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Hill Climate, Infrastructure Debate Remains Unsettled Amid Competing Calls

March 17, 2021

The emerging Capitol Hill debate on a sweeping infrastructure investment bill with significant climate change-related provisions remains unsettled as the Biden administration and majority Democrats face competing requests on key decisions affecting the broad contours and scope of the package.

Such questions -- about how much funding to devote to multiple economic sectors, the extent to which investments are “paid for,” and whether any bill can achieve sufficient Republican support to avoid use of special budget “reconciliation” procedures -- remain unanswered as Biden officials and Democratic leadership have not advanced a comprehensive proposal for an infrastructure bill.

Lawmakers and others have floated a broad array of possible climate- and energy-related provisions that could eventually be included in a bill, even as it remains unclear how much of the bill would be dedicated to such issues while also addressing transportation, the water sector, broadband and other categories:

Democrats Expand Clean Energy Funding In Revised Infrastructure Bill

House Energy & Commerce Committee Democrats are expanding clean energy funding authorizations in a revised infrastructure bill compared with a prior version of the legislation introduced in the last Congress, offering the latest sign lawmakers are gearing up to develop a sweeping infrastructure package.

A March 11 proposal from the House Energy & Commerce Committee, dubbed the LIFT America Act, includes over $100 billion in clean energy-related funding compared with less than $40 billion in a similar measure floated in 2019.

These provisions include $69.9 billion in clean energy and efficiency funding for priorities including resiliency of the grid and public facilities; deployment of new technologies that reduce emissions; and energy efficiency.

Another $41.8 billion would be directed toward electric vehicle infrastructure, clean ports and “smart communities,” including $12.5 billion to bolster domestic manufacturing of batteries and other plug-in vehicle technologies.

Committee Democrats earlier this month also introduced a sweeping climate change bill -- including national greenhouse gas targets for the power sector and the broader economy -- with observers suggesting that at least portions of the measure could be enacted as part of an infrastructure deal.

Further, Democrats are hoping to bolster tax credits for a range of low-carbon technologies, with lawmakers and some Hill staff expressing early optimism about reaching a bipartisan agreement on that issue, which could also be included in an infrastructure bill:

Key Hill Officials Express Optimism On Bipartisan Clean Energy Tax Deal

Lawmakers and Capitol Hill staff from both parties are expressing early optimism on reaching a bipartisan agreement on tax incentives for clean energy, including a push by a key Democratic senator to craft a technology-neutral tax credit based on reducing carbon emissions.

“There’s a desire of a lot of members to accomplish these issues on a bipartisan basis,” said David Bridges, tax counsel for Rep. Tom Reed (R-NY), during a March 10 event.

But he added that “a lot depends on how the conversation is shaped here over the next few months,” citing recent statements from House Budget Committee Chairman John Yarmuth (D-KY) that Democrats might resort to advancing an infrastructure bill using budget reconciliation procedures that avoid a Senate filibuster, the same process Democrats used for the just-enacted coronavirus relief package.

On the tax debate, lawmakers must still work through several thorny issues, including whether to include certain technologies such as energy storage and transmission, whether such incentives would be “refundable,” or whether certain entities such as public power companies can directly claim credits.

More broadly, Republicans on the Energy & Commerce Committee are previewing a partisan fight over climate policy, releasing a package of nearly 20 measures they argue are a more sensible way to address climate change compared with heavy-handed mandates from the Democrats:

Partisan Fight Looms At Hearing Over House Clean Energy Proposals

Democrats and Republicans on the House Energy and Commerce Committee have issued separate proposals for promoting clean energy, setting up a major partisan fight over implementing the Biden administration’s sweeping climate agenda at a hearing later this week.

“Our plan is a much better agenda to protect the environment, jobs, and our national security than their unworkable pie-in-the-sky mandates that will halt economic opportunities for millions of Americans,” committee Republican leaders said in a statement announcing their counter proposal.

House Speaker Nancy Pelosi (D-CA) has directed committee chairs to develop plans for an infrastructure and jobs debate that is expected to begin in earnest next month.

Pelosi, Biden administration officials and a key moderate Senate Democrat have said they want the infrastructure plan to move on a bipartisan basis, following passage earlier this month of a COVID-relief package on party-line votes.

Others, including Senate Majority Leader Chuck Schumer (D-NY) and Budget Committee Chairman Bernie Sanders (I-VT), have floated the possibility of using reconciliation again for the infrastructure measure.

Reports suggest Democrats are eying a bill that could approach $4 trillion, though there is pressure to ensure that at least part of the bill is “paid for” with increased taxes or fees, rather than relying solely on deficit financing.

Such budget discipline is pitched as an effort to attract Republican support, though Democrats’ preferred financing tools -- reversing Trump-era tax cuts for corporations and the wealthy -- would likely repel Republican lawmakers.

House Ways & Means Committee Chairman Richard Neal (D-MA) is among those pushing for a deal with Republicans on energy-related tax policy, according to a recent report from CQ Roll Call.

“I would prefer that there not have to be a next reconciliation bill, I would prefer that the regular order be adhered to," he said. “I’m open to the renewables for sure, but again I think that on the energy front I think we can attract some Republicans. I mean, who would be against expanding tax credits for power storage, batteries, things like that? There are a series of things that you can do that are short of you having to use reconciliation.”

The report also quoted Transportation & Infrastructure Committee Chairman Pete DeFazio (D-OR) saying he does not want to advance public works legislation via reconciliation, largely because many policy items would be barred under Senate rules that focus such bills on budget- and tax-related provisions.

Yet, Politico reported Sen. Ben Cardin (D-MD), in a “hot mic” comment, told Transportation Secretary Pete Buttigieg that “ultimately,” an infrastructure package is “going to be put together similar” to the coronavirus bill, and that Republicans will only “meet with you to a point.”

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