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Rep. Stephanie Murphy. Photo: Chip Somodevilla/Getty Images/Bloomberg via Getty Images

House Democrats discussed with President Biden on Wednesday a plan to exempt billions of dollars of new climate spending from his requirement that his $3.5 trillion "soft" infrastructure plan be offset with additional revenue.

Why it matters: The accounting proposal — a version of "dynamic scoring" — would dramatically lower the amount of taxes Democrats would need to raise while creating wiggle room to increase the ultimate size of the package.

  • The bill's final size will depend on two factors: How much in new taxes the centrists in both chambers can stomach, and how much creative math lawmakers are willing to use to justify the budget reconciliation bill's price tag.
  • The maneuver under discussion has the potential to break a series of logjams involving progressives and centrists in the House and Senate.

What they're saying: "I'm a proponent for ensuring that the climate provisions within the reconciliation bill aren't subject to being paid for," said Rep. Stephanie Murphy (D-Fla.).

  • She was among the centrist lawmakers who met with Biden on Wednesday afternoon.
  • Murphy told Axios she "led" her White House remarks by suggesting that climate provisions should be exempt from “the president's desire to ensure that the entire bill is paid for.”
  • Democrats are arguing that the financial cost of inaction on climate will be so high — from paying for flood to forest fire recoveries — that they don't need to raise taxes to cover their green proposals.

The big picture: The Democrats' approach to climate spending is a version of the Republicans' argument that tax cuts pay for themselves, once economists factor in so-called dynamic scoring.

  • The theory is that any lost revenue from tax cuts is less than the higher overall tax receipts generated from a booming economy.
  • The challenge is dynamic scoring rarely produces the amount of revenue advocates predict.
  • Democrats long opposed the practice but embraced it to help justify the cost of the $1.2 trillion bipartisan infrastructure package that received both Republican and Democratic support in the Senate.

Go deeper: Democrats in both chambers are now willing to try the same concept with climate change.

  • “It's not like you apply dynamic scoring to everything,” Sen. Tim Kaine (D-Va.) told Axios. “But there are climate investments we could make that would not only bring down costs to society but would also bring down costs within the federal budget.”
  • With green projects, it’s difficult to calculate precisely how much hypothetical money might be saved, but some estimates put the health costs of climate change at $800 billion a year.

The other side: Republicans scoff at the notion climate spending will pay for itself.

  • "They really don't want to offset anything," said Sen. Ron Johnson (R-Wis.).

By the numbers: In the House Way and Means Committee's version of the $3.5 trillion bill, there are some $273 billion in tax credits to achieve Biden’s climate goals.

  • There's also an additional $150 billion for a Clean Electricity Payment Program in the Energy and Commerce Committee's wider package of climate provisions.
  • Finally, the Transportation and Infrastructure Committee voted for $715 billion in new spending for everything from traditional roads to zero-emission vehicles and high-speed rail.
  • If Democrats agree that none of that spending needs to be offset, that could lower the final tax requirement by hundreds of billions of dollars.

Go deeper: "Where the alarming economic damage stat in the new climate report came from"

Go deeper

Not enough votes for corporate tax hike, Biden says

President Biden speaks at the Electric City Trolley Museum in Scranton, Pennsylvania. Photo: Hannah Beier/Bloomberg via Getty Images

Democrats don't have the votes to raise corporate taxes, President Biden admitted at Thursday's CNN town hall in Baltimore, Maryland, where he went into detail on the state of negotiations concerning the massive reconciliation bill.

Why it matters: Democrats are still negotiating what will go into the bill. Divisions within the party have stalled the legislation for weeks.

Fossil fuel executives to testify at "landmark" hearing focused on climate disinformation

An oil flare at a BP plant in Whiting, Indiana. Photo: Luke Sharrett/Bloomberg via Getty Images

The House Committee on Oversight and Government Reform announced on Friday it will hold a "landmark" hearing next week with fossil fuel executives focused on the industry's role in spreading climate disinformation.

Why it matters: This is the first time oil company CEOs, and the head of their main trade group, will testify under oath about their knowledge of the link between burning fossil fuels and climate change, per Axios' Andrew Freedman.

Scoop: “How about zero?” Manchin, Sanders get heated behind closed doors

Sen. Joe Manchin. Photo: Tom Williams/CQ-Roll Call via Getty Images

Sens. Joe Manchin (D-W.Va.) and Bernie Sanders (I-Vt.) squabbled behind closed doors Wednesday, with Manchin using a raised-fist goose egg to tell his colleague he can live without any of President Biden's social spending plan, Axios has learned.

Why it matters: The disagreement, recounted to Axios by two senators in the room, underscores how far apart two key members remain as the Democratic Party tries to meet its deadline for reaching an agreement on a budget reconciliation framework by Friday.