West Virginia Needs Biden’s Bill More Than Manchin Politics

(Bloomberg Opinion) -- Senator Joe Manchin, a centrist Democrat, has emerged as the most powerful opponent of President Joe Biden’s ambitious $3.5 trillion reconciliation bill. Yet the bill, if passed, would provide a needed boost to the people of Manchin’s own state, West Virginia. By holding up Biden’s economic agenda, Manchin risks harming his own constituents.

Let’s set aside the politics for a moment and just look at the reality of the state’s economy. West Virginia faces enormous and long-standing challenges. It has the lowest income in the nation, and the sixth-highest poverty rate. Though the state’s economy has grown, it’s steadily fallen behind the rest of the country:

And the state has been bleeding population for decades:

Biden’s $3.5 trillion bill would help West Virginia at a time when it’s clearly in need. Most significant would be the child allowance, a pandemic relief measure that the bill would make permanent. This program gives between $3,000 and $3,600 per child to almost every family — a universal program that benefits the poor, the working class and the middle class alike. But the lower a family’s income, the more they need the money; that means West Virginians would benefit, on average, more than the people of any other state. The same is true of the other tax credits in the bill, including the earned income tax credit. 

Biden’s agenda would also help address West Virginia’s education needs. Economic research shows that the prosperity of a region increasingly depends on its stock of human capital. But West Virginia lags badly in this regard — only 21% of its population has a bachelor's degree, the lowest in the nation. More West Virginians need to go to college — not just to better their own lot in life, but so that the state’s economy can attract the business investment it needs to grow.

But college costs a lot, especially for a low-income family. Biden’s bill would provide 75% of the funding for two years of free community college. It would also increase Pell grants, which go to the students least able to pay for college.

Education isn’t the only factor determining the value of human capital, of course; there’s also health. West Virginia’s health care system tends to get ranked as one of the nation’s worst, which makes sense considering the parlous state of its economy. But Biden’s bill would expand health benefits, increasing Affordable Care Act subsidies and lowering the price of prescription drugs.

West Virginia also has one of the oldest populations in the nation. This is partly because many young people have left for richer regions, leaving their elderly parents behind. That means that the fiscal burden and the actual work of caring for West Virginia’s elderly falls especially hard on the remaining young population, making it harder for them to work and save money. Biden’s reconciliation bill, by expanding Medicare coverage and other health benefits for the elderly, would save younger West Virginians from some of this burden.

In other words, the bill Manchin opposes is exactly what West Virginia’s ailing economy and elderly population need right now. But what about the bill’s climate provisions? The Clean Energy Standard in Biden’s plan would phase out electricity generation from coal, which has historically been a key industry in West Virginia. That might make Manchin’s opposition seem only natural.

But in fact, the coal industry is already dying; forecasts are for coal use to go to zero by mid-century. There were only about 14,000 coal miners left in West Virginia in 2019, down from almost 23,000 in 2012; even Donald Trump couldn’t bring coal back. Instead of trying to protect the last shreds of a dying industry, West Virginia should look to the future, and embrace the far greater employment opportunities that would come with a big deployment of solar energy.

And of course, anything that helps save the climate will help West Virginia, which is at risk of extreme heat, drought and inland flooding. Decarbonization in the U.S. alone can’t stop climate change, but it can make a dent in it while serving as a positive example to other nations, and it can help push down the price of battery storage and other critical green technologies, so that the whole world ditches coal and oil in favor of cleaner energy.

So West Virginia has everything to gain from the bill that its Democratic senator is threatening to cut down. The bill offers the vision of a more prosperous, growing future, instead of a return to the state’s aging, declining past. By helping young, working-age West Virginians get an education, live a healthier life, and by easing the burdens of child care and elder care, Biden’s bill would help put the state on the path to attracting the industries that will allow it to catch up economically with the rest of the nation. If Manchin allows political considerations to prevent that from happening, he’s doing his state a deep disservice.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

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