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A free, fair market promotes energy innovation

by U.S. SEN. MIKE CRAPO Contributing Writer
| February 3, 2022 1:00 AM

At a time when the Biden Administration’s reckless policies are fueling record inflation and supply chain disruptions, we must ensure all Idahoans can find ways to cope, including through relief at the pump. I support a robust market for clean fuels and transportation that makes adoption of electric vehicles (EV) and other innovative technologies more affordable and attainable, not just for those with deep pockets. Regrettably, EV provisions under discussion in the Build Back Better Act (BBBA) run counter to those goals. The proposals currently being considered would limit consumer choice; discriminate against right-to-work states, such as Idaho, and American workers who choose not to unionize; subsidize luxury vehicle purchases by the well-to-do; and hamstring the United States’ ability to compete in foreign markets. That is why I am urging my Democrat colleagues to shelve their proposals.

The federal government should not pick clear winners and losers in the free marketplace. While the BBBA purports to provide a tax credit of up to $12,500 to support adoption of EVs, this enhanced credit would not just be for any EV, or even most EVs. Some American consumers may prefer to continue buying the country’s best-selling EV, the EV with the longest range, or perhaps the most affordable EV on the market. Yet none of those vehicles is eligible for the full credit under the bill. Of the 50 EVs presently for sale in the United States, only two models of the same car are eligible for the full $12,500 under the proposal. Americans should not have 96 percent of their choices in the marketplace penalized, as would occur with the Democrats’ proposal.

Moreover, the federal government should not put its thumb on the choices of our workers to belong to a union or not. Idaho law declares our state’s policy to be to “maximize individual freedom of choice in the pursuit of employment.” BBBA takes away that freedom by saying goods made by workers who decline to unionize should cost more for consumers.

Such proposed government actions arbitrarily benefit certain firms, hurt American workers and limit consumer choice. It makes no sense to undermine innovators in this field, the livelihoods of Americans who would work for them, or the accessibility of their products to American consumers. The better solution is to promote a fully competitive market where the pressure to compete on quality, consumer service, and price remains strong.

Build Back Better’s EV subsidies also flow disproportionately to the wealthy. Giving $12,500 in tax credits to households making up to half a million dollars a year for the purchase of $80,000 luxury vehicles does nothing to make EVs more affordable for the middle class.

Moreover, domestic content and assembly provisions in the bill undermine America’s trade interests. At a time when America should be rallying its allies to confront China on trade policy, such provisions are needlessly driving a wedge between the United States and our allies by promoting Chinese-style industrial policy. Annual EV exports from U.S. plants in 2020 exceeded 215,000 vehicles, the most of any single nation. The adoption of Build Back Better’s proposed EV credit scheme threatens the United States with retaliation from our allies for breaching trade rules and encourages our trading partners to adopt similar schemes to the detriment of our own industry and workers.

The United States is home to the world’s greatest auto companies because Americans embrace free and fair markets, both as producers and consumers. There is no reason to turn our back on that winning formula by moving forward with proposals to undermine the foundation of what makes our markets so successful.

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