Obama’s $4.1T plan aims for ‘climate smart’ economy

By George Cahlink | 02/09/2016 01:35 PM EST

President Obama is doubling down on his push for clean energy policies in his $4.1 trillion fiscal 2017 budget, but his final spending blueprint is expected to be largely ignored by the Republican-controlled Congress.

President Obama is doubling down on his push for clean energy policies in his $4.1 trillion fiscal 2017 budget, but his final spending blueprint is expected to be largely ignored by the Republican-controlled Congress.

"The challenge of climate change will define the contours of this century more dramatically than any other," Obama wrote in the request to Congress released this morning.

Building on the December global climate accord in Paris, Obama said, the budget would lay the groundwork for a "climate smart economy" with new investments in transportation and clean energy, help for communities in preparing for climate change, more resilient protections for natural resources and a commitment to reduce carbon emissions globally.


Aiming to bolster his green legacy and shape policy arguments for the next administration, Obama is proposing a doubling of clean energy research over the next five years and would create a special fund to spend $1.65 billion over the next decade on climate infrastructure.

According to the budget request, the research proposal, dubbed Mission Innovation, would increase clean energy research and development spending from $6.4 billion in fiscal 2016 to $12.8 billion by fiscal 2021 (E&E Daily, Feb. 8). About three-quarters of those dollars would go toward Energy Department programs.

Obama’s boldest proposal — one already lambasted by Republicans and the petroleum industry — is a new $10.25-per-barrel tax on oil that would be charged to fossil fuel producers. The tax would generate an estimated $32 billion annually over the next decade that the administration wants to spend for clean vehicle development, public transit and urban planning, a proposal it calls the 21st Century Clean Transportation System (E&E Daily, Feb. 5).

By creating the new tax, Obama said, there will be a "clear incentive" for the private sector to reduce investments in oil and increase spending on clean energy technologies. He said the tax would not only make new investments but also provide dollars for the long-term stabilization of the federal Highway Trust Fund, which is used to pay for upgrading and maintaining the nation’s infrastructure.

Much of the money would come in the form of grants to state and local communities via the Transportation Department.

Obama would also provide $1.3 billion to advance the goals of the Global Climate Change Initiative, which would include $750 million in U.S. funding for the Green Climate Fund to help developing countries reduce carbon pollution and strengthen resilience to climate change.

Green groups applauded the president’s priorities in the spending document.

"With his final budget proposal, President Obama has laid out an ambitious roadmap for the future that will help protect our air, water, lands and wildlife, meet our climate commitments, and invest in low-carbon transportation solutions and innovative clean energy technologies," said Gene Karpinski, president of the League of Conservation Voters, in a statement.

Partisan reaction

But House Speaker Paul Ryan (R-Wis.) today said the Obama spending plan "isn’t even a budget so much as it is a progressive manual for growing the federal government at the expense of hardworking Americans." He said the proposed "oil tax" would increase the cost of gas 24 cents per gallon and lead to a loss of jobs in the oil industry.

Republican Budget Committee leaders in both chambers have signaled their lack of interest in the proposal by declining to hold budget hearings with Office of Management and Budget Director Shaun Donovan to review it.

Senate Minority Leader Harry Reid (D-Nev.) defended the budget for putting the middle class first and investing in the future. He noted that the lack of hearings with the OMB chief would mark the first time since the Budget committees were created more than four decades ago that the sessions have not been held.

"This takes hyper-partisanship to a new extreme and makes a mockery of Republicans’ pledges to restore the regular order" in budgeting, Reid said.

House Appropriations Chairman Hal Rogers (R-Ky.), who will oversee the writing of the 12 fiscal 2017 appropriations bills, immediately dismissed the White House’s spending request.

"The president’s final budget unfortunately doesn’t look much different than other years — it is a spending wish list that doesn’t reflect our real budgetary constraints and that would saddle hard-working Americans with additional taxes and fees," he said in a statement this morning, which went public even before the budget was officially released.

Rogers stressed that he would write the annual spending bills to meet the $1.017 trillion cap on discretionary spending set by last year’s budget deal, a goal backed by the White House, too. He noted that the first committee hearings on the budget begin tomorrow, which includes one on the Nuclear Regulatory Commission.

All told, Rogers expects to hold more than 100 budget hearings and said the committee will mark up the first spending bills in April.

Republicans in both chambers said their goal this year is to avoid a year-end omnibus spending package and send 12 individual appropriations bills to the president for the first time in more than 20 years.

House leaders have stressed the need for an early start given the political conventions this summer and lawmakers’ eagerness to leave for the fall campaign trail. They say the House budget resolution, the chamber’s nonbinding blueprint for writing the spending bills, will be on the floor in early March, about a month earlier than most years.