Senate Democrats’ Budget Resolution Outlines Major Climate Elements

Source: By Lee Logan, Inside EPA • Posted: Wednesday, August 11, 2021

Senate Democrats have released their sweeping $3.5 trillion infrastructure budget resolution that includes the outline of major climate mitigation policies, including a clean power incentive program, fees on methane and carbon-intensive imports and clean energy tax breaks, kick-starting a streamlined legislative process that will allow for their party-line enactment.

The measures are already winning praise from Democratic senators who had threatened to block the related bipartisan infrastructure bill unless the broader climate provisions also advanced, especially in light of dire warnings about the risks of climate change from the United Nations’ Intergovernmental Panel on Climate Change (IPCC).

“The climate deniers are out of excuses and we’re out of time,” Sen. Ed Markey (D-MA), chairman of the Senate environment committee’s clean air subcommittee, said in an Aug. 9 tweet referencing the IPCC report.

“The budget resolution is our best opportunity to take bold climate action now that will create millions of jobs while confronting the climate crisis,” he added.

Senate Majority Leader Chuck Schumer (D-NY) on Aug. 9 unveiled the text of the fiscal year 2022 budget resolution, as well as reconciliation “instructions” to various committees to write their portions of the forthcoming reconciliation legislation.

Senators will begin debating the resolution immediately after the expected approval of the roughly $1 trillion bipartisan infrastructure bill that also has several climate-related provisions.

The Senate took a series of procedural votes Aug. 7 and 8 to conclude debate on the package, and a final vote on the bill could come as soon as Aug. 10.

As part of Senate floor consideration of the budget resolution, which is also slated to begin Aug. 10, lawmakers are poised to endure an extended amendment session in which Republicans plan to register their disagreement with the broader measure’s high price tag and Democrats’ plans to finance the spending through tax increases on corporations and high earners.

Schumer, in an Aug. 9 memo describing the reconciliation instructions to committees, seeks to outline the wide range of policies the resolution would fund, though he cautions it is “not final and not exclusive.”

Broadly, he says the reconciliation package “will allow the Senate to make the most significant investment in tackling the climate crisis in U.S. history, and put America on a path to meet President [Joe] Biden’s climate change goals of 80 percent clean electricity and 50 percent economy-wide carbon emissions reductions by 2030.”

Environment And Energy Panels

Many climate programs in the forthcoming spending bill will be developed by the Senate energy and environment committees that have jurisdiction over EPA and Energy Department (DOE) programs.

Under the plan, the Energy & Natural Resources Committee (ENR) would get to craft policies costing up to $198 billion over a decade, with Schumer’s memo noting that would include the high-profile Clean Electricity Payment Program, which is an incentive-based “clean electricity standard” that has long been reported to be in Democrats’ reconciliation framework. While the policy focuses on an 80 percent GHG cut by 2030, the Biden administration has said this would put the utility sector on track to its goal of net-zero emissions by 2035.

The plan is expected to target funding to electric utilities “to reduce carbon emissions by at least 4% each year,” according to ClearView Energy Partners, citing Senate Democratic talking points.

Other matters ENR would develop concern: consumer weatherization rebates; domestic manufacturing of clean energy and auto sector supply chains; federal procurement of “energy-efficient materials”; climate research, including research at DOE’s national labs; “hard rock mining”; and Interior Department programs.

The Environment & Public Works Committee (EPW) would be allocated $67 billion under the resolution. It would develop a Clean Energy Technology Accelerator that is commonly referred to as a “green bank”; various “environmental justice investments for clean water affordability and access, healthy ports, and climate equity”; EPA climate and research programs; federal investments in energy-efficient buildings; economic development programs at the Appalachian Regional Commission and Economic Development Administration; clean vehicle investments; and a “methane polluter fee” to cut greenhouse gas emissions.

Other Committees

The resolution also directs multiple other Senate committees to craft various climate policies.

For example, the Agriculture Committee would develop agriculture- and forestry-sector programs to reduce carbon emissions and prevent wildfires, as part of its overall $135 billion in funding under the resolution.

The Homeland Security & Governmental Affairs Committee is charged with developing investments to electrify the federal vehicle fleet, both at the U.S. Postal Service and at other agencies, while also boosting resilience and electrifying and rehabbing federal buildings. That panel would receive $37 billion under the resolution.

Further, the Finance Committee would be charged with creating a “Carbon Polluter Import Fee,” which lawmakers have previously characterized as a fee on carbon-intensive imports.

In addition, the tax-writing panel is slated to expand or extend tax credits for “clean energy, manufacturing and transportation.” Schumer’s memo does not detail the scope of such tax breaks — instead saying they are part of $1.8 trillion for “working families, the elderly and the environment” — though prior reports have suggested the energy-related tax portions of the deal could be on the order of $300 billion.

The finance panel would have a major role in developing the forthcoming reconciliation package, given that it has jurisdiction over multiple social spending programs Democrats are advancing, as well as virtually all of the tax provisions that would pay for the broader bill.

Funding to stand up a Civilian Climate Corps would be split among the agriculture, health and Indian Affairs committees.

The resolution directs the various policy committees to submit their portion of the bill to the Budget Committee by Sept. 15, though Schumer’s memo notes “this date is not binding.”

The memo says the $3.5 trillion cost of the reconciliation bill would be “fully offset by a combination of new tax revenues, health care savings, and long-term economic growth.”

Democrats are also opting not to raise the federal debt limit as part of the budget resolution — meaning such a step will be part of this fall’s negotiations on agencies’ regular FY22 appropriations. — Lee Logan (