Hi Folks,
I know it can be super confusing and stressful reading the news about reconciliation right now. What's going on with the stand off in the House? What did Joe Manchin say today? When will we see if carbon pricing is in the initial draft?
First I'll just acknowledge that this is a crazy roller coaster ride and that there will be many ups and downs (and maybe some loops) in this process. As always, stay calm, take a deep breath and together we can get through this.
As for what is going on in the House, I'll preface by saying that the main event is really in the Senate. Because of the tight split in the Senate every Democratic Senator essentially has a veto vote. So, while the House version of the budget bill is interesting, it is the Senate bill that is likely to dictate the final version of the budget package. We are still feeling optimistic about getting carbon pricing in the Senate version and optimistic, despite all the posturing, that they will come to some compromise version and pass the budget.
So, the current stand off in the House is mainly a conflict between progressives who want to move the budget reconciliation bill and the Bipartisan Infrastructure Framework (BIF) at the same time, and the moderates who want to pass the BIF now and follow up with reconciliation later. Progressives want to retain leverage over the reconciliation process by tying it to the BIF, in hopes of having influence on the Senate's version of reconciliation. It's unclear how House leadership will resolve this issue. It's also unclear how much this will affect the end product of what is in reconciliation. My sense is that this probably matters but is also a bit of a side show to what is happening in the Senate.
As for Joe Manchin and other moderates in the Senate, they have made it clear that they want a smaller overall spending package and I'm sure that will be a main point of negotiation. It's also unclear how Manchin will relate to the climate provisions of the bill. My personal sense is that Manchin wants to see positive things for the people of West Virginia (ie funding for manufacturing and jobs), and wants a plausible path forward for the WV coal and gas industry in the form of support for carbon capture. Whether carbon capture can actually save those industries is an open question given the technological and market dynamics, but having a plausible path forward may be the key for Manchin.
As for carbon pricing, as I said I see lots of reasons for optimism and that optimism is shared by CCL staffers in DC who have been talking directly to congressional offices. News media has been picking up the subject more and more. Twitter is talking about it. Businesses are supportive. Chair of the Senate Finance Committee Ron Wyden is talking about it. NGOs are putting their weight behind it. There are no guarantees, but it is getting serious consideration and now is definitely the time to be advocating hard on every channel.
It definitely is a roller coaster! And we have a TikTok in that theme here.  Go watch if you need a laugh today! 😂
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