Electric vehicle tax credit opposition tests limits of Biden's union love - Colorado Springs Gazette

As the size and scope of President Joe Biden's "Build Back Better" bill dwindled throughout 2021, one proposal that survived the cuts is a $4,500 electric vehicle tax credit that only applies when they're made by union workers.

With opposition to the idea pouring in from across the world and even within his own party, the tax break may test the limits of Biden's self-proclaimed status as the most pro-union president in history.

"We're going to make sure the jobs of the future end up here in Michigan, not halfway around the world," Biden said after touring a unionized electric vehicle factory in Detroit this week. "The middle class built America, and unions build the middle class."

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The $4,500 union-only tax credit is part of a larger $12,500 incentive that also rewards buyers of electric vehicles. Biden aims to have half of all new cars and trucks sold by 2030 to run on electricity. At the Michigan stop, he leaned into the microphone as he boomed that "union made" American vehicles will get the biggest break.

But the credit's list of opponents is large and growing. Canadian and Mexican leaders have come out against it, as have ambassadors from the European Union, Germany, France, Japan, South Korea, Italy, and several other countries, charging that it violates international trade rules.

Some domestic automakers, most notably Elon Musk's Tesla, oppose the union credit as well, with Musk calling Biden a United Auto Workers puppet.

Republicans oppose it, with South Carolina Sen. Lindsey Graham saying it undermines climate change goals by reducing the number of vehicles eligible for the top break.

"That is bad for the environment and is bad for business, and I don't think it's legal," he said.

Most notably, swing-vote Democratic Sen. Joe Manchin threw cold water on the proposal, saying, "This is wrong. This can't happen. It's not who we are as a country. It's not how we built this country, and the product should speak for itself."

Yet, the union break lives on in the Build Back Better Act that the House passed by a 220-213 vote along party lines Friday morning.

Biden is vocal about his strong union ties. He utters the phrase "good-paying union jobs" in nearly every speech, and union leaders have introduced him at every stop on his infrastructure bill tour to date. Biden launched his 2020 presidential campaign at a Teamsters hall in Pittsburgh, with labor organizations contributing $27.5 million to back his White House bid.

But the $4,500 tax credit is much more than a reward for the unions that backed him, argues Center for American Progress Senior Fellow David Madland. He says it's a counter to existing government policies that reward businesses for slashing costs.

"It helps unions ensure that their standards are not consistently driven down by the government giving money to low-road employers," he said. "They can ensure that existing unionized workers have good jobs that aren't constantly being undercut."

With the electric vehicle market set to grow exponentially over the next decade, Madland sees the credit as laying the road for auto factories to create middle-class jobs rather than low-wage, temporary positions filled by workers who often end up on government support programs.

"When the government spends money, it should be creating good jobs," he added. "Do we want this to be an American industry with good jobs, or do we want it to be something else entirely?"

Union membership has been declining for decades, falling from 35% in the 1950s to 20.1% in 1983 and 10.5% in 2018. The union-only electric vehicle tax credit is one big way Biden and Democrats hope to begin reversing that trend.

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The president and party leadership have work to do to get the credit into the Build Back Better Act's final version. If he can win over Manchin and keep the $4,500 break intact, it will fulfill a commitment Biden made on day one of his presidential campaign.

"I make no apologies," Biden said back in April 2019. "I am a union man. Period."

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