Advocates, Lawmakers Weigh Climate Priorities In Narrower Budget Bill

Source: By Lee Logan, InsideEPA • Posted: Thursday, October 7, 2021

Environmental advocates and Democratic lawmakers are scrambling to protect a series of climate- and environment-related initiatives in the party’s emerging budget “reconciliation” package, after President Joe Biden acknowledged his signature economic policy initiative must be significantly downsized to pass.

Biden is reportedly pressing lawmakers to accept a bill with top-line spending of roughly $2 trillion or slightly more, while key lawmakers representing moderates and progressives are signaling a willingness to budge from their prior positions.

The statements suggest movement toward an eventual deal on the reconciliation bill — which has been politically linked with a bipartisan infrastructure package and is considered crucial to helping Biden achieve his 2030 greenhouse gas target under the Paris Agreement.

However, lawmakers and advocates are now determining which policies can fit in a smaller overall bill, with Biden and other top Democrats saying the legislation will come in far lower than an oft-quoted $3.5 trillion figure many lawmakers had been pushing.

“Fortunately, Democrats can still deliver historic economic and social investments that the country needs by spending smarter, not just bigger,” argues an Oct. 5 paper from the center-left Progressive Policy Institute (PPI). “The goal should be a more focused and disciplined reconciliation bill that sets clear priorities and accomplishes a few big objectives well instead of haphazardly trying to do everything at once.”

The paper is titled “Reconciling with Reality: The top priorities of building back better.”

PPI argues a $2 trillion package should cover three broad topics, including $600 billion for climate policy, $975 billion for programs to support “working families,” and $425 billion to strengthen the Affordable Care Act.

The group does not further break down suggested climate-related spending, though it touts a “package of well-designed tax credits” for electric vehicles and other low-carbon technologies as crucial, alongside funding for climate resilience and “breakthrough technologies.”

It also cites a proposed clean electricity performance program (CEPP) — a set of incentives and penalties designed to “mimic” a clean energy standard — as a “top priority,” while also noting the measure has run into opposition from Senate energy committee Chairman Joe Manchin (D-WV) and may run afoul of the Senate’s procedural rules for reconciliation bills.

If the CEPP “cannot be included in the package, it must be replaced by another policy to accomplish the same objective,” PPI says, touting the option of a carbon tax with rebates to offset the financial hit to lower-income households.

The notion of a carbon tax serving as a last-minute stand-in for the CEPP also surfaces in an E&E News report, which quotes an advocacy source characterizing the CEPP’s survival as a “50-50” proposition.

However, it remains unclear that Manchin would embrace a carbon tax in lieu of the CEPP, particularly given his frequent call to focus on “innovation” rather than “elimination” of fossil fuels.

Climate Priorities

Separately, the E&E report suggests lawmakers are prioritizing programs that directly curb GHGs over other environmental policies such as a proposed Civilian Climate Corps and funding to replace lead drinking water pipes — even though certain lawmakers are strongly pushing to retain those programs.

The article also says the clean energy tax credits advanced by the House Ways & Means Committee have been estimated to cost $235 billion over 10 years, which is lower than anticipated.

Lawmakers in the two chambers’ tax-writing committees reportedly continue to try to align their tax credit proposals, given that Senate Finance Committee Chairman Ron Wyden (D-OR) has advanced a significantly different plan that would overhaul the country’s energy tax system.

As an example of lawmakers seeking to preserve favored programs, environmentalists are joining with three progressive Senate Democrats — Sens. Wyden, Ed Markey (D-MA) and Chris Van Hollen (D-MD) — to hold an Oct. 7 press conference to argue that they will only vote for a final bill that retains “robust greenhouse gas pollution reductions while delivering jobs and justice.”

More broadly, the Associated Press is reporting that Biden is telling various groups of Democratic lawmakers that the reconciliation bill likely will spend between $1.9 trillion and $2.3 trillion over a decade — which could make it easier for Democrats to settle on necessary tax increases to finance the bill.

“I want to make sure that we have a package that everyone can agree on,” Biden told reporters after an Oct. 5 appearance in Michigan to tout the legislation. “It’s not going to be $3.5 trillion. It’s going to be less than that.”

The Washington Post has reported that Rep. Pramila Jayapal (D-WA), chair of the Congressional Progressive Caucus, countered during an Oct. 4 meeting with a top-line figure between $2.5 trillion and $2.9 trillion, indicating a willingness to move closer to Biden’s potential compromise range.

Meanwhile, Manchin continues to push for a $1.5 trillion top-line spending amount, though the AP story cites an Oct. 5 remark in which he said he is “not ruling anything out” in response to Biden’s spending range.

The statements add up to “pivotal lawmakers flashing potential signs of flexibility,” the story says, suggesting movement toward an eventual deal on the bill.

Negotiations on the measure are continuing, with various reports noting that key White House officials huddled with Senate Democrats Oct. 6 on the reconciliation package, even as lawmakers face a more immediate task of raising or suspending the national debt limit to avoid a catastrophic default the Treasury Department has warned could occur as soon as next week.

Next month’s international climate talks in Scotland have emerged as a key pressure point for Democrats to deliver on the climate-heavy reconciliation package, with Biden officials stressing the need to go into the global talks with a legislative deal to help convince other major countries that the U.S. will meet its GHG pledges.

At the Nov. 1-12 meeting in Glasgow, Scotland, administration officials hope to secure more ambitious GHG pledges from big emitters like China, India and Russia in order to achieve the Paris Agreement’s long-term global warming goals, include striving to limit warming to 1.5 degrees Celsius above pre-industrial times.

Biden officials want to head into the Glasgow summit “with the credibility necessary to build on the Paris Agreement to exhort other countries to reduce their greenhouse gas emissions,” Energy Secretary Jennifer Granholm told a Sept. 30 event. “So, we need the rest of the president’s build back better agenda if we want to lead this $23 trillion global clean energy market that I keep talking about.”

Amid an unsuccessful push to strike a reconciliation deal last week — and thus pave the way for enacting the bipartisan infrastructure deal — Congress enacted a 30-day patch for federal transportation programs that would be reauthorized for five years in the infrastructure measure.

That temporary funding expires Oct. 31. Whether by design or coincidence, the deadline comes on the eve of the United Nations meeting in Glasgow. — Lee Logan (