Congress returns this week with President Biden’s social spending and climate package hanging by a thread after Sen. Joe Manchin threw the effort into chaos last month.
How the Senate responds to the West Virginia Democrat’s blockade will be the question of the year as more than $1.7 trillion — including a record $555 billion for climate-inspired initiatives — hangs in the balance.
Democrats have vowed to return to negotiations following Manchin’s public proclamation that he would oppose the reconciliation package as currently constructed.
“Let’s go back to the table, let’s get this done, it is too important for us,” Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, said on MSNBC’s "Sunday Show" with Jonathan Capehart.
Last month, a frustrated Jayapal called on the president to use his executive powers to secure policies on climate and other priorities, but there has been a growing consensus around salvaging "Build Back Better."
Senate Democrats intend to force a vote on the package this month to put lawmakers on record, Majority Leader Chuck Schumer (D-N.Y.) announced in late December (Greenwire, Dec. 22, 2021).
That vote is expected to fail, but may serve as the catalyst for renewed efforts on the package. Over the holiday break, multiple Democrats said they remained confident that the bill would pass, though in reduced form.
Jayapal said yesterday her goal was to dial back the bill to the framework negotiated over the summer by multiple players, including Manchin.
“What we hope now, and what I know the president is working on with Sen. Manchin, is to go back to the original framework that he committed to,” she said.
Jayapal argued that only a few provisions, “maybe 10 percent” of the House-passed bill, H.R. 5376, were things he hadn’t agreed to.
“He also agreed to the provisions around climate change,” she said. “Those were already negotiated from what we had originally wanted,” but she said she still considered them “a significant investment on really taking on climate and reducing carbon emissions.”
Here’s a breakdown of four scenarios for how Congress could proceed:
1. Go small
Schumer and House Speaker Nancy Pelosi (D-Calif.) both made clear late last year that efforts to pass the "Build Back Better Act" would continue into 2022. That might very well mean negotiating a smaller package.
Democratic leaders and the White House have already twice scaled back their ambitions: from $6 trillion to $3.5 trillion, then down to $1.7 trillion. While liberals groused about the myriad concessions that had to be made to accommodate smaller price tags, Senate Budget Chair Bernie Sanders (I-Vt.) and Jayapal were ultimately happy to tout the significant policy gains that would be achieved in the compromise bills.
If top negotiators are able to work with Manchin on a bill closer to his original $1.5 trillion ballpark, there’s a not impossible scenario in which Sanders, Jayapal and their allies would continue to stand by that even smaller bill for the good of the party, boasting it would still make historic investments in climate and social welfare spending.
Environmental advocates, too, would likely be hard-pressed to publicly complain about legislation that would still spend a record number of dollars fighting the climate crisis, even if the climate portion of the overall reconciliation bill is whittled below the current $550 billion mark.
At the same time, making cuts to the existing legislation is going to be a grueling, painful process, and there’s no guarantee lawmakers will be able to find satisfactory compromises in a 50-50 Senate and a House in which Democrats only enjoy their majority by a three-vote margin.
In the climate space, the first cuts could go to programs addressing natural solutions to combat climate change, like funding for coastal resiliency and wildfire mitigation on public lands.
Interior Department initiatives were originally going to be excluded entirely from the reconciliation bill until lawmakers and advocates fought to have that funding reinstated, a sign that the chief negotiators consider these line items expendable when stacked up against programs that would directly reduce emissions.
A final showdown could also take place around the imposition of a methane fee, which Manchin opposes as a punitive “natural gas tax” during a period of high inflation he has blamed for his opposition to advancing the larger, more expensive bill (E&E Daily, Dec. 21, 2021).
2. No deal
Even for Democrats vowing to return to negotiations in the new year, Manchin’s opposition may be too much to overcome.
That could mean no deal at all ahead of the 2022 midterm elections, and the bill’s demise. Most prognosticators see Democrats losing seats in the House in November, imperiling their majority there. The Senate is likewise considered in danger for the party.
Outside the climate portions of the package, Manchin has still not consented to allowing an expansion of the child tax credit. Excluding that provision is considered a dealbreaker for many Democrats. And even though Jayapal discussed compromise yesterday, progressives have also been cool to keep shrinking the bill.
Manchin has been upfront about his concerns about the package, especially as it relates to inflation and the national debt. Those concerns are unlikely to ease in the first weeks of 2022, which could further entrench the Energy and Natural Resources Committee chair.
Bad blood between Manchin and White House staff may also prove problematic. Manchin allies have blamed leaks from the White House and its decision to blame him for the bill’s delay as souring the senator to the entire budget reconciliation effort. Burnt bridges need to be repaired.
Manchin was direct in his criticism of "Build Back Better" and deployed GOP talking points. The White House responded by accusing the senator of breaking his word. But both sides seem to have cooled that heated rhetoric after Manchin and Biden talked via phone before Christmas, according to POLITICO.
Still, Manchin’s statement of opposition specifically targeted the climate portion of the bill as a key hurdle to his support. As part of that statement, he cited a fear that the bill’s provisions could disrupt grid reliability.
“If enacted, the bill will also risk the reliability of our electric grid and increase our dependence on foreign supply chains," he said. "The energy transition my colleagues seek is already well underway in the United States of America."
Manchin already killed a key policy to address climate change, the Clean Electricity Performance Program, and he has publicly raised doubts about electric vehicle tax credits and charging grants.
Even if the White House can get Manchin on board again, Sen. Kyrsten Sinema (D-Ariz.) also remains a wild card. And some of Manchin’s goals, including raising taxes on the rich, have encountered Sinema’s veto. The right balance could prove difficult to find.
3. Climate breakout
Some Democrats have suggested salvaging the situation by breaking the "Build Back Better Act" into chunks. That would mean separating the $555 billion in climate spending from the rest of the package and passing it individually.
Sen. Ed Markey (D-Mass.) suggested the strategy just hours after Manchin announced his opposition to the full legislation earlier this month.
In theory, that has some appeal. While Manchin’s objections to certain climate provisions sent a shudder through the green advocacy community, most observers think he would be amenable to a climate bill with some tweaks to satisfy his concerns.
Manchin had been negotiating with Environment and Public Works Chair Tom Carper (D-Del.) on the bill’s methane fee, but that matter was not seen as a hurdle to the clean energy tax credit expansions that make up the bulk of the climate spending.
But for now, there appears to be little appetite among Democrats for a breakaway package. For one, it seems impossible the party could get enough Republicans to join them in the effort.
Democrats could have multiple opportunities this year to pass legislation through budget reconciliation, the process they are using to skirt the Senate filibuster, meaning they could do more than one package on a party-line vote.
But process is time consuming, and Manchin has said repeatedly that he agreed to move forward with the current budget reconciliation effort to undo part of the Republicans’ tax reform law. He has also been reluctant to set policy along party lines.
"In the last two years, as Chairman of the Senate Energy and Natural Resources Committee and with bipartisan support, we have invested billions of dollars into clean energy technologies so we can continue to lead the world in reducing emissions through innovation," Manchin said in his December statement.
4. Spending bills
If climate legislation can’t move via the reconciliation package, lawmakers are likely to rely on the annual spending bills to bulk up agencies’ work on Democratic energy and environmental priorities.
Congress is currently working on an omnibus spending package for fiscal 2022, with a goal of finishing by Feb. 18 when current stopgap funding expires.
Under proposed fiscal 2022 spending bills, lawmakers are already eyeing record investments in clean energy research at the Energy Department, major increases in climate work across the government, and adding 1,000 workers at both EPA and Interior Department.
While the spending bills are not on the scale of the hundreds of billions of spending proposed in the "Build Back Better" legislation for climate, they could provide new money for environmental justice programs, a Civilian Climate Corps and resiliency.
Democrats and Republicans, however, have been unable to agree on overall spending levels. Democrats are pressing for record discretionary spending levels for domestic agencies and only modest increases for national security agencies. Republicans say both need to be raised equally.
After weeks of little negotiation, top appropriators in mid-December began weekly meetings on the omnibus — a sign they are eager to find a deal. But it remains to be seen if in a polarized Congress compromise is possible.
“I hope it will help advance the process,” Senate Appropriations Chair Patrick Leahy (D-Vt.) said. "The alternative to completing the appropriations process is a full-year continuing resolution, which does not serve the American people and locks in outdated spending priorities.”
An appropriations failure would be another blow for the Democrats’ agenda on climate and other issues. That’s why Republicans have been open to level spending for the rest of the year.