On Thursday, Senator Joe Manchin informed Democratic leaders he would not support an economic package that contains new spending on climate change or includes new tax increases. This will deal a huge blow to President Joe Biden's ambitious economic agenda.
The decision comes after more than a year of negotiations and just months before midterm congressional elections that will determine control of both chambers.
Manchin is only willing to support legislation to lower prescription drug prices and extend enhanced Affordable Care Act subsidies.
This results in the Democrats accepting a much skinnier package shorn of nearly all of their long-term ambitions from a year ago, or getting nothing.
Manchin's vote is crucial in an evenly divided Senate. Under special budget reconciliation rules, Democrats need a united caucus to pass the economic package by a simple majority.
His decision came after the June inflation report this week had shown 9.1% annual inflation. This is the worst rate in more than 40 years. Manchin told reporters he was more cautious than ever. He also assailed Washington leaders for failing to heed concerns about inflation for more than a year.
"I was talking about inflation before it was even thought about," Manchin told reporters. "And now I'm more concerned than ever before," he added.
A number of Senate Democrats said it was critical to get a bill this month that would lower inflation, with prescription drug prices both a politically popular item and one on which they are unified.
Nevertheless, the cancellation of tax increases for wealthy people and corporations, extending the solvency of Medicare, and other provisions to reduce the deficit and tackle carbon emissions while bolstering renewable energy, will be a nuisance for many Democrats on Capitol Hill and at the White House.
The Washington Post previously reported on Manchin's rejection. The move comes seven months after Manchin crushed Joe Biden's $2 trillion domestic policy bill, which includes many progressive priorities.
Withdrawal from the climate agreement, which at one point contained some $555 billion for clean energy, electric cars, and global warming resilience, will be a major setback in the Biden administration's efforts to tackle global warming emissions. Last year, the president made a promise that the US would cut greenhouse gas emissions by 50 to 52% from 2005 levels by the end of the decade.
As much as $320 billion in new and expanded tax credits for wind and solar power, nuclear plants, biofuels, an advanced energy manufacturing, and electric vehicles, would have cut global warming causing emissions by nearly 40% by 2030, according to Democratic estimates. Schumer recently said he would back setting aside $375 billion for climate and energy provisions. He also told Manchin he would back provisions aimed at helping domestic energy drilling. However, Manchin declined the proposal.