Senate Democrats poised to strip tax credits for oil and natural gas in a party-line vote

0
1



Democrats on the Senate Finance Committee are poised on Wednesday to push through a bill stripping federal tax credits from the oil and natural gas industries.

Known as the Clean Energy for America Act, the legislation seeks to radically remake the U.S. economy by focusing tax incentives on green renewable energy projects, while undercutting those in the fossil fuel industry.

“The window to avert the worst climate outcomes is closing and we need to address this crisis now,” said Senate Finance Committee Chairman Ron Wyden, the Oregon Democrat who authored the bill. “Energy policy is tax policy, and the federal tax code is woefully inadequate to address today’s energy challenges.”

Tucked away within the 139-page bill is the repeal of most federal tax incentives for the oil and natural gas industries. Democrats argue that decades of “preferential incentives” to fossil fuels have contributed significantly to greenhouse gas emissions.

“This shift from the past is long overdue and is the bold step we need to address the climate crisis,” said Democratic Sen. Debbie Stabenow of Michigan, a senior member of the finance panel.

Democrats are eager to move the legislation despite the lack of bipartisan support. Republicans, in particular, lambaste the bill for seeking to punish traditional gas and oil producers in favor of “unrealistic” and untested energy alternatives.

“Over the last couple of years, we’ve seen no shortage of unrealistic and downright harmful policies that are advocated for in the name of reducing carbon emissions,” said Sen. John Cornyn of Texas, a leading Republican on the finance panel. “Some of our colleagues have proposed everything from the socialist paradise that is the Green New Deal to a more targeted, but no more realistic, net-zero emissions bill.”

Given the opposition, many expect that the Senate Finance committee, which is tied 14-14 between Republicans and Democrats, will deadlock on the legislation. That, however, does not mean the legislation is dead, and Democrats hope eventually to bring it to the Senate floor for a full vote.

The bill faces long odds in the evenly split Senate, with Democrats only holding the majority due to the tie-breaking vote of Vice President Kamala Harris. Democrats must either find 10 GOP votes to break a filibuster or use a process known as reconciliation, allowing spending bills to pass with a simple Senate majority of 51 votes.

Bipartisan support is unlikely and Senate Minority Leader Mitch McConnell has already signaled his intent to mobilize Republicans to block the measure.  

“Chairman Wyden is leading the charge against the most reliable and affordable ways to power our nation,” said the Kentucky Republican. “The legislation he’s drafted is full of the sort of policies that could increase the price of gas at the pump, … hike the tax burden on independent American producers, … and drag the United States away from energy independence back toward reliance on imports from places like Russia, Venezuela and the Middle East.”

Similarly, the reconciliation process appears fraught with danger for Democrats. To reach the 51-vote threshold, the party will need to bring Sen. Joe Manchin, a key moderate Democrat from West Virginia, on board. Although Mr. Manchin is unlikely to support the measure given the economic impact that the coal and natural gas industries have in his state, Republicans argue the Finance Committee vote is an “audition” for the senator’s vote.

The push to jettison tax breaks for oil and natural gas comes as the White House has laid out an ambitious agenda to tackle climate change. Earlier this year, President Biden announced that the U.S. would aim to cut carbon emissions by more than 50% throughout 2030. For the administration to come even close to reaching the goal, a massive transformation in electricity generation, transportation, agriculture and manufacturing will be needed, experts say.

Democratic lawmakers believe the first step towards that transformation is to reorient federal tax policy to favor green energy over fossil fuels.

“Climate change is an existential threat that demands a robust action plan to address every sector of our economy and society,” said Sen. Jeanne Shaheen, New Hampshire Democrat and a member of the finance panel.  

Sign up for Daily Newsletters





View original
Post

LEAVE A REPLY

Please enter your comment!
Please enter your name here