Jun 25, 2021 - Politics & Policy

The fraught and delicate Beltway climate path

Illustration of Earth balancing on a seesaw sitting atop the Capitol Building
Illustration: Annelise Capossela/Axios

Capitol Hill infrastructure negotiations have taken on a complexity that matches their planetary and political stakes.

Driving the news: President Biden and a bipartisan Senate group yesterday unveiled the bare bones of an eight-year, $1.2 trillion infrastructure package that includes energy and transit provisions.

  • But its fate is tethered to a larger package, with bigger climate investments, that Democrats hope to write and move under the filibuster-proof reconciliation process.
  • "If this is the only thing that comes to me, I’m not signing it. It’s in tandem,” Biden said of the bipartisan plan.
  • House Speaker Nancy Pelosi similarly said the House would only act on it if Senate Democrats can move a reconciliation plan.

Why it matters: Fraught and intricate two-track negotiations will be needed to achieve anything close to the hundreds of billions of climate-related investments — and separate additional tax incentives — Biden first pitched in March.

The big picture: The bipartisan outline, per a White House summary, includes:

  • $73 billion for grid-related measures that would provide the "single largest investment in clean energy transmission in American history."
  • $15 billion for electric vehicle initiatives — including charging and bus electrification — and $49 billion for public transit.
  • $47 billion for "resiliency." That's vague but the White House calls it the largest investment in physical and natural resilience ever.

But, but, but: It omits massive chunks of Biden's and other Democrats' proposals, such as a "clean energy standard," Biden's $174 billion vehicle electrification goal, major spending on new efficient homes and more.

  • "Climate leaders in Congress should reject this deal unless it’s accompanied by a reconciliation bill with bold climate investments," Evergreen Action executive director Jamal Raad said.
  • Progressive lawmakers like Sen. Ed Markey (D-Mass.) have rallied around the "no climate, no deal" slogan.
  • But the challenge for Democrats is that reconciliation also needs to corral moderates while satisfying progressives demanding unprecedented climate investments.

What we're watching: What exactly the White House and Democrats want in energy portions of the reconciliation plans that would also have provisions on child care and other "family infrastructure."

  • For instance, Biden yesterday discussed $300 billion in tax incentives. He didn't get specific.
  • The White House has previously proposed new tax credits for transmission, extended renewable power credits and expanded EV purchase incentives.

A note from Capital Alpha Partners' James Lucier lays out the many hurdles for the bipartisan and Democrats-only efforts.

The big picture: One question, he notes, is whether Democrats can even agree among themselves on a top-line budget resolution that enables the subsequent reconciliation effort.

  • "We don’t think the House and Senate can pass the $6 trillion outline that Senate Budget Committee Chairman Bernie Sanders...has been floating," he notes.

And with respect to the bipartisan infrastructure framework, "Republican Senators are not going to be interested in a deal that assumes the rest of the president’s agenda moves on budget reconciliation."

Go deeper: Infrastructure's remaining potholes

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