Joe Manchin: Coal baron, protector of billionaires, child poverty booster

rusticgorilla - January 7, 2022 - Uncategorized

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Dirty empire

More than a third of Manchin’s net worth is reliant on the success of resource extraction. He still profits from a series of coal companies he founded during the 1980s, now under the control of his son, Joe Manchin IV. His stock in one of these companies, Enersystems, makes up 35% of his net worth and 71% of his total portfolio income. According to Manchin’s 2020 financial disclosure, his holdings in Enersystems are worth between $1 million and $5 million, bringing him an income of $492,000 for that year and over $5.2 million since becoming a senator in 2010.

Compare his annual income for being a senator: $174,000. He’s making more than twice as much selling coal than he is serving as a representative for the people of West Virginia.

Enersystems functions by purchasing coal waste material from shuttered mines and reselling it to power plants as fuel. It relies on a network of environmentally harmful mines with unsafe work conditions across northern West Virginia. Humphrey No. 7 mine, Enersystems’ largest supplier, accumulated over 40 safety violations and two fatalities since 2000. The same mine, then managed by Consol Energy, dumped toxic wastewater into Dunkard Creek in 2009, killing every living creature within 30 miles downstream.

The power plants Manchin’s company sells waste coal to are just as dirty and dangerous to the public.

At the Grant Town Power Plant, north of Fairmont, health impact reports produced by the EPA and analyzed by the advocacy group Clean Air Task Force estimate that emissions are associated with 18 annual deaths, 169 annual asthma attacks, and eight annual heart attacks. The group also estimated that 2019 monetized health damages from fine particle accumulation produced by the Grant Town Power Plant amount to $196,675,021.

Jim Kotcon, the conservation chair of the West Virginia chapter of the Sierra Club, estimates that the waste coal burned by Grant Town releases more sulfur dioxide and nitrous oxide per unit of energy than any of West Virginia’s coal plants.

Grant Town was the sole recipient of all the coal sold by Enersystems to power plants between 2018 and 2019.

Aside from the public health and environmental costs, the power plants that buy coal from Enersystems often operate at a net loss. Grant Town, for instance, has lost $117 million over the last five years. It has stayed open through state-backed bailouts and ever-increasing residential electricity rates.

“Fiscally responsible” Joe Manchin has fought to keep these dangerous, money-losing coal operations open at the cost of West Virginians, public health, and the environment because it benefits his own wallet.

Exxon lobbyists

With a new presidential administration—and a new majority in the U.S. Senate—Manchin has become the go-to lawmaker for those seeking to stymie a transition to clean energy. Don’t take my word for it, you can hear it straight from one of Exxon Mobil’s top lobbyists.

Keith McCoy, Exxon’s then-senior director for federal relations, was caught on tape in June bragging about his regular talks with Manchin, seeking to weaken Biden’s climate agenda (clip).

We need congressman so-and-so to be able to either introduce this bill, we need him to make a floor statement, we need him to send a letter, you name it…Joe Manchin, I talk to his office every week. He is the king-maker and he’s not shy about sort of staking his claim early and completely changing the debate.

Exxon lobbied Manchin, and other members of Congress like Sens. Mark Kelly (D-AZ), Krysten Sinema (D-AZ), and John Tester (D-MT), to strip the aggressive climate change provisions from Biden’s infrastructure bill.

When you start to stick to roads and bridges—and instead of a $2 trillion bill it’s a $800 billion bill—if you lower that threshold you stick to highways and bridges then a lot of the negative stuff starts to come out.

McCoy is a bit garbled here, but he is essentially saying if a lawmaker insists on a lower dollar amount for the bill, the climate change provisions would need to be removed—a favorable outcome for Exxon and other fossil fuel companies.

Sure enough, about a week before the undercover footage was released, a bipartisan group of senators—including Manchin and Sinema—struck a deal to eliminate nearly all of the measures that address climate change, including a plan to phase out the types of coal plants that make Manchin millions.

Protector of billionaires

Exxon isn’t the only monied interest to recognize Manchin’s value in a 50-50 Senate. Billionaire investor and Wendy’s chairman Nelson Peltz, who donated nearly $100,000 to Donald Trump, told CNBC that he talks to Manchin “every week” (clip).

Joe is the most important guy in D.C. Maybe the most important guy in America today. He is keeping our elected officials somewhere in the middle. And anywhere center-right to center-left works for me. It worked forever in this country. Until we had these elected officials who started pushing us to the extremes, where it doesn’t work, where it’s uncomfortable. This is still capitalism. It’s not socialism. This is still a meritocracy, and we better keep it that way…
I gotta take my hat off to Joe, who has been an old friend of mine for ten years. I call him every week and say, ‘Joe, you’re doing great. Stay tough. Stay tough, buddy.’ He’s phenomenal.

Peltz not only donated to Trump, but he also hosted the most expensive fundraiser of Trump’s presidency at his own home in February 2020. Attendees paid $580,600 per couple to bump elbows with the former president’s high-profile friends, like Marvel Entertainment’s Ike Perlmutter and sugar tycoon José Fanjul.

Critically, Peltz also applauded Trump’s withdrawal from the Paris Climate Agreement, calling it “another way to make us less competitive.” One can guess that his communications with Manchin have been similarly positioned against measures to mitigate climate change.

Billionaire tax

Why do rich people flock to Manchin? Because he protects their bottom line. The most explicit example of this is the billionaire income tax, which Manchin axed from Biden’s infrastructure bill.

Written by Sen. Ron Wyden (D-OR), the proposal would have taxed billionaires on the unrealized gains of liquid assets, such as stocks and bonds. Billionaires like Elon Musk and Jeff Bezos tend to keep the bulk of their fortune tied up in appreciating stock. As long as they don’t sell any shares, they pay little to nothing to the IRS.

Wyden’s plan would require them to pay taxes on profits each year, even if they didn’t sell any assets. Moreover, it would require billionaires to pay taxes on all the capital gains their assets had accrued to date, amounting to a one-time tax on their total wealth. Only about 700 individuals across the country would be affected.

After Sen. Sinema nixed the Democrats’ plan to raise the highest marginal income tax rate for individuals, the party needed another way to finance their social and climate infrastructure package. Enter Wyden’s proposal, estimated to raise $557 billion in revenue over 10 years.

However, just hours after Democrats floated the idea, Manchin killed it.

“I don’t like the connotation that we’re targeting different people,” he said. “There’s people that, basically, they’ve contributed to society, they’ve created a lot of jobs and invested a lot of money and give a lot to philanthropic pursuits.”

When asked why Manchin supported a corporate minimum tax but not a billionaire tax, the senator responded, “They’re all good Americans.”

Some might say that Manchin is just representing his red state constituents. But the median income of individuals in West Virginia is just $25,320 (Census), 65% of the state’s voters support higher taxes on rich, and, finally, there are no billionaires in the state. Zero.

Not only is Manchin representing the interests of the ultrawealthy, he’s representing the interests of the out-of-state ultrawealthy elite.

Child Tax Credits

The most recent round of negotiations on Biden’s Build Back Better fell apart due to Manchin’s opposition to yet another provision: expanded Child Tax Credits (CTC). The American Rescue Plan, signed into law in March, increased the CTC from $2,000 per child to $3,000 per child for children over the age of six and from $2,000 to $3,600 for children under the age of six. It also made the full credit available to families with little to no income, reaching 27 million children that it hadn’t before.

The impact of Biden’s expansion was stark and immediate. A single mother with two children above the age of 6 working a full-time minimum wage job received $500 a month — $4,200 a year more than under the previous CTC scheme. The first installment alone cut the national monthly child poverty rate by 25%, lifting 3 million kids out of poverty according to Columbia University.

Racial inequalities, long ingrained in our tax system, have begun to be addressed by the expanded CTC:

Before the Rescue Plan’s expansion, roughly half of Black and Latino children in our country received less than the full Child Tax Credit or no credit at all — compared to roughly 1 in 5 white children — because their families earned too little…
If the credit’s expansions are taken away, poverty rates among Black, Latino, and AIAN children would be an estimated 8 to 9 percentage points higher than what they would have been with the expansions still in place…

With such obvious benefits, it would seem like common sense to support extending the CTC expansions for another year. Not so, Manchin said. The senator reportedly told colleagues behind closed doors that parents will only waste the CTC payments on drugs:

Sen. Joe Manchin, D-W.Va., had privately raised concerns in recent months that parents would use their child tax credit payments — a key part of the Build Back Better legislation — to buy drugs, three sources familiar with the comments said.
Manchin relayed the concerns in private conversations with his fellow Democratic senators, the sources said.

His reported statements are in line with past comments, also stated in private, about his constituents. West Virginia mother JoAnna Vance attended a meeting with Manchin in September with about a dozen other advocates asking the senator to support the child tax credit.

“He said he’s gotten phone calls from one grandmother specifically talking about her crackhead daughter ― he used the word crackhead three times ― talking about her crackhead daughter running around using the child tax credit to buy drugs and get high instead of it going where it needs to go,” Vance told HuffPost.

Not only is Manchin’s purported disdain for his struggling constituents disturbing, it is also based on a myth prevalent among conservative and far-right circles.

First of all, West Virginia has the highest drug overdose fatality rate in the nation at 42.4 deaths per 100,000 people and the highest number of opioid prescriptions at 69.3 per 100 people. Yet, rather than follow the science and treat drug addiction as a mental health disease (exacerbated by societal factors like poverty), government officials and emergency workers continue to act with disregard and contempt for addicts. Manchin’s comments place him firmly in this category.

Second, Manchin’s reported fear that parents will use CTC payments for vice instead of care invokes the “welfare queen” myth popularized by Republican President Ronald Regan. We see it today when Trump insists that “we must reform our welfare system so that it does not discourage able-bodied adults from working” and when Rep. Jim Jordan (R-OH) authors a work requirement bill for food stamp recipients. Now, we see Democrat Joe Manchin advancing these Republican priorities.

We do, in fact, know that Manchin’s claim is erroneous: 90% of low-income families who received the expanded CTC payments used the money on essentials like food, utilities, rent, clothing, or education costs. This holds true in Manchin’s West Virginia, as well.

Finally, if Manchin is truly concerned about the so-called “welfare state” he should question why West Virginia is ranked the 5th most federally dependent state in the nation according to WalletHub’s early 2021 analysis. A second ranking by MoneyGeek deemed West Virginia the 2nd most federally dependent, with residents receiving $3.74 for every dollar in federal taxes paid.

Despite substantial federal government assistance, sponsored by more fiscally responsible states, 15.8% of the West Virginia population lives at or below the poverty line—the 6th highest poverty rate in the nation (according to pre-Covid data). Instead of addressing this dichotomy and attempting to improve his state, Manchin has decided to block CTC aid for over 65 million U.S. children.