Schumer, a New York Democrat, made a number of concessions to pare back the climate provisions but Manchin would not budge.
Manchin told Schumer he will not support a bill this month with any provisions on energy or climate, or consider raising taxes on the wealthy or corporations, which represents a massive blow to President Joe Biden’s legislative agenda ahead of November’s midterms.
The change in tone of the latest negotiations was abrupt. Manchin had supported those provisions throughout the negotiations with the majority leader, both at the staff and member level, one of the sources familiar said.
“I’m not going to sugar coat my disappointment here, especially since nearly all issues in the climate and energy space had been resolved,” Senate Finance Chair Ron Wyden, whose committee had jurisdiction over the clean energy tax credits and corporate tax provisions, said in a statement.
“This is our last chance to prevent the most catastrophic—and costly—effects of climate change. We can’t come back in another decade and forestall hundreds of billions—if not trillions—in economic damage and undo the inevitable human toll,” the Oregon Democrat added.
Similarly, climate advocates, many of whom were anticipating seeing climate and energy bill text soon, reacted on Thursday night with shock and outrage.
“This is nothing short of a death sentence,” Varshini Prakash, co-founder of youth climate group Sunrise Movement, said in a statement. “It’s clear appealing to corporate obstructionists doesn’t work, and it will cost us a generation of voters.”
“There truly aren’t words for how appalled, outraged, and disappointed we are,” Tiernan Sittenfeld, senior vice president of government affairs at the League of Conservation Voters, said.
Manchin’s office pointed to rising inflation. “Political headlines are of no value to the millions of Americans struggling to afford groceries and gas as inflation soars to 9.1%,” Manchin spokeswoman Sam Runyon said in a statement. “Senator Manchin believes it’s time for leaders to put political agendas aside, reevaluate and adjust to the economic realities the country faces to avoid taking steps that add fuel to the inflation fire.”
But Evergreen Action co-founder Jamal Raad told CNN that Manchin’s argument about not spending more to avoid worsening inflation missed the mark when it came to energy and climate.
“He’s not even about solving inflation because the major driver of inflation was gas prices, and he decided we should invest more in fossil fuels,” Raad said.
Manchin is open to letting Medicare negotiate prescription drugs prices and to extending enhanced Affordable Care Act subsidies for two years, according to the source familiar, which suggests that’s all Democrats are likely to get in the package they’re hoping to pass in a process that requires only Democratic votes.
Democrats are now pushing to get the ACA subsidies extended before the August recess to avoid major rate hikes that will be announced just before the midterm elections in November.
The subsidies were expanded as part of the Democrats’ American Rescue Plan Act and made coverage on the Obamacare exchanges more affordable, leading to record enrollment this year. If they are allowed to expire at the end of the year, nearly all of the 13 million subsidized enrollees will see their premiums rise for 2023, according to the Kaiser Family Foundation. More than 3 million people could become uninsured, an Urban Institute analysis found.
Democrats are hoping to avoid the negative publicity of such premium increases. If Congress doesn’t act, consumers will learn in the fall just how much more they could have to pay. Open enrollment begins on November 1, a week ahead of Election Day.
This story has been updated with additional information.
Tami Luhby contributed to this report.