Short-term funding fix likely punts LWCF, tax extenders

Source: By George Cahlink and Geof Koss, E&E News reporters • Posted: Wednesday, December 19, 2018

Congress is likely to pass stopgap funding legislation in the coming days that will avert a government shutdown over the holidays but will punt final spending decisions for EPA and the Interior Department into next year.

The move would likely deprive lawmakers of a chance to move various unfinished legislative items, including dozens of land bills, a revival of the expired Land and Water Conservation Fund (LWCF) and extensions of expired energy tax provisions that were seen as likely to move as part of a broad spending package.

For agencies, it would mean a few more months of operating under fiscal 2018 spending restraints, with little ability to shift dollars for starting or terminating programs.

Senate Appropriations Chairman Richard Shelby (R-Ala.) said yesterday that a short-term spending measure is moving to the “top of the desk” as the deadline nears and suggested it could run until February.

The bill, a continuing resolution, would have to be signed into law by Friday to avoid a lapse in federal funding and partial government shutdown beginning Saturday. A closure would force nearly 400,000 federal workers to be furloughed without pay just days before Christmas.

Both parties and the White House don’t seem to want to force a shutdown.

Senate Majority Leader Mitch McConnell (R-Ky.) replied in the affirmative when reporters asked whether he was convinced there would be legislation to avert a shutdown this week. The White House also said yesterday it no longer would seek to let federal funding lapse in its quest for new border wall dollars.

Senate Minority Leader Chuck Schumer (D-N.Y.) also signaled his support for the plan, saying, “If Leader McConnell puts a short-term CR on the table, it’s something we’d very seriously consider.”

The House, meanwhile, returns today, and members there will probably go along with whatever deal emerges from the Senate, where Democrats have more clout under rules requiring 60 votes to advance any spending legislation.

Lawmakers are headed for a stopgap bill after talks among congressional leaders yesterday failed to yield a larger omnibus spending package. The accord would have provided funding for most, if not all, of the seven remaining unfinished spending bills, including the Interior-EPA and Commerce-Justice-Science appropriations measures.

The sticking point has been a GOP push to include some of the $5 billion in funding President Trump wants for building a wall along the U.S.-Mexico border. Democrats so far have refused any new funding for the wall, which they say is unnecessary.

Trump said earlier this month he would be “proud” to force a shutdown of federal agencies if those security dollars were not attached. But the White House backed off its hard line yesterday, signaling it would find other ways to fund border security, including asking all federal agencies to scour their budgets for unspent dollars.

A short-term delay would leave it to the new Congress to settle fiscal 2019 spending, a move neither party is likely to claim as a win.

“If we end up going with a relatively short-term CR, we will end up, in effect, punting this year’s business into next year. I think it’s not a very desirable outcome from anybody’s point of view,” said McConnell.

Public lands

After emerging from a lunch with his Senate Democratic colleagues, Sen. Tom Carper (D-Del.) said, “There would not be a lot of appetite for putting nongermane matters” into whatever CR materializes.

“The idea would be to keep it clean,” he told reporters.

Another CR would deprive a bipartisan group of lawmakers of a legislative vehicle for a public lands package they have been furiously negotiating for weeks.

Sen. Maria Cantwell (D-Wash.), the ranking member on the Energy and Natural Resources Committee, told reporters yesterday the package was “more or less” done but acknowledged that backers need to find a vehicle.

Energy Chairwoman Lisa Murkowski (R-Alaska), who also leads the Interior-Environment Appropriations Subcommittee, said earlier in the day she thought there was still enough time to resolve the public lands package and LWCF.

Later in the day, however, Murkowski said she was frustrated by the growing talk of punting spending decisions into next year.

“I want the full omnibus,” she told E&E News. “We worked too hard on this to slow things down now.”

Murkowski further lamented that she lacked a vehicle for moving the public lands package, which she said is “in really good shape.”

Tax extenders

Meanwhile, a push to extend an assortment of expired energy tax breaks appears unlikely to happen in the lame duck.

“It’s not looking promising,” said Finance Committee member Ben Cardin (D-Md.). “I think the clock may have ticked its final tick on tax extenders.”

The House last month floated legislation that would have extended the breaks retroactively for 2018, but the measure was pulled from the floor when it became apparent the majority lacked the votes to pass it.

House Ways and Means Chairman Kevin Brady (R-Texas) said earlier this month that extenders would be negotiated with the Senate separately from the other tax provisions in that chamber’s abandoned package (E&E Daily, Dec. 11).

The House Rules Committee will meet today to set the terms of debate on a revised tax package that retains a single energy tax provision from the earlier bill: a multiyear extension and phaseout of a biodiesel blenders tax credit — a provision that has drawn support from incoming Senate Finance Chairman Chuck Grassley (R-Iowa).

Sen. Ron Wyden (D-Ore.), the ranking member on Finance, said yesterday the House’s revised package showed House Republicans weren’t serious about passing tax legislation in the lame duck.

“This is still the Brady trophy case of ideological goodies for Republicans under the tree,” Wyden said, alluding to the approach of Christmas.

He declined to comment on whether Democrats and Republicans were having any discussions about tax extenders. “I’m not going to say anything else, but this is a bad deal,” Wyden said.

Black lung tax

Another potential victim of the deal’s demise is an extension of the current black lung tax rate, which is set to drop by half at the end of the year.

With their industry languishing, coal companies fought maintaining the current rate of the tax on coal production that pays health care costs for the suddenly resurgent number of miners with the fatal respiratory disease.

“Coal miners have risked their health and safety to fuel our nation,” 70 national and regional groups said in a letter yesterday urging congressional leaders to approve an extension.

“We urge you to do right by our miners and their families before coming home for the holidays,” they said.

Reporters Jeremy Dillon and Dylan Brown contributed.