Deal leaves winners cheering, losers licking wounds

Source: Manuel Quiñones, E&E reporter • Posted: Thursday, December 17, 2015

Republicans won some key victories in this week’s omnibus spending bill and tax provisions deal, including lifting the ban on oil exports and cutting U.S. EPA funding.

Democrats, for their part, managed to secure extensions for renewable energy tax credits and block spending riders meant to restrict the administration’s hand.

Still, weeks of negotiations favored certain interests over others. Some energy and environmental advocates got what they wanted, while many saw their desires traded for other priorities.

Winners

  • Clean Power Plan: Earlier appropriations bills in the House and Senate sought to eliminate or weaken the Clean Power Plan, but the omnibus deal does not contain any policy provisions restricting EPA’s implementation of the program. The House and Senate have separately passed resolutions through the little-used Congressional Review Act to scuttle the regulations and any future similar ones, but President Obama has threatened to veto the measures.
  • WOTUS: The bill leaves another major rule largely unscathed — EPA’s Waters of the U.S. measure meant to clarify the Clean Water Act’s reach. But this week’s victory is more political than practical for EPA. The administration’s rule, finalized earlier this year, has faced numerous legal challenges in courts around the country. The 6th U.S. Circuit Court of Appeals has issued a nationwide stay on the rule until the court decides where the legal battle over the regulation will play out. Still, following a Government Accountability Office opinion faulting EPA’s effort to promote the rule, appropriators asked the agency to work to heed the watchdog’s recommendations. EPA has rejected GAO’s opinion.
  • Oil industry: Repealing the 40-year-old ban on oil exports is a major win for the oil industry, which has taken a hit in recent years as historic production gains eventually gave way to a glut of domestic crude. While exports aren’t an immediate fix for the slowdown in drilling and job losses that have resulted from too much oil, they open global markets for U.S. producers hurting from overproduction and hold the potential for a fundamental geopolitical shift on oil production.
  • Renewables tax credits: After clamoring for years for policy certainty, the wind industry now has a respite from the perennial battles over the on-again, off-again renewable production tax credit. The five-year extension in the omnibus — which is gradually phased out — will assuage investors wary of the uncertain politics surrounding the credit. And the five-year reprieve for the investment tax credit for solar — scheduled to expire next year — will allow the solar industry to avoid the messy political fights that its windy brethren have experienced.
  • Sage grouse plans: There’s no rider rolling back the government’s grouse conservation plans across 67 million acres of the West, as many Republicans had hoped. While the bill does prevent an Endangered Species Act listing for the bird, a listing was never a realistic possibility for fiscal 2016 anyway. To boot, the bill earmarks $60 million for BLM to restore sage grouse habitat. Rep. Mike Simpson (R-Idaho) called it a “disappointment” but tallied other victories on Interior appropriations, including the payments in lieu of taxes (PILT) program, as reasons to support the omnibus.
  • Federal workers: Federal employees won by not losing when it comes to the omnibus package. Unlike other past massive end-of-year spending bills, the language doesn’t ask workers to contribute more to their pensions. In addition, the bill is silent on an average 1.3 percent pay increase for federal workers, which means the raise should go forward next year.

Losers

  • Riders: Republicans have been pushing for dozens of policy riders against Obama administration initiatives since they took over the House in 2011. But Democrats have managed to peel off most of them. They did so again this week, allowing the majority victories on smaller-ticket or existing items.
  • Koch brothers: Democrats have called the deals an energy industry giveaway. But lobbyists for Koch Industries Inc. and conservative energy advocates felt lifting oil export restrictions was not enough to justify extending renewable energy tax credits. In the end, pro-export lawmakers were so keen on a deal they gave in. Rep. Pete Olson (R-Texas) cheered lifting the ban on oil exports as “a big get for Texas and a big get for the country.” On the green energy tax credits that Democrats got as part of the deal, Olson called it a “great trade” because “they’ll be gone in five years.”
  • Coal: The coal industry got several riders in the spending bill, including a prohibition on the administration changing the definition of fill material and limits on new restrictions on financing for overseas coal-fired power plans. However, mining and power plant interests failed to get their top ask — blocking or rolling back EPA rules to cut carbon emissions from power plants. Rep. Evan Jenkins (R-W.Va.) said getting oil exports was not enough to give up on coal. “While that may be a good policy action, it certainly does not override in any way my staunch support to try to protect coal jobs in my district,” he said.
  • Renewables research funding: While the spending package boosted funding for fossil and nuclear research, programs for wind and solar were not so lucky. The omnibus provided about $2 billion for energy efficiency and renewable energy, including a total of $241 million for solar and about $95 million for wind power. “As the deal stands, at 88 percent of 2015 budget levels and 66 percent of the budget proposed by the administration, $95 million is still short of what is needed to support the critical technology R&D work and other areas of [DOE’s Office of Energy Efficiency and Renewable Energy] wind program,” said John Anderson, American Wind Energy Association senior director for permitting and environmental affairs issues.
  • Miners: The bill includes funding to help displaced coal mine workers, plus $90 million in abandoned coal mine funding to boost cleanups and economic development in three Appalachian states. However, the legislation ignores United Mine Workers of America’s pleas for Congress to shore up its imperiled benefits program. UMWA head Cecil Roberts said he was “extremely disappointed.” He said, “We can only ask why? What is it about these senior citizens Congress doesn’t like?”
  • GMO labeling curbs: Opponents of state and local labeling laws for genetically modified organisms fought unsuccessfully to include a rider to block the mandatory disclosure of GMOs — foods with ingredients from crops produced with biotechnology. Riding high on this summer’s passage of legislation to place labeling authority solely in the hands of the federal Food and Drug Administration, advocates of the legislation faced an uphill battle in the Senate. Though Sen. John Hoeven (R-N.D.) said he would introduce a companion bill, a lack of bipartisan support and a commitment to the high-priority surface transportation reauthorization bill put GMO labeling legislation on the back burner.
  • Freedom Caucus: The group of fiscally conservative Republicans helped oust former Speaker John Boehner (R-Ohio) and agreed to support current Speaker Paul Ryan (R-Wis.) with the goal of promoting spending cuts and regular order. But lawmakers worked out the omnibus and tax deals largely behind closed doors and at the leadership level. The legislation also increases spending beyond the caucus’ comfort. “We bust the budget caps by $80 billion, we lost $106 billion in deficit reduction,” said Rep. Dave Brat (R-Va.).

Republicans leaders, including Ryan, say this week’s deal will make way for more regular order next year. Still, both sides say that with divided government, making Congress function will require compromise.

Rep. John Shimkus of Illinois, a top Republican on the House Energy and Commerce Committee, said Boehner had put lawmakers in a position to move a spending bill but expressed disappointment with the process by which the separate measures wound up lumped together in an omnibus and quickly pushed through.

Ryan also criticized the legislative process to attendees at the Republican conference meeting Tuesday night, Shimkus said.

“Everyone hates this process of having 12 bills slammed together last minute; there are winners and losers,” Shimkus said.

Reporters Hannah Hess, Geof Koss, Hannah Northey, Phil Taylor, Tiffany Stecker, Amanda Reilly and Kevin Bogardus contributed.