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Biden EPA, Climate Budget Ask Starts Debate: Jobs Vs. Deficits

April 9, 2021, 6:03 PM

President Joe Biden’s bold spending proposal for the EPA and climate programs could sway skeptical Republicans if it can be framed as a way of juicing the economy, some environmentalists and energy analysts said Friday.

But at least one Republican predicted that Congress’ fiscal hawks probably won’t look kindly on Biden’s expansive view of government spending.

Biden’s proposal for fiscal 2022 contains huge proposed investments that cut against orthodox Republican thought, such as a 21.3% increase for the Environmental Protection Agency and an additional $14 billion for government-wide climate programs.

The tumult wrought by the coronavirus pandemic—along with the massive outlays of congressional spending to alleviate it—also might change Republicans’ minds about using the federal purse to help communities in need, according to Matthew Davis, legislative director at the League of Conservation Voters.

“Community-funded projects are going to be a thing in the appropriations process,” Davis said. “Some people think that that will help get buy-in from more Republicans to advance the budget forward. The dynamics are different than they probably have ever been.”

Energy Innovation

Congressional appropriators routinely ignore presidential budget plans, but the administration is hoping its proposal at least sets an ambitious starting point for negotiations.

Energy innovation is attractive to both Democrats and Republicans, which explains why they passed the Energy Act last year as part of the fiscal 2021 omnibus spending package. That bill contained provisions to promote grid modernization, energy efficiency, and carbon reduction.

“Energy innovation is one of the areas where we’ve seen the most bipartisan cooperation,” said Ryan Fitzpatrick, director of the climate and energy program at the think tank Third Way. “We have launched entire industries—the nuclear industry, the hydraulic fracking industry—that have employed millions of people. So it would stand to reason that these should be areas where there could be agreement.”

Included in the Biden plan is a $10 billion outlay for clean energy innovation. Much of that funding would be steered toward Energy Department programs to enable risky bets that could pay off handsomely.

Technology funding “strengthens the competitiveness of U.S. technology developers and manufacturers,” said David Hart, director of the Information Technology and Innovation Foundation’s clean energy innovation program.

Drew McConville, senior managing director of government relations at The Wilderness Society, added that he sees strong bipartisan support for rebuilding water infrastructure and protecting clean air.

“The question is whether Republicans in Congress will roll up their sleeves and work with the president or jump into their partisan trenches instead,” he said.

Republican Pushback

But significant increases in program funding inevitably have to compete against other appropriations priorities, said Alex Flint, a former Republican staff director for the Senate Energy and Natural Resources Committee.

Biden’s proposed increases “are so significant that it may be impossible to spend new money that fast, which can create carryover and other challenges in subsequent years,” said Flint, now executive director of the Alliance for Market Solutions, which advocates for a carbon tax. “So the appropriators will ask legitimate questions about any program with proposed increases of that scale.”

Flint also took the opposite view of Davis, saying the nation’s $28 trillion debt and structural deficit of over $1 trillion per year makes it “harder and harder to justify substantial new spending” at a time of fiscal pressure.

“A substantial portion of the money the government spends every year is borrowing from future generations,” he said. “At some point there has to be a reckoning where we bring our spending back in line with our revenue. And there will be Republicans who will make that case this year.”

More EPA Spending

At the EPA, Biden’s proposal to spend $110 million on new staffing is sure to hearten overworked agency employees who say their morale was badly damaged by the defection of hundreds of their colleagues during the Trump era.

“Having the administration say, ‘We’re prioritizing that in our budget, and we want to bring in more people’ would be greatly appreciated and a sign to the EPA that the president is paying attention to them and the work they need to do,” said Ann Mesnikoff, federal legislative director at the Environmental Law and Policy Center.

EPA funding has been cut by 27% since fiscal 2010, adjusted for inflation, according to a White House fact sheet.

“Today’s announcement recognizes that science is at the core of all that we do at the EPA and says loud and clear that the EPA is back and ready to work,” Administrator Michael Regan said in a statement.

Although Republican appropriators are almost certain to push back against more money for the EPA, those objections stem from a flawed understanding of what the agency actually does, Fitzpatrick said.

“I think there’s an unnerving misconception that more EPA means more problems, when actually funding and staffing an agency and steering it effectively can get ahead of external challenges and delays that often get blamed on EPA,” he said.

To contact the reporter on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com

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