Republicans to reveal, debate reconciliation text
House Republicans are gearing up to defend their budget reconciliation legislation against Democratic attacks in markups over the next few weeks. A new fee on electric vehicles and hybrid cars is on the table.
House Republicans are putting pen to paper for their massive party-line bill and are beginning to unveil some of the text ahead of a crucial markup sprint that begins this week.
Republican committee chairs will spend much of the next three weeks shepherding their portions of the tax, energy, defense and immigration package out of their committees with the goal of getting the final legislation to President Donald Trump’s desk before the end of May. It’s a deadline that may very well slip.
The Oversight and Governmental Affairs Committee appears to be the first to unveil text. Language from that panel would roll back federal employee pension benefits to save billions of dollars. Text from the Homeland Security Committee includes millions for presidential home security reimbursements to local police. And the Transportation and Infrastructure Committee may create a fee on electric and hybrid vehicles, POLITICO reported.
“The timeline to get this done is as quick as we can get it done,” House Majority Leader Steve Scalise (R-La.) recently told reporters. “President Trump, as you know, he’s not somebody that wants to wait around for months.”
Republicans want to pass their megabill through the budget reconciliation process, which allows the majority party to skirt the Senate filibuster and approve budget-related policies by a simple majority.
The effort won’t be easy. The goal of passing the $4.5 trillion bill in the House and Senate before Memorial Day is ambitious, and Republicans are still finalizing the most complicated and politically perilous portions of the package. That includes sections that could include rollbacks of environmental regulations and clean energy tax credits.
Indeed, the upcoming markup spree will see Republicans spell out some of their most substantive energy and environment plans this Congress. The effort will serve as the foundation for potentially sweeping changes to the government’s work on renewables, public lands and climate change.
Republicans have said they want to use reconciliation to repeal or reform clean energy tax credits from the Inflation Reduction Act, undo certain climate rules, open up federal lands for more mining and fossil fuel production, and potentially sell off small parcels of public lands.
“There’s so much that needs to be cut that they’re really going under the couch cushions here looking for stuff,” said Heather Reams, president of the center-right Citizens for Responsible Energy Solutions.
Democrats, meanwhile, are promising an aggressive fight against the Republican proposals and are expected to force enough debate to drag some of the markups on for more than a day.
The House and Senate adopted a budget blueprint earlier this month that tasks committees with finding billions of dollars in cuts or new revenues in order to pay for a permanent extension of the 2017 tax cuts and a host of border security and defense provisions.
House committees with relatively lighter and less complicated reconciliation instructions will hold their markups this week. The Transportation and Infrastructure Committee is aiming to meet Tuesday, along with Homeland Security and Armed Services.
The Financial Services and Judiciary committees are eyeing Wednesday markups, according to POLITICO, along with the Oversight and Governmental Affairs Committee.
The real fireworks could begin next week, when some of the House committees with more complex instructions hold their meetings.
Natural Resources is expected to go May 6. Energy and Commerce is planning to begin its markup May 7, according to people familiar with the planning. The Agriculture Committee could also hold its markup next week, POLITICO reported.
The House Ways and Means Committee, which will oversee changes to the Inflation Reduction Act’s tax credits, is eyeing a markup as soon as May 12 and 13, POLITICO reported. Congressional leaders, tax policy chairs and administration officials are set to keep meeting on a tax plan for the reconciliation package.
Senators will consider the House’s plan after it clears the lower chamber and may send it back with changes.
Energy, environment fights ahead
The Energy and Commerce markup is expected to be the most heated of all. Democrats have made Republicans’ potential reductions to Medicaid coverage a core part of their messaging against the reconciliation bill and are certain to push back hard against environmental policy changes under the committee’s purview.
The panel, which has jurisdiction over Medicaid, needs to find at least $880 billion in cuts, and Republican leaders have said they plan to target climate programs to try to avoid deep slashes to health care. Republican leaders say they will not cut Medicaid beyond rooting out waste and fraud.
The markup is expected to last at least two days, according to two people familiar with the planning who were granted anonymity to discuss ongoing deliberations.
One person said Democrats are expected to pursue enough debate to break the record for the longest Energy and Commerce Committee markup ever, which was set at 27 hours in 2017 when lawmakers argued over Republicans’ health care-related reconciliation bill. The other person said a time limit on Democrats’ potential debate plans “does not exist.”
The offices of Chair Brett Guthrie (R-Ky.) and ranking member Frank Pallone (D-N.J.) did not respond to questions about the upcoming markup.
Democrats are all but certain to protest Energy and Commerce Committee leaders’ stated plans to roll back certain climate regulations such as the fee on methane emissions that Democrats included in the IRA and EPA’s tailpipe emissions rule, which Republicans call an “EV mandate.”
Some Energy and Commerce Republicans have floated the possibility of targeting clean energy and climate grants from the Department of Energy and EPA, but they haven’t said which ones. It’s also not clear that the effort would pass muster under the strict rules of the reconciliation process.
The Natural Resources Committee’s markup will be centered around Chair Bruce Westerman’s plans to generate more than $1 billion in offsets by selling new leases for fossil fuel production, boosting mining and potentially selling off small parcels of public lands.
“We got a whole swath of ideas on energy and ways to generate revenue,” said the Arkansas Republican.
Democrats, led by ranking member Jared Huffman (D-Calif.), will push back hard on those proposals. Recent committee markups on legislation focused on critical mineral production, endangered species and the administration’s renaming of the Gulf of Mexico have turned into highly partisan affairs.
Some lawmakers on both sides of the aisle want to use reconciliation to reform the permitting process for energy and infrastructure projects, but that appears unlikely.
Tax credit debate looming
While those markups take place over the next two weeks, businesses, lobbyists and advocates will be waiting eagerly to see what the Ways and Means Committee decides to do later in May about the clean energy and manufacturing tax credits from Democrats’ 2022 climate law.
The White House this month assured conservatives in Congress that it would work with congressional leaders to scrap those subsidies. And last week, Energy Secretary Chris Wright shared his thoughts on Fox Business, saying “Congress controls the purse strings. I personally hope all subsidies for all kinds of energy get ended.”
But growing numbers of Republicans are coming out in favor of a more measured approach, and GOP leaders who once called for a full repeal of the law’s climate-friendly incentives have since softened their stance somewhat. Republicans need near-unanimous support within their party to pass the reconciliation bill.
Ways and Means Chair Jason Smith (R-Mo.) said last month on CNBC that his committee is working on “balancing the individuals who have certain green energy tax credits that they strongly support versus those who just want to rip them out by the roots.” He added, “It has to be a constant balance.”
Observers generally expect that the tax credits that enjoy the most bipartisan support could ultimately be spared. Some Republicans have expressed significant support for the advanced manufacturing production tax credit known as 45X and the technology-neutral production tax credit for clean electricity known as 48Y.
The American Petroleum Institute has lobbied Republicans to preserve the clean fuel production credit known as 45Z, the carbon capture utilization and storage credit known as 45Q and the clean hydrogen production credit known as 45V, according to a spokesperson for the group.
“There’s public and private recognition of all the jobs and all the investment that’s coming back as a result of these credits, and not wanting to throw those away and basically wave the white flag of surrender to China,” said Zach Friedman, senior director for federal policy at the sustainability group Ceres.
Many of the tax credits could be altered rather than repealed to prevent negative market impacts for businesses that rely on them. That could involve new sunsetting provisions, caps on spending and stricter eligibility requirements.
“A lot of these questions are not necessarily going to be binary, meaning it’s not like, ‘Do we keep it as is, or get rid of it?’” said Jeff Navin, a partner at the consulting firm Boundary Stone Partners. “A lot of things are going to be changed.”
By: Andres Picon
Source: E&E NEWS By POLITICO
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