Democratic lawmakers may have to scrap the most aggressive emissions-reduction initiative in American history from their massive budget bill. Sens. Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona have told President Joe Biden they refuse to support his climate agenda, forcing negotiations for the $3.5 trillion Build Back Better bill to a halt, people familiar with the matter said in interviews with the New York Times, Washington Post, and Wall Street Journal.
“We’re getting down to the hard spot here,” Biden told reporters Friday in reference to ongoing negotiations, the Associated Press reports. “We’re at this stalemate at the moment.”
“It’s just going to take some time,” he continued, warning that this political back-and-forth could very well drag on to the end of the year.
During a speech at a childcare center in Hartford, Connecticut, Biden expressed doubts that the comprehensive social spending and climate policy bill, which is said to include two years of free community college, mandatory parental leave, and universal prekindergarten, among other measures, will make it through Congress despite overwhelming support from many Democratic lawmakers.
“To be honest with you, we’re probably not going to get $3.5 trillion this year; we’re going to get something less than that. But I’m going to negotiate,” he said.
Democrats need unanimous support to push their Build Back Better bill through Congress using a process known as reconciliation, which means it wouldn’t need any Republican votes to pass. At issue is the Clean Energy Performance Program, a $150 billion clean electricity initiative included in the bill that aims to drastically reduce greenhouse gas emissions over the next decade. The program would reward utilities that increase their clean energy supply by 4% each year while also punishing those that fail to meet this threshold. The Times characterized it as the “muscle” behind Biden’s climate agenda, which ultimately aims to halve America’s carbon emissions by 2030.
Modeling by Energy Innovation, a climate policy shop, found the program is crucial to “achieving deep power sector decarbonization.” Without it, their analysis shows carbon pollution will be anywhere from 250 up to 700 million metric tons higher. The high end is equivalent to the annual carbon emissions of 150 million passenger cars.
Standing in the way is Manchin, a centrist Democrat in the pocket of West Virginia’s coal and oil industries. Utilities have been his seventh-largest overall donor by industry, and he is the second-largest recipient of utility money in the Senate thus far for the 2022 election cycle (just behind Majority Leader Chuck Schumer). Manchin was also implicated in secret recordings of an Exxon lobbyist this summer. That lobbyist, Keth McCoy, told members of Greenpeace’s Unearthed who were posing as potential employers that Manchin was a “kingmaker” on Capitol Hill and that Exxon had weekly calls with his office.
Opposition from Sinema, another centrist Democrat from Arizona, is also gumming up the works. She doesn’t think Congress should bump up tax rates for individuals and large corporations in part to fund the bill’s proposed expansions to the nation’s social safety net, two Democratic aides familiar with the matter told Business Insider.
Neither has clarified what specific changes to the bill would earn their approval, further frustrating their Democratic colleagues. To wit, Rep. John Yarmuth of Kentucky, the chair of the House Budget Committee, told reporters earlier this month in regards to the talks: “I have no sense of what Sinema wants.”
To win over the two senators, White House staffers are reportedly considering rewriting the bill to water down its climate policies and cut the clean energy program altogether. One suggested rewrite would instead include new tax incentives for businesses that produce renewable energy or consumers who purchase electric vehicles, but these incentives would expire after a certain period of time, people familiar with the matter told the Times. Two people close to the negotiations told the Post that lawmakers are also considering a voluntary emissions trading program that would provide federal funds to aluminum, steel, concrete, and chemicals manufacturers to help them reduce emissions. Neither rewrite would be as comprehensive or as aggressive as the current draft.
Sen. Ron Wyden also told the New York Times that he’s been asked to help craft a carbon tax as a way to pay for some of the bill’s spending. A carbon tax has, at times, enjoyed bipartisan support and from some corners of polluting industries. But implemented poorly, it could place undue burdens on lower-income households by increasing energy prices. In those secret Exxon recordings, McCoy also admitted the company only supports a carbon tax because it knows it will never pass. At the state level, Big Oil has thrown in against carbon taxes, torpedoing a 2018 ballot measure in Washington state. For his part, Manchin has been decidedly lukewarm on a carbon tax. He also infamously shot a copy of a 2009 bill that would have set up an even more milquetoast carbon market scheme for a campaign ad.
When asked about negotiations, Manchin’s office sent the following statement to Reuters:
“Senator Manchin has clearly expressed his concerns about using taxpayer dollars to pay private companies to do things they’re already doing. He continues to support efforts to combat climate change while protecting American energy independence and ensuring our energy reliability.”
It’s worth noting that by making concessions for Manchin and Sinema, the White House could jeopardize the bill’s support from other Democratic lawmakers. Sen. Tina Smith of Minnesota, who helped draft the Clean Energy Performance Program, told the Times that dropping the program might win Manchin’s vote but would cost hers.
White House spokesperson Vedant Patel declined the Times’ request for comment about the specifics of the bill, saying, “the White House is laser focused on advancing the president’s climate goals and positioning the United States to meet its emission targets in a way that grows domestic industries and good jobs.”
On Thursday, House Speaker Nancy Pelosi of California said at a San Francisco press event that she is still pushing for the aggressive climate change provisions that were initially proposed.
“What we’re here today about is specifically about the climate piece,” she said. “This is our moment. We cannot—we don’t have any more time to wait.”
Lawmakers are also trying to iron out comprehensive climate policies ahead of next month’s COP26, the United Nations climate summit in Glasgow, Scotland—particularly given Biden’s fierce condemnation of the previous administration’s stance on climate change. Biden, who is slated to attend the leaders summit for opening the conference, will be in a bind without strong domestic legislation to point to. It would leave the U.S. with a weaker negotiating position and give countries carte blanche to water down their commitments.
That two senators can single-handedly bring the U.S. political system to a standstill is depressing enough, but even more so when you remember that, according to many climate experts, this summit is our last, best chance at keeping global warming below catastrophic levels.
Update, 10/17/21, 11:35 a.m.: This post has been updated with new information and added details.