A Biden-backed proposal to give an extra tax break for the purchase of electric cars made in the U.S. with union workers will undergo a review by the Senate parliamentarian who will determine whether it qualifies under budget rules to move as part of President Joe Biden’s nearly $2 trillion economic package.
The plan to offer $4,500 more in tax credits to consumers who buy those vehicles has drawn vehement opposition from a variety of people, including Tesla Inc. Chief Executive Officer Elon Musk, Senator Joe Manchin and trade officials in Canada, Mexico and the European Union.
But their lobbying may be unnecessary if the office of Elizabeth MacDonough, the parliamentarian, concludes it doesn’t mesh with budget rules. Her office will review the electric vehicle provisions along with other tax credits contained in a $1.75 trillion spending bill passed by the House and now under consideration in the Senate. Lawmakers are using a budget reconciliation procedure that shields the measure from a filibuster but requires 50 votes in the Senate.
Democrats may have to go back the drawing board or scuttle the measure all together if she decides that it violates the so-called Byrd Rule, which prohibits the use of budget reconciliation to advance policy changes with “merely incidental” budgetary impacts.