Sen. Manchin asks Government Accountability Office to weigh in on Congressional review of Biden EV tax credit rule

MORGANTOWN – Sen. Joe Manchin is asking the Government Accountability Office for a legal opinion on whether the U.S. Treasury’s guidance on implementing the Clean Vehicle Tax Credit, part of of the Inflation Reduction Act, is subject to review under the Congressional Review Act.

Manchin, writing as chairman of the Senate Energy and Natural Resources Committee, made his request in a Monday letter to the GAO, he said in his announcement.

Manchin said the Treasury guidance, issued this month as a proposed rule, makes it easier for Foreign Entities of Concern (FEOC) to take advantage of the 30D tax credit while hurting American taxpayers and increasing America’s reliance on foreign nations for battery and vehicle component supply chains, including China.

He told the GAO that the proposed regulations do not carry out the will of Congress, but rather Biden administration policy not enacted by law. It departs from the requirements spelled out in the IRA regarding critical mineral and battery components.

And, “it flouts the requirement … that critical minerals must be extracted or processed in the United States or a ‘country with which the United States has a free trade agreement in effect..”

The U.S. Trade Representative maintains an authoritative list of the countries with which the United States has a free trade agreement in effect, Manchin said. Treasury illegally includes Japan, and “it claims the power ‘to include additional countries’ as free trade agreement countries as the Treasury Department chooses, and this treatment of critical minerals extracted or processed in Japan will apply even if this ‘proposed rule’ is never finalized.”

Manchin told the GAO that the IRA sets cutoff dates for tax credits for vehicles with battery component minerals were extracted, processed, or recycled by an FEOC (Dec. 31, 2024), or for battery components manufactured or assembled by an FEOC (Dec. 31, 2023).

The Treasury’s Dec. 4 proposal rewrites these clear statutory requirements by suspending the statutory prohibition until Jan. 1, 2027 for both, he said. This allows EVs that contain critical minerals or battery components sourced from FEOCs over the next three years to qualify for the tax credit in spite of the statutory prohibitions.

“And this allowance is effective in a matter of weeks regardless of whether Treasury ever issues a ‘final’ version of the proposal at some later date,” he wrote.

Manchin told the GAO that Looking past Treasury’s proposed rule label and treating the regulations as a final rule in view of the binding legal effect it already has on the operation of the tax credit will enable Congress to review and disapprove a rule “that plainly does ‘not accurately reflect the intent of Congress in enacting the underlying statutory scheme.’ It will enable Congress to reclaim its lawmaking power and its power of the purse.”

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