The House Budget Committee will vote on a version of the partisan $ 3.5 trillion reconciliation bill on Saturday in hopes of appeasing competing Democratic factions and quickly reaching a deal with the Senate, but the climate remains a major sticking point in the negotiations.

The markup will be a key step in securing a reconciliation deal, underscoring the resolve of House Speaker Nancy Pelosi (D-Calif.) To reach an agreement ahead of the scheduled vote Monday on the separate bipartisan bill on infrastructure.

But significant hurdles remain when it comes to political specifics, pay and the ongoing political feud between moderate Democrats and progressives that still threatens to derail the process.

As talks drag on, Democrats are no closer to solving their climate problem, which is that Energy and Natural Resources Senate Speaker Joe Manchin (DW.Va.) appears to oppose the Clean Electricity Payment Program (CEPP) – their central proposal for reducing greenhouse gases. emissions. The party is also still sorting out the details of a potential carbon price, a policy some advocates once thought was dead, with Senate tax drafters pushing to include the policy as a payment (Daily E&E, September 16).

Yesterday, Manchin reiterated his concerns about CEPP, a version of a clean electricity standard that would provide subsidies to utilities that meet clean energy deployment targets each year.

“Why would we pay utilities for what they already do? Manchin asked reporters.

When asked if he could support any version of CEPP, Manchin said he focused on ‘working on the grid’. Democrats, Manchin added, should “be realistic” that climate change is global and that greenhouse gas emissions are not just coming from the United States.

Manchin has been in talks with President Biden and Democratic leaders over the program, which is within the purview of his committee, including at his White House meeting this week. “We’re in a different place on this, but not in a place where it’s at all confrontational,” he said in a climate question after meeting Biden on Wednesday (Daily E&E, September 23).

Divisions over the climate, as well as over health concerns and the biggest spending, mean the Senate remains days, if not weeks, away from a reconciliation plan that could garner support from all 50 Democrats.

Senator Brian Schatz (D-Hawaii) said it would be “difficult” to come up with a final product before Monday’s vote in the House on the infrastructure bill. Progressives threaten to vote against the bipartisan measure unless the Senate sends its reconciliation bill first (Daily E&E, September 22). Democrats still have a “long list” of climate proposals to agree on, Schatz said.

“We have to manage expectations,” Schatz told reporters. “This stuff is tough, and the negotiations have started in earnest, and we’ll get there.”

‘A lot of noise’

The House budget markup is an attempt to show that these negotiations are moving forward, as the leadership seeks to curb the feud between moderates and progressives.

The committee will consider a bill that represents the various bills passed by the relevant House committees earlier this month, stripped of any provisions that staff determined would not be compatible with parliamentary rules governing the reconciliation process. in the Senate.

According to the rules of the budget committee, lawmakers will not be able to propose amendments or make substantive changes. Instead, members can come up with non-binding “motions of instructions”, a symbolic way of taking certain political positions.

As House Budget Speaker John Yarmuth (D-Ky.) Told reporters yesterday, observers should expect “a lot of noise.”

The markup is essentially a procedural step that will allow the House to vote quickly on any deal the Democratic leaders make with the Senate. If there is agreement on new provisions or a lower number, a “manager’s amendment” could be introduced late, which would change the text of the underlying bill.

“Or,” Yarmuth said, “once the House passes it, it could be something the Senate changes when it comes back to us. I think realistically we now expect to get the project back. of law in the Senate at some point. ”

Yarmuth’s suggestion that the House should vote a second time on the reconciliation plan is a scenario Democratic leaders on both sides of Capitol Hill hoped to avoid, working feverishly to “pre-conference” key sticking points.

Pelosi is trying to give progressives a vote on the reconciliation bill on Monday, alongside the $ 1 trillion bipartisan infrastructure measure passed by the Senate this summer. But there is also hope that either the moderates agree to move the date to Monday for the passage of the bipartisan bill, or that the progressives resign themselves to voting on the bipartisan bill first, on the understanding that the adoption of the reconciliation bill would follow only a few days later.

“The president wants to act as quickly as possible to try to get the two measures passed close by,” Yarmuth said yesterday, adding that he expected the House to vote on a version of the reconciliation bill. next week”.

“Huge to be determined”

Whether Democrats can achieve a final product by then will depend heavily on discussions between the two tax drafting committees.

Senate Majority Leader Chuck Schumer (DN.Y.) said yesterday that the White House and the main Democrats had agreed on a “framework” on how to pay for the reconciliation package, surprisingly several of the senators involved in the negotiations (Green wire, September 23).

Schumer declined to release details of the framework, which he described as a memo. He said these were options accepted by House Ways and Means Speaker Richard Neal (D-Mass.) And Senate Finance Chairman Ron Wyden (D-Ore.).

The two presidents said this week that repealing national fossil fuel tax breaks is also under discussion, but the pair are still at odds on key clean energy and climate proposals.

“There were a few things that Neal and Wyden didn’t agree on, and they’re going to try to work together,” Schumer said.

On the one hand, Neal’s reconciliation plan is silent on carbon pricing, while Wyden talks about it as a payment and a climate policy to complement his clean energy tax plan.

“I was tasked by Senator Schumer to specifically examine carbon pricing,” Wyden told reporters yesterday. “We have a lot of senators who care deeply about this. We have had these discussions.

It’s not clear whether a price on carbon would ultimately run counter to Biden’s pledge not to raise taxes for Americans earning less than $ 400,000 a year. But Wyden said that promise is at the heart of the carbon pricing discussion. Although he declined to go into details, the Oregon Democrat suggested he was considering a fee and dividend model.

“What you always see are the middle class people – because they know that a carbon tax will involve a transition – want to know precisely how they’re going to fare in terms of the budget,” said Wyden. “And that means you have to make them whole with the product.”

Neal was less enthusiastic yesterday, although he did not rule out this option. “The Senate has raised these questions, but so far we haven’t seen anything,” Neal told reporters when asked about carbon pricing.

Another potential item on the menu is a carbon frontier adjustment, but there are important questions about how it would be structured – and if Biden would support it. The policy was not included in the Ways and Means proposal. Neal said he remains “in the mix,” but lawmakers have given little guidance on how it will be structured or if it will be tied to a national carbon price.

The European Union is already on the verge of imposing its own Carbon Border Adjustment Mechanism (CBAM), and climate advocates have long called on the United States to adopt a similar tariff on carbon-intensive imports. carbon. Senator Sheldon Whitehouse (DR.I.) said Democrats were waiting for a signal from Biden.

“The White House has yet to define what it wants through an adjustment to the carbon border,” Whitehouse, a member of the finance committee, told E&E News. “Is it related to CBAM? Is it linked to a carbon price? Is it related to energy intensity, and if so, how do you do it?

“So a huge TBD next to that one,” Whitehouse added.

Journalist Geof Koss contributed.