Imagining an alternate reality as Senate package advances

Source: Josh Kurtz, E&E News reporter • Posted: Thursday, November 30, 2017

Minutes after President Trump concluded his strategy session with Republican senators on tax reform yesterday and minutes before the measure advanced to the Senate floor on a party-line Budget Committee vote, an alternate legislative reality was being discussed in a different part of town.

A panel of experts, led by Rep. John Larson (D-Conn.), converged on the liberal Brookings Institution in Washington, D.C., and attempted to answer the question, “Can tax reform include a carbon tax?”

In the panelists’ view, the answer is: Yes — but not now.

The question of when is open to debate.

“Candidly, I think that carbon tax is a bit of a dark horse in this round of tax reform,” said Adam Looney, a senior fellow in economic studies at Brookings and a former deputy assistant Treasury secretary during the Obama administration. “But I think it’s always going to be there on the shelf and ready to go when people want to get serious.”

Larson, a member of the tax-writing House Ways and Means Committee and the bipartisan Climate Solutions Caucus, introduced legislation this month, the “America Wins Act,” that would establish a carbon tax and use the proceeds to rebuild the nation’s infrastructure and assist displaced coal industry workers. Sixteen Democrats have signed on as co-sponsors.

While labeling himself “an eternal optimist,” Larson, who has been promoting carbon tax legislation since 2008, conceded that the measure is unlikely to get very far as Republicans rush to pass the tax bill before year’s end in their desire for “a political win.” But he said a few additional political imperatives for the GOP in the coming months — including Trump’s desire to pass an infrastructure package, and fixes that the tax legislation will inevitably require — could make the carbon tax more viable.

“I think we’ll have two bites at the apple,” Larson said. He predicted that Trump, who is withdrawing the United States from the Paris climate accord, will conclude that a carbon tax — and its ability to pay for infrastructure improvements — “is a better deal.”

“We’ve got a pollution tax initiative that will supersede the Paris accords,” he said.

Jerry Taylor, president of the libertarian-leaning Niskanen Center, said there are 40 to 60 House Republicans and a dozen Senate Republicans “who are deeply uncomfortable with the president’s abject denial of climate science.”

But that doesn’t mean they’re ready to act on any climate legislation, let alone a carbon tax, he quickly added.

Taylor likened this sector of the GOP to prison inmates who are waiting for a chance to break out but need to do it in a group so they won’t be picked off individually. He called a House resolution introduced last year by Minority Whip Steve Scalise (R-La.) that a carbon tax would be “detrimental” to the American economy “a lockdown and search” of the prison.

The symbolic measure passed 237-163 with near-unanimous Republican support — only then-Rep. David Jolly (R-Fla.), who was defeated last fall, voted “present” (E&E News PM, June 10, 2016).

Asked whether the increase in extreme weather from coast to coast may persuade some Republicans to embrace climate legislation, Taylor expressed skepticism.

“Up to this point, there has been zero evidence that extreme weather and climate events has moved Republicans on climate. … That doesn’t mean that won’t change in the future,” he said.

There has been limited discussion about climate and the environment in the overall tax debate, mainly focused on the piece of the Senate proposal that would open the Arctic National Wildlife Refuge to oil and gas drilling. National environmental groups like the League of Conservation Voters and Sierra Club have been running ads about ANWR and the tax bill in key states and congressional districts, arguing that the Republican legislation rewards “corporate polluters.”

“Those supporting this legislation know no shame,” said Maura , director of the Sierra Club Resist Campaign. “They will sacrifice anything — from our pristine Arctic to programs and policies that save American lives — to fork over billions in tax cuts and giveaways to the wealthiest people and corporate polluters. This scheme does nothing less than threaten the health of millions of people to pour billions of dollars into the pockets of the rich.”

On the eve of Thanksgiving, the LCV released little-noticed polling from eight battleground House districts held by Republicans. It shows that voters are strongly opposed to the tax reform legislation and even more opposed to opening up the Arctic to drilling.

The poll, conducted jointly by Democratic and GOP firms, showed potential political peril for the Republican lawmakers — Reps. Darrell Issa of California; Brian Mast of Florida; Bruce Poliquin of Maine; John Faso and Elise Stefanik of New York; and Ryan Costello, Patrick Meehan and Brian Fitzpatrick of Pennsylvania — if they vote to open the Arctic refuge to drilling.

Meanwhile, several energy taxes remain in limbo, pending a resolution between the House and Senate versions of the reform legislation. Floor debate in the Senate this week could feature discussions on nearly two dozen energy-related amendments filed before the Thanksgiving break.

Some green groups are also worried about the legislation’s impact on nonprofit organizations. Changes in provisions regarding tax deductions could affect nonprofits’ ability to raise money, many groups fear.

Through all this debate over taxes — and in the debates likely to come — Larson remains cautiously optimistic about the prospects for a carbon tax, one of these days.

“In this business,” he observed, “consistency has great value.”