Build Back Better Includes Expensive Giveaway to Auto Unions

The House of Representatives approved the Build Back better Act on Friday. This is President Joe Biden’s signature legislation. The bill, although smaller than the original proposal, is full of Democratic wish-list items. This includes policies on immigration, climate change and child care. When it gets to the Senate, it will likely face opposition and possibly some pruning. As the obvious candidate for the cutting block, one proposal stands out.

Biden’s plan for reducing carbon emissions includes a provision in the bill that provides a $7500 tax credit to anyone who buys an electric car, both plug-in and all-electric. This amount will increase by $4,500 for cars manufactured in unionized U.S. factories, and by $500 if the battery is U.S. made.

This provision appears to be part of Biden’s “Buy American” policy, which incentivizes or mandates that domestic purchases are made. In reality, however, this order simply continues to protect Trump’s trade policies and has increased taxpayer costs. However, the proposal for electric vehicle credit is more severe. It not only encourages one type of product, but also incentivizes certain brands.

The bonus of $4,500 worth electric vehicle credits would only be available to vehicles made by Ford or General Motors (previously Fiat Chrysler). A driver looking to buy a Toyota Camry hybrid does not get the additional money even though it is made in Kentucky. The extra rebate would be available to the same buyer who purchases a Chevrolet Bolt. However, production was stopped recently due to battery fires. Out of over 50 available electric vehicles, only the Chevrolet Bolt is currently in stock. OnlyTwo Bolt variants are available for cars that currently meet the criteria to receive the additional money.

The worst thing about this policy is that it doesn’t just give American companies a general advantage (which would be terrible enough), but also gives the United Auto Workers (UAW). In October, when Biden visited a UAW job training center, he bragged about the electric vehicle proposal, saying “I want those jobs here in Michigan”—rather than in states like Tennessee or Kentucky, where UAW membership is less of a certainty.

It is evident that the union component of the policy was far more significant than the consumer incentive. It is evident that the union aspect of the policy was more important than actual consumer incentive. The Wall Street Journal According to a report last week, Rep. Dan Kildee (D. Michigan), co-author of the provision stated that he added bonus funding because he was advised by General Motors & UAW “about how important it is to include an explicitly pro union component.”

The shift to electric vehicles can help reduce not just carbon emissions but also exhaust pollutants. However, it’s not an easy task. However, if this transition is made by executives and not consumers or markets incentives it could jeopardize the overall goal. In this case, the customers being targeted are not for their own political purposes but to receive a kickback from Biden’s key constituency.