Hill weighs common ground, hurdles in new Congress

Source: Geof Koss, Nick Sobczyk E&E reporters • Posted: Thursday, December 13, 2018

The obstacles to a bipartisan deal are many, but possible areas of agreement on an infrastructure package in the 116th Congress are starting to emerge — including on policies that meet the top Democratic demand of curbing climate change.

While President Trump’s campaign pledge to enact a $1 trillion infrastructure package went nowhere over the last two years, lawmakers from both parties are gearing up for a focus on roads, bridges and energy projects in the new year.

“That’s certainly one of the things that everybody’s focused on as something we should be able to do,” Sen. John Hoeven (R-N.D.) said yesterday.

While Senate Minority Leader Chuck Schumer (D-N.Y.) threw down the gauntlet last week when he demanded that any infrastructure package must include provisions to tackle climate change, Senate Republicans were largely unfazed by the move (E&E Daily, Dec. 7).

“Everybody knows that they’ve had this position now for so many years, so this is not a change,” said Sen. Jim Inhofe (R-Okla.), a longtime climate skeptic and former chairman of the Environment and Public Works Committee.

Inhofe famously had a close working relationship with then-Sen. Barbara Boxer (D-Calif.), his counterpart on the committee, when the pair shepherded the last major highway bill through the Senate that included permitting reforms agreed to by both parties. In the previous major highway bills, Republicans also looked to streamline permitting in exchange for a big government check.

Senate Republicans are making clear that a major focus of infrastructure negotiations next year will be additional permitting reforms — an area that was a near-constant topic of conversation in discussions on the plan that never got off the ground in the 115th Congress.

The Trump administration has since made various moves to slash the permitting processes for major infrastructure projects, but Sen. Dan Sullivan (R-Alaska) said he’s still interested in going further.

“Even if you did a trillion-dollar infrastructure piece and you don’t have serious permitting reform, it’s a waste of money,” he told E&E News. “Even my Democratic colleagues kind of acknowledge that.”

But Sullivan also appeared to be open to addressing climate policy around the edges of an infrastructure bill, and he suggested it could make an easy trade-off for permitting provisions that could otherwise be controversial with Democrats.

“If it’s they want to shut down the oil and gas industry, which some of them might want to, that’s a no-go for someone like me,” Sullivan said. “But other elements, I’m certainly open to listening to it.”

Hoeven said permitting reforms should be amenable to members of both parties.

“It used to be that the fossil fuel industry needed pipelines,” he said. “But now you’ve got the renewable industry, they need transmission lines. They also need ways to move ethanol and biodiesel. That’s an area where you’re a fan of fossil fuel, renewable energy or both, we ought to be able to come together because both need transmission and transportation.”

Permitting provisions also have the benefit of not adding to the price tag of an infrastructure package, Hoeven added. “That’s one you don’t have to worry about funding because industry will pay for it.”

Ultimately, though, both Sullivan and Sen. Mike Rounds (R-S.D.), another EPW member, suggested they weren’t concerned that Schumer’s climate demands would hold up talks.

“It’s their starting point,” he said, adding that “there’s room for negotiations.”

Sen. Bill Cassidy (R-La.), who has touted the potential for natural gas to reduce emissions, hadn’t seen Schumer’s proposal but said areas such as building efficiency and modernizing the electric grid might yield some common ground.

Senate EPW Chairman John Barrasso (R-Wyo.) was unconcerned by Schumer’s proposal, which did not include carbon-pricing frameworks that he has long opposed.

“Look at what’s happening in France, look at what the voters across the country have done in Democrat states rejecting carbon taxes, rejecting limits on exploring for energy, rejecting mandatory renewables,” he told E&E News this week. “That’s not where the American people are.”

On the House side, Rep. Earl Blumenauer (D-Ore.) said he’s had routine conversations during the past six months with incoming Transportation and Infrastructure Chairman Peter DeFazio (D-Ore.) about moving forward on an infrastructure bill.

DeFazio ticked off a list of agenda items on climate for his committee, including greening public transportation and funding charging stations for electric cars. He noted that Americans waste billions of gallons of fuel in congestion each year, making addressing traffic jams an important component in reducing greenhouse gas emissions.

Some of the items DeFazio wants to address in an infrastructure bill, such as investments in battery storage for renewable energy and resilient building, also sounded similar to Schumer’s list.

One of the largest contributors to carbon in the United States is transportation.

“We’ve got to look at ways to reduce fuel consumption in transportation,” DeFazio said. “Maritime, we’re probably going to be looking at fuel cells. But then we need to invest in technology to figure out a way to produce green hydrogen, which has potential.”

Price tag issues

By far the biggest challenge for an infrastructure package will be paying for it — which was the primary reason the Republican-led Congress shied away from Trump’s plan.

“I thought you could just wave a magic wand, shift some money around, stir some lead and heat it at the right temperature and magically have the money,” Sen. Roger Wicker (R-Miss.) told reporters. “Now we’re told that it’s actually going to take revenues to pay for it.”

Hoeven said finding balance between public and private investment will be the primary source of tension between the two parties.

“Republicans want to draw more private financing to the equation, and of course the Democrats want virtually all public funding,” he said.

One possible area of compromise is legislation authored by Hoeven and Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, that would allow states to issue tax-exempt bonds in partnership with private entities, lowering their overall borrowing cost.

“That leverages a lot of money, and we need to make sure that we’re including those as part of the plan,” Hoeven said.

Wyden this month lamented that Trump didn’t move first on infrastructure at the outset of his presidency, when he says there was a bipartisan deal to devote revenues from taxing repatriated foreign earnings to infrastructure.

“My view is it was political and economic malpractice for him to not walk in in January of 2017 and say we’re going to do infrastructure right out of the gate and bring together the leadership and the committees and Finance and Ways and Means whose job it is to find the money,” Wyden told E&E News. “It was there for the doing.”

Instead, Republicans enacted a partisan tax overhaul, which Wyden noted could be revised to steer funds for infrastructure. He pointed to a proposal Senate Democrats floated earlier this year to do exactly that to pay for their own $1 trillion infrastructure package.

Senate Minority Whip Dick Durbin (D-Ill.) said the Democratic plan remains a “starting point” for infrastructure negotiations next year.

“I hope we can do better, but finding revenue is very difficult,” he told E&E News yesterday.

Sen. Chuck Grassley (R-Iowa), who will lead the Finance Committee next year, has already moved to squelch talk of reopening the tax law.

“Now’s not the time to walk back the historic economic progress we’ve made in the last two years,” Grassley said in a statement last month.

Blumenauer, for his part, said he wants to have “two or three major hearings” on the Ways and Means Committee about financing an infrastructure bill.

He added that he wants to adjust the gas tax and eventually replace it with a vehicle-miles-traveled fee, which would better account for rising numbers of electric cars and autonomous vehicles on the road. Senate EPW ranking member Tom Carper (D-Del.) has repeatedly floated a similar idea.

“Basing transportation funding based on gallons of fossil fuel consumed is doomed,” Blumenauer said. “Within 10 years it’s gone, it’s collapsed.”

Other hurdles

Although Blumenauer said he doesn’t want to tack too many things onto an infrastructure package that are “unnecessarily complex and controversial,” climate policy is clearly in the mix.

“Carbon policy is clearly a part of infrastructure policy, what we do with everything from the electrical grid to more efficient transportation,” Blumenauer said. “It is part and parcel.”

He added, “There is a whole range of things on energy and infrastructure that are not controversial and broadly supported.”

Other challenges for infrastructure include the 2020 presidential election season, which will begin in earnest next year.

“I think if we don’t get something major done in six months, it’s not going to happen,” said DeFazio.

Another hurdle is low expectations around infrastructure, which despite all of Trump’s talk has become a punchline in the current Congress.

Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said last week that although she believes bipartisan cooperation on infrastructure is possible next year, she noted the deflated hopes that accompanied the hype on the subject for the past two years.

“I do think that this is an area that we can be working together,” Murkowski said. “But we’ve kind of said this once before. So I’m getting a lot of people, when I was home over these past few weeks, saying, ‘Yeah, is infrastructure really going to happen? Because if it is, we’ll get ready for it. But if it’s not, we’re not gonna.'”

Reporter George Cahlink contributed.