Environment & Energy Report

Democrats See Opening for Climate in Tax Extenders, Highway Bill

May 6, 2019, 9:00 AM

Senate Democrats vowed in March that they would try to inject climate change across any and all legislation they could that needs 60 votes.

They are likely to score their biggest victories in two must-pass bills in the 116th Congress: a tax “extenders” package, in which they hope to negotiate broaden credits to offshore wind and battery storage, and the next highway bill, where Democrats will push low-emissions transportation technologies and ways to make the nation’s transportation network more resilient to climate change.

Tax extenders refer to the tax credits that lawmakers have to renew every few years.

A prospective tax extender package or a highway bill are a long way from being signed into law—the highway bill, for one, need require reauthorization until September 2020—but the climate issue hovers over both. Senate Democrats want to find ways that they, as a minority party, can involve climate wherever possible.

Sen. John Barrasso (R-Wyo.), who will help shepherd the highway measure in the Senate, says to expect some climate provisions, even if they aren’t labeled as such, in a bill he hopes to move through the Environment and Public Works Committee this summer.

“We’ll see on specifics. There will be climate items in the bill,” said Barrasso, the committee’s chairman. “I’d like to get it out of committee before the August recess.”

Democrats will likely raise clean energy and climate issues in the long-promised infrastructure package, which is separate from the highway bill. The infrastructure package got a boost from President Donald Trump and Democratic leaders in recent days, although it isn’t clear how they will pay for its $2 trillion price tag.

‘You Could Add That’

“Depending on how you handicap the likelihood of an infrastructure bill, you could add that” to the list of bills that could carry climate provisions, said Sen. Brian Schatz (D-Hawaii), who was tapped in March to chair a thus far Democrats-only Special Committee on the Climate Crisis to push the climate issue. Expect climate change also to be raised in many of the 12 annual appropriations measures, he said.

“Here is a way to look at this: This is an urgent matter and it impacts every executive agency,” Schatz told Bloomberg Environment. “So anytime we do a funding bill, there has to be a climate aspect, and especially as we do physical infrastructure.

“We would be out of our minds not to try to build resilience for climate change and enable a transition to a clean energy economy.”

Republican calls for tweaks in the 2017 tax package, some of them technical fixes, also could be an opportunity to put clean energy tax credits on the table, Schatz said.

With Republicans in control of the Senate by a 53-47 margin, there are limits to what Democrats can do to move their climate proposals. Democrats’ endorsement can be crucial when moving most legislation, which still requires 60 votes to end a filibuster threat.

Battle Looms on Tax Extenders

Tax extenders include many with broad bipartisan support and some—such as for biodiesel and short-line rail maintenance by railroad companies—that have expired.

Senate Democrats say their price for moving tax extenders could include expanding clean energy tax credits to offshore wind and energy storage, including battery technologies, and tweaks in the existing credits for electric vehicles. They also will challenge Republicans who have been pledging support for a technology innovation approach to climate change to make good on those vows.

“I do think that on tax extenders there’s going to be bipartisan support for a lot of the new innovative technologies that the Republicans claim to support,” said Sen. Sheldon Whitehouse (D-R.I.), who wants tax credits for electric vehicles extended and expanded.

The path forward for tax extenders, as well as deals on clean energy credits, will likely be a bigger must-pass package, perhaps in negotiations for fiscal 2020 spending for federal agencies, he said.

“And clearly, on an infrastructure bill or a highway bill, whatever happens there is going to be enormous opportunities not only for dealing with things like EV charging infrastructure, but also for dealing with responding to climate change, like worrying about Amtrak along the sea coast in places that are going to be overwhelmed by sea-level rise,” Whitehouse said.

Senate Finance Chairman Chuck Grassley (R-Iowa) said there is plenty of support for moving tax extenders, including backing by the committee’s top Democrat, Oregon Sen. Ron Wyden, but there also are plenty of obstacles, including House insistence that such extensions be paid for.

“Wyden and I have taken the position together that when you extend existing tax law—now if there are any changes, this wouldn’t apply—but just existing tax law, you don’t need offsets,” Grassley told Bloomberg Environment.

“The House of Representatives has a different view on that,” Grassley said. “So we’ll just have to work that out.”

Broadening Senate Climate Support

Some Republicans bristle at the notion that Democrats can make a significant dent in the climate issue through such piecemeal approaches.

“I think that is one avenue,” said Sen. Lisa Murkowski (R-Alaska), chairman of the Senate Energy and Natural Resources Committee. “But I think if we are really going to be addressing this in a way that is pretty robust, you’re not going to be able to do this in a highway bill.”

“I kind of have taken the perspective on this that it really has to be a whole of government view when we think about ways that we can address adaptation, mitigation, the impacts as we’re dealing with them,” said Murkowski, who this year began holding the first broad climate hearings in years in the Senate since the Republican takeover in 2015.

While Democrats also have struggled to get Republicans to back any significant climate measures in Congress, Senate Democrats are hoping the launch of their new select committee will broaden their message to Democrats who aren’t on the forefront of pushing the issue in Barrasso’s environment committee or the Senate energy committee.

They include Sen. Tammy Duckworth (D-Ill.), a Senate Armed Services Committee member who has backed shoring up military installations threatened by sea-level rise, as well Defense Department investments in biofuel technologies.

“I am actually approaching it from the DOD side of things—there are over 100 military installations that are in danger of being under water due to climate change,” she said.

Advanced battery technologies is another priority that could pay dividends not only on climate but helping U.S. soldiers who rely on portable power for night vision goggles and other technologies, Duckworth added.

To contact the reporter on this story: Dean Scott in Washington at dscott@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Jean Fogarty at jfogarty@bloombergenvironment.com; Rob Tricchinelli at rtricchinelli@bloombergenvironment.com

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