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Democratic leaders are racing to finalize a revised proposal to address climate change and jump-start the nation’s clean energy transition, part of a larger sprint to reach a deal with Sen. Joe Manchin III (DW.Va.) on their stalled budget for expenses this month.
The heated discussions reflect weeks of private talks between Senate Majority Leader Charles E. Schumer (DN.Y.) and Manchin, a centrist who scuttled negotiations on the party’s last attempt at a broader spending package in December. A climate deal would help the country meet President Biden’s ambitious clean energy goals, even as Manchin pursues policies that still promote fossil fuels.
While top aides to Manchin say they are far from a deal, some Democrats still hope to finalize a revised climate proposal as soon as next week, when lawmakers are due to return from recess, according to two people familiar with the matter who spoke on condition of anonymity because they were not authorized to comment publicly. Party leaders have already held advanced discussions with West Virginians about the costs of fighting climate change, including how to limit emissions of methane, a powerful planet-warming gas, the people said.
Last year, Democrats proposed a tax on methane emissions from oil and gas companies as part of their ill-fated legislative package known as the Build Back Better Act. But Manchin expressed concern about the fee, saying it would duplicate regulations proposed by the Environmental Protection Agency. democrats are now working with Manchin on a potential solution that would exempt companies from the methane tax if they comply with EPA regulations once the rules are finalized, the two people familiar with the matter said.
The people cautioned that lawmakers and their staff are still debating the idea and that no final agreement has been reached on methane — or the rest of their climate agenda. Over the past year, Democrats have repeatedly thought they were close to reaching an agreement with Manchin, only to see the talks collapse at the last minute due to misunderstandings, misunderstandings and continued policy differences.
“Suggestions that a reconciliation deal is close are false,” Sam Runyon, a spokesman for Manchin, said in a statement. “Senator Manchin still has serious outstanding concerns, and much work needs to be done before it is possible to reach a deal that he can sign.”
Justin Goodman, a spokesman for Schumer, said any mention of a final deal was “speculation,” adding, “We continue to have productive conversations.”
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But Senate Environment and Public Works Chairman Thomas R. Carper (D-Del.), whose panel has jurisdiction over the methane tax, believes the potential compromise will ensure that companies reduce their methane emissions regardless of EPA regulations. familiar with the matter I said. Since then, finding a legislative solution to the problem has taken on added importance last week, the Supreme Court limited the EPA’s authority to limit greenhouse gas emissions from power plants.
The haggling over climate regulations comes as Democratic leaders finalized a plan to lower prescription drug prices for seniors, signaling progress on another key pillar of their economic agenda. Under the plan, the federal government would for the first time be allowed to negotiate the price of certain drugs on behalf of Medicare beneficiaries. Some party lawmakers saw the development as crucial to crafting a broader package that could go to the Senate floor as soon as late July, a timeline Schumer previously outlined to his caucus.
But a wide range of questions – about the package’s size, scope and cost – remain up for debate.
On climate, for example, Democrats are still arguing with Manchin over a tax credit for electric vehicles. The West Virginia lawmaker expressed concern that the tax incentives could be a giveaway to wealthy Americans who buy expensive electric cars. While the issue has not been resolved, a potential compromise could include a “means test” in which the tax credit would be limited to consumers who earn below certain income thresholds.
Another unresolved issue concerns a set of tax credits for producers of clean energy from sources such as wind and solar. Manchin indicated he would not support a spending bill that includes what is known as direct pay, where payments are sent directly to companies that produce clean energy for consumers. A potential compromise could include limiting eligibility for direct payments to nonprofits, according to a person familiar with the matter.
The total cost of the climate and energy provisions in the spending bill could be about $300 billion to $350 billion, though the amount will change as negotiations continue. That pales in comparison to the $555 billion climate package in an earlier version of the bill that passed the House last year.
Manchin argued that such spending could increase the national debt and worsen inflation as prices skyrocket. But the smaller amount under environmental programs may be difficult for some liberal lawmakers in the House, who see the measure as their last chance to pass robust climate legislation before this fall’s midterm elections, when Republicans could wrest control of Congress.
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