Democrats release reconciliation outline; divisions remain

By George Cahlink, Geof Koss, Jeremy Dillon, Emma Dumain | 10/28/2021 01:08 PM EST

President Biden with House Speaker Nancy Pelosi (D-Calif.) at the Capitol this morning. Francis Chung/E&E News

President Biden today sought to rally Democrats behind an emerging framework for a massive $1.75 trillion spending bill that would provide $550 billion for the climate crisis, even as many details remain to be negotiated.

Biden outlined the plan this morning to House Democrats on Capitol Hill ahead of leaving for Europe and the COP 26 U.N. climate conference. The White House and Democrats have said Biden would send a strong international message on climate change if he secured a deal before the trip.

Based on first reactions from progressives, however, it did not appear that Biden would get the immediate green light he was after — or that it would be enough to compel House Democrats to vote for the separate, $1 trillion bipartisan infrastructure bill the Senate passed over the summer. House leaders and the White House appear keen on that happening today.

According to a White House summary, the reconciliation framework would include four broad initiatives focused on clean energy and combating climate change. Those are:

  • $320 billion in expanded tax credits for utility and residential clean energy transmission and storage, clean passenger and commercial vehicles, and clean energy manufacturing.
  • $105 billion in spending and other incentives to expand extreme weather resiliency, aid communities facing legacy pollution and create a Civilian Climate Corps.
  • $110 billion in targeted incentives to develop new clean energy technologies and supply chains for solar, batteries and advanced materials. The legislation will also include clean energy incentives for existing industries like steel, cement and aluminum.
  • $20 billion for federal clean energy procurement of next-generation technologies, including long-duration storage, small modular reactors and clean construction materials.

The framework does not specify whether a host of other environmental provisions sought by the Democrats would make the deal, including a rollback of drilling in the Arctic National Wildlife Refuge, package of mining reforms and new Superfund cleanup fees.

Lawmakers were still struggling to make sense of what was in and what was out of the negotiated reconciliation package this morning in terms of the climate, energy and environment provisions.

Sen. Sheldon Whitehouse (D-R.I.) said he believed a methane fee — the latest flashpoint in the debate over the climate portion of the reconciliation package — was part of the legislative framework but said it was unclear how the revenues would be used. Rep. Kathy Castor (D-Fla.), chair of the House Select Committee on the Climate Crisis, said that was her understanding too.

Sen. Martin Heinrich (D-N.M.), meanwhile, declined to comment on the state of the methane fees. “There’s enough ambiguity in this document that we’re still digging through it,” he told reporters, adding that he was pleased with what he’s seen so far. “There are a lot of things that I’m very excited about, but we’re still trying to get accuracy on what the entire picture looks like.”

A source familiar with negotiations in the advocacy community said the methane fee was “still being negotiated,” a clear signal that the framework was exactly that — a blueprint but not a deal.

Rep. Henry Cuellar (D-Texas) said Biden did not discuss whether methane fees were part of the framework but said he continues to have concerns with the provision. “I don’t like anything that’s punitive,” he told E&E News.

More unanswered questions

This morning, Sen. Tina Smith (D-Minn.) said she too was digesting the framework, which she said holds the potential to “move us significantly in the right direction” on climate.

But she said she was unclear exactly what had made the cut and whether additional changes were possible, and in a tweet said she supported House progressives for holding back on a bipartisan infrastructure vote until clarity could be provided.

“Is this framework the final word or is it the basis for future negotiations?” she told reporters. “That’s a question that I think we have to answer too.”

Smith had championed the Clean Electricity Performance Program, or CEPP — the $150 billion decarbonization proposal central to Democrats’ ambitions to use reconciliation to help meet Biden’s emission reduction goals. When the CEPP got scrapped because of opposition from Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.), conventional wisdom held that this pot of money would be redistributed to other emissions reduction programs.

It wasn’t clear from the framework alone, however, whether this had taken place. Castor told reporters she thought it had. The advocacy source said it was roughly $100 billion of the original CEPP funds that had been integrated into other emissions reductions initiatives across the agriculture sector, manufacturing, rural electric cooperatives, “some affordability programs,” and agriculture and natural solutions.

Sen. Chris Coons (D-Del.), who has pushed a carbon border adjustment tariff for reconciliation, conceded that the plan was unlikely to be included in the framework but held out hope for additional changes. “The framework is beginning the process of negotiating with detail,” he said.

Taxes, conservation corps

On energy taxes, Senate Finance Chair Ron Wyden (D-Ore.) said the framework includes provisions from both the clean energy overhaul, S. 1298, his panel put forth earlier this year for reconciliation and a competing measure from the House Ways and Means Committee, the “GREEN Act,” H.R. 848.

Wyden signaled the framework would include his proposal to tie the availability of tax breaks to emissions reductions goals, although the White House said the deal includes 10-year extensions of key incentives — as pushed by House tax writers.

Wyden said the framework would allow a direct pay option to make it easier to finance clean energy projects, expand access to “affordable renewable energy and clean vehicles,” as well as invest in communities that depend on fossil fuels.

Elsewhere, Rep. Joe Neguse (D-Colo.), chair of the House Natural Resources Subcommittee on National Parks, Forests and Public Lands, told E&E News this morning that his understanding was that the reconciliation bill would fund “about $27 billion worth of agricultural funding” that “includes money for mitigation works … hundreds of millions of dollars for resiliency [and] money for the Firewise program.”

He also said the Civilian Climate Corps, the green jobs training and placement program he and other climate hawks have championed through this process, would receive “a total of close to $30 billion” to be “spread out across multiple accounts.”

Senate Democrats had hoped for $30 billion for the CCC, so that top-line number for the program would be a major victory, but it wasn’t immediately clear whether House Natural Resources Chair Raúl Grijalva (D-Ariz.) was successful in securing around $3.6 billion of that money for a CCC to be housed entirely within the Interior Department.

Grijalva had previously expressed concerns that too much of the administrative costs of establishing a CCC would go toward AmeriCorps (E&E Daily, Oct. 21).

“I feel OK,” Grijalva told reporters as he left this morning’s closed-door House Democratic Caucus meeting, where members were briefed on the framework and lobbied by Biden and Pelosi to support it and pass the bipartisan infrastructure bill in short order. “It is what it is right now, and I hope that in any further scrubbing on the Senate side that those provisions would remain.”

Grijalva also added that while the framework set top-line amounts, the issue now was getting “specificity” as well as guarantees from moderate Democratic Sens. Manchin and Kyrsten Sinema of Arizona that they would support this on their side of the Capitol.

White House remarks

During a White House address this morning, Biden heralded the plan as a historic investment to address climate change and reposition the economy to compete in the clean energy manufacturing sphere.

“I know how deeply people feel about the things that they fight for, but this framework includes historic investments in our nation and in our people,” Biden said. “Any single element of this framework would be viewed as a fundamental change in America. Taken together, they are truly consequential.”

Biden said the investments made in the agreement would position the country to meet his goal of reducing greenhouse gas emissions by 50 percent by the end of the decade.

Centered on a series of renewable, efficiency, manufacturing and electric vehicle tax credits, Biden called the framework, “The most significant investment to deal with the climate crisis that has ever happened, beyond any other advanced nation in the world.”

Biden said both the reconciliation bill and infrastructure measures are part of his climate investment strategy. “When paired with the bipartisan infrastructure bill, we will truly transform this nation,” Biden said.

Greens react

Green groups were eager for more details but were generally pleased with the outline emerging for climate spending. They clearly wanted more mandates and spending on climate but are rallying around the framework.

“Right now is the time to finalize this transformational bill and get it done. Paired with bold executive and state actions, the Build Back Better Act will ensure the U.S. equitably meets its climate goals by 2030,” said Gene Karpinski, president of the League of Conservation Voters.

The Sunrise Movement, however, warned Democratic leaders to pay attention to their progressive wing. And Food & Water Watch slammed the framework as a failure to crack down on fossil fuels.

"On a day when Congress is finally holding the oil and gas industry accountable for its climate disinformation campaigns, President Biden has announced a spending plan that fails to do the same," said Mitch Jones, the group’s policy director.

"Given the prime opportunity to cancel billions of dollars in domestic subsidies for oil and gas polluters, the president and congressional leadership have rolled over," he said. "A climate plan that fails to directly confront the oil and gas industry cannot possibly be considered meaningful."