agenda is now stalled — even after a year of painfully public negotiations over the president’s Build Back Better plan. Centrist Democrats now realize that months of infighting has dominated headlines, creating its own major political problem.

“We really kind of need to reset at this point,” says Rep. Cheri Bustos (D-Ill.), who represents a rural Illinois district that swung to Donald Trump in 2020. “I hope we focus on what we can get done and then focus like crazy on selling it.”

“What I don’t want to do is have the Democratic caucus just beat their heads against the wall for months. We need a timeline here [to pass major legislation],” says Rep. Susan Wild (D-Pa.), who kept her seat by less than four points in 2020. 

In short, Democrats need to stop squabbling and produce a legislative and economic win — now. And it increasingly appears that of the administration’s major policy items, clean energy legislation has the best chance of near-term passage, with or without other policy items.

Earlier this month, Sen. Joe Manchin (D-W.Va.), who has been holding up President Biden’s economic plan, indicated that he is broadly supportive of Biden’s clean energy agenda, noting that “we probably can come to an agreement [on that] much easier than anything else” in the Build Back Better legislation, adding that there are “a lot of good things” in clean energy bill.

Crucially, Manchin specifically mentioned the clean energy tax credits as a key area of action he would support. It’s worth remembering that this advanced energy incentive agenda — to spur deployment of dozens of clean technologies from wind and solar to electric vehicles to electricity storage, advanced nuclear power, geothermal power and many others — is the heart of the president’s economic package, and was never intended to be solely about climate change.

Instead, the Biden clean energy agenda is the centerpiece of rebuilding U.S. manufacturing and good jobs, jumpstarting a powerful new economic sector of the American economy. Democrats must recast this clean energy agenda in more economic terms. Together with the new infrastructure law, passage of the pending $550 billion clean energy plan can create millions of new jobs and add trillions of dollars to the U.S. economy while helping us compete with our direct competitors like China.

Democrats would be wise to pounce immediately on Manchin’s willingness to deal on clean energy. It’s true that the senator from West Virginia still has concerns over a few provisions regarding larger subsidies for electric vehicles that are union-made, as well a tax on methane emissions. But these differences can be settled quickly, and in any event such compromises pale in comparison to the policy and political value of passing the overall clean energy agenda.

Done properly, the clean energy agenda can also help reduce inflationary pressures that Manchin and many other Democrats and voters are concerns about. Much of the current inflationary pressure comes from the energy sector, specifically higher oil, gasoline and natural gas prices. But clean energy incentives can help curb energy inflation.

Electric vehicles are far cheaper to operate and fuel than gasoline-powered cars and trucks, directly reducing near-term consumer costs. And as electric vehicle (EVs) sales grow, they will displace demand for oil and gasoline, reducing oil prices throughout the U.S. and global economy. Equally, low-cost clean energy sources like wind and solar and electricity storage can reduce price pressures on natural gas, easing overall energy costs for businesses and consumers alike.

The clean energy tax provisions in Biden’s plan would also create far more certainty for business and consumer investment, since they generally extend for a full decade, as opposed to recent yearly extensions. The legislation makes new tax credits “refundable” so that Americans can get clean investment dollars refunded directly by the Treasury, avoiding complicated tax policies that often shortchange lower-income Americans.

Of course, these investments will also play a huge role in reducing greenhouse gas emissions, over time helping to limit massively expensive climate change impacts that are undermining American public safety and economic growth. According to the National Oceanic and Atmospheric Administration and many other sources, the costs of climate change impacts in the U.S. is now often in the tens and even hundreds of billions of dollars each year.

Finally, the political case for immediate action by Democrats on clean energy is overwhelming. Polling shows huge bipartisan majorities of the American public support clean energy investments both on economic and climate change grounds. And history shows that voters will punish Democrats harshly if they fail to act.

After punting on broad clean energy climate legislation in both 1994 and 2010, Democrats suffered massive midterm election losses in Congress, each time losing more than 50 House seats, as well as majorities in both the House and Senate. Neither President Clinton nor President Obama ever recovered majorities in both Houses of Congress again after their first midterm election defeats, dramatically constraining their agendas for a combined 12 years despite holding the White House. 

It’s time for Democrats to pass clean energy legislation to improve the economy, create good new jobs, reduce climate change impacts and improve their midterm election prospects. If they don’t, voters are sure to punish them come November.

Paul Bledsoe is a strategic adviser at the Progressive Policy Institute and a professorial lecturer at American University’s Center for Environmental Policy. He served on the staff of the Senate Finance Committee and on the White House Climate Change Task Force under President Bill Clinton.