Big week for reconciliation as Dems look to finish changes

Source: By Manuel Quiñones, E&E News • Posted: Monday, December 6, 2021

Senate Majority Leader Chuck Schumer (D-N.Y.) at the Capitol last week. Francis Chung/E&E News

Senate Democrats are looking to finish changes to the budget reconciliation bill in the coming days before moving it to the floor as soon as next week, if Majority Leader Chuck Schumer gets his way.

But the New York Democrat will have to deal with persistent concerns from Energy and Natural Resources Chair Joe Manchin (D-W.Va.) — including on climate portions of the $1.7 trillion bill.

And Sen. Kyrsten Sinema (D-Ariz.), who has said she supports the budget reconciliation effort but has also expressed concerns throughout the process, has said she doesn’t think it will be done by Christmas.

When asked about a compromise industry fee to reduce releases of methane, a powerful greenhouse gas, Manchin remained unconvinced last week, even as boosters of the provisions keep insisting it will survive.

Manchin said, “We have methane, and we have regulations. And I’ve been talking to [EPA Administrator] Michael Regan on the regulations that they’re trying to come to fruition and, you know, are you looking for money? Or are you looking at fixing things? So I think that’s what it’s about.”

Manchin, however, isn’t the only moderate who could potentially force the methane fee out of the package. Sen. Jon Tester (D-Mont.) told reporters last week he has “concerns about approaching this from the tax angle” (Energywire, Dec. 2).

Still, the Montana Democrat has enthusiastically backed much of the bill’s $550 billion in climate spending, and he predicted Manchin would ultimately come around, too.

“I think it’s all about R&D, and I think you could get Joe Manchin in on that,” Tester said.

Another major point of contention is a new tax credit, worth up to $4,500, for electric vehicles built in the U.S. with union support. Michigan lawmakers are championing the proposal to boost domestic manufacturers.

Manchin, who has a nonunionized Toyota manufacturing plant in West Virginia, has deep concerns with the plan, which would also penalize Tesla Inc.. Elon Musk, who runs that company, has said his workers don’t want to unionize.

Sen. Debbie Stabenow (D-Mich.), a top supporter of the credit, said last week she is in continued talks with Manchin, but it’s not clear what a compromise could look like.

The point, Stabenow said, is to avoid rewarding foreign companies that have union labor at home and “fight collective bargaining” in the United States.

“I want to make sure that we are leveling the playing field and that the companies that pay high wages for Americans get supported, and so we’ll see what that looks like,” Stabenow told reporters.

But while the full package has already cleared the House, Ways and Means Chair Richard Neal (D-Mass.) said there are concerns with the provision in the lower chamber, as well.

“I’ve been mindful of the conversations because some of the advocates and opponents have both spoken with me,” Neal told reporters last week. “So I’ve heard in our own Democratic caucus there’s a divergence of opinion on that.”

‘Byrd bath’ awaits

In the coming days, the Senate parliamentarian will review climate and environment provisions of the reconciliation package to make sure they follow Senate rules. The “Byrd bath” process, named after former Senate Majority Leader Robert Byrd (D-W.Va.), will weigh objections from Republicans.

Rep. Jared Huffman (D-Calif.), a senior member of the Natural Resources Committee, expressed frustration last week over slow-moving negotiations in the Senate on the reconciliation bill and fretted over the fossil fuel industry’s ability to shape the package.

“All of this stuff [in the bill] is basically the crumbs that we are left with because API has already won a lot of these battles,” he said, referring to the American Petroleum Institute, the powerful energy lobby. “The idea of making a whole bunch of more additional concessions to the fossil fuel industry, when the entire package, frankly, already has their fingerprints all over it in some huge ways, would be totally unacceptable to me.”

Huffman said “time is not our friend” and noted House Democrats have already pre-conferenced and vetted many of the bill’s climate provision with the Senate in hopes of speeding up work. “Nobody in the Senate is surprised what’s in this bill,” he added.

Rep. Paul Tonko (D-N.Y.), a senior Energy and Commerce member, said he remains “confident” that a methane fee will survive the Senate. Tonko said an effort to add a carbon pricing scheme has largely quieted in recent weeks but said there remains a chance it could still wind up in the final deal.

“I think some of the revenue stuff may require that carbon pricing come into the mix,” said Tonko, noting it could help make up for any unexpected revenue shortfalls in the legislation.

Rep. Kathy Castor (D-Fla.), the chair of the Select Committee on the Climate Crisis, said the increase in royalty fees for drilling on federal lands needs to stay in the final package. The fossil fuel industry has called for keeping the 100-plus-year rates frozen, warning that otherwise consumers will face increased energy costs.

“Currently those royalty fees are not capturing the cost whatsoever, they’re very low. By keeping them so low, they almost create this incentive to go and exploit our public lands,” she said.

Timing outlook

Lawmakers already took care of keeping the government open through the holidays. They’re also on track to approve a compromise National Defense Authorization Act. Remaining on the agenda is the debt ceiling and the “Build Back Better Act” reconciliation plan.

Negotiations are ongoing on how to proceed with the debt ceiling and determine whether Democrats can get “Build Back Better” done in the next three weeks, keep lawmakers in during the holidays or punt until early next year.

“Part of the issue is that this does not seem particularly urgent since I don’t think Schumer has the votes and they are going to run out of time in December,” Sen. John Cornyn (R-Texas) said last week.

Sen. John Kennedy (R-La.) told Fox News’ Maria Bartiromo yesterday, “If your question is, will ‘Build Back Better’ be brought before the Senate, I think only Joe Manchin knows the answer to that, and perhaps Sen. Sinema. I think Sen. Manchin understands, Maria, in his heart that this is a bad bill, bad social policy, bad economic policy.”

House Minority Leader Kevin McCarthy (R-Calif.) also said on Fox News yesterday that the GOP only needed to sway a handful of Democrats to kill the budget reconciliation effort. “We can stop that,” he said.

For his part, Senate Finance Chair Ron Wyden (D-Ore.) said, “The overwhelming view of Senate Democrats is that this is priority business for getting it done this year. That is what I am focused on. The Finance Democratic staff is going at it almost around the clock … a lot of long hours that is all about getting it done this year.”

Reporters Nick Sobczyk, George Cahlink, Emma Dumain, Jeremy Dillon and Kelsey Brugger contributed.

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