Republicans look to change, discredit climate bill

Source: By Nick Sobczyk, E&E News • Posted: Tuesday, August 2, 2022

Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. John Barrasso (R-Wyo.).

Senate Minority Leader Mitch McConnell (R-Ky.) and Energy and Natural Resources ranking member John Barrasso (R-Wyo.) last month. Francis Chung/E&E News

Republicans are attacking Sen. Joe Manchin’s climate and clean energy deal on all fronts in a last-second lobbying campaign as Democrats try to shepherd the bill through the Senate this week.

Minority Leader Mitch McConnell (R-Ky.) on the floor yesterday blasted the West Virginia Democrat’s agreement with Majority Leader Chuck Schumer (D-N.Y.), and zeroed in on the bill’s energy provisions.

“The Green New Deal Democrats are coming straight after American natural gas with huge tax hikes,” McConnell said, in an apparent reference to the bill’s methane fee.

“The result will be higher electricity bills, higher heating costs, less exporting to our European allies, just as [Russian President Vladimir] Putin is trying to cut them off,” McConnell said of the climate bill after noting devastating floods in Kentucky.

The rhetorical assault is likely to make its way to the campaign trail. Broadly, Republicans are arguing that the bill, the “Inflation Reduction Act,” would raise taxes and raise consumer prices via government spending.

At the same time, the GOP is trying to pick apart the bill behind closed doors. Under the Byrd Rule, lawmakers lobby the Senate parliamentarian, who then determines which provisions fit the rules that govern budget reconciliation.

Republican leaders on the Senate Finance Committee and Environment and Public Works Committee are already considering which provisions they might be able to challenge, though the details are largely still up in the air (E&E Daily, July 29).

Sen. Kevin Cramer (R-N.D.), who sits on EPW, said Republicans are eyeing the methane fee as “a possible challenge.” But he acknowledged that as a revenue raiser, it would likely fit the rules of reconciliation.

They’ll also have a chance to offer amendments during the marathon Senate floor session for the reconciliation bill known as “vote-a-rama,” forcing Democrats to take difficult votes and, potentially, altering the substance of the bill.

“In previous vote-a-ramas, I’ve had amendments that even passed that improved a bad bill,” Cramer told reporters.

Inflation pressure

Much of the Republican messaging in recent days has centered on an initial score on the bill from the Joint Committee on Taxation, which the GOP claims shows that the bill would hike taxes on Americans making less than $400,000 per year.

President Joe Biden pledged during the 2020 campaign that he would not raise taxes on those earning less than $400,000.

“Americans are already experiencing the consequences of Democrats’ reckless economic policies,” Senate Finance ranking member Mike Crapo (R-Idaho) said in a statement over the weekend. “The mislabeled ‘Inflation Reduction Act’ will do nothing to bring the economy out of stagnation and recession, but it will raise billions of dollars in taxes on Americans making less than $400,000.”

Democrats, however, pointed out that the estimate, which was conducted at the request of Republicans, does not account for potential tax benefits.

White House spokesperson Karine Jean-Pierre noted that the analysis “omits the actual benefits that Americans would receive when it comes to prescription drugs, when it comes to lowering energy costs, like utility bills. It does not include that.”

Senate Finance Chair Ron Wyden (D-Ore.) told reporters yesterday: “Working people are not going to see tax increases.” He added, “And they know that if multibillion-dollar corporations pay their fair share and wealthy investment fund managers pay their fair share, that doesn’t mean that nurses and firefighters are going to see their taxes go up.”

Republicans have also cited an initial analysis by the University of Pennsylvania’s Wharton School that found the bill would minimally increase inflation through 2024 and decrease it thereafter.

“These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation,” the analysis said.

Inflation is a key point for Manchin, a fact not lost on Republicans, but the West Virginia Democrat is sticking to his view that the bill would ultimately reduce consumer prices.

“It’s pretty much common sense,” Manchin told reporters yesterday.

“Everybody has a different opinion of what they’re looking at,” said the Energy and Natural Resources chair.

Fossil fuel sweeteners?

The back-and-forth over inflation will almost certainly continue as the reconciliation process inches ahead this week, as will the Republican prodding of the clean energy provisions.

Still, some of the bill’s fossil fuel sweeteners, requested in negotiations by Manchin, could prove intriguing to Republicans.

The legislation includes a massive expansion of the 45Q tax credit for carbon capture, as well as a mandated oil and gas lease sale in the Gulf of Mexico and off the coast of Alaska.

Manchin and Schumer have also agreed to a separate suite of permitting reforms that could time-limit National Environmental Policy Act reviews and help clear the way for fossil fuel projects like the Mountain Valley pipeline — a top Manchin priority. That effort is expected to get a vote sometime in September with a 60-vote Senate threshold.

Cramer acknowledged that Manchin has been “helpful” in making the bill’s climate provisions more palatable to Republicans by, for instance, insisting on incentives for carbon capture. Still, no Republican is expected to vote for the package.

Moreover, Republicans don’t like that Democrats used fossil fuels in negotiations with Manchin as a bargaining chip, and some are skeptical of the effort to overhaul permitting (E&E Daily, July 29).

Cramer said he’s doubtful that the Biden administration would do much to advance fossil fuel development, even with permitting reforms and new money for carbon capture.

“They just have a million ways to slow down development of fossil fuels,” Cramer said. “And I think we know at this point that is their religion and that’s their conviction.”

Republicans have long wanted to reform environmental regulations, but Senate EPW ranking member Shelley Moore Capito (R-W.Va.) called the Schumer-Manchin dealmaking a “partisan exercise.”

“If Democrats have agreed to pass strong permitting reform, then they should release exact legislative text — not a framework — for consideration and enactment before the Senate considers their partisan reckless tax-and-spending spree bill,” Capito said in a statement yesterday.

“Otherwise, I — and my fellow West Virginians — would not be comfortable trusting [House Speaker] Nancy Pelosi, Chuck Schumer, and Joe Biden to follow through on a plan that would expand drilling, build pipelines, protect coal jobs, or decrease regulations,” Capito said.

Reporter Jeremy Dillon contributed.