The House passed legislation on April 26—by a narrow 217-215 vote—to raise the debt ceiling and reduce spending over the next ten years. The U.S. Treasury hit the current $31.4 trillion debt limit in January. Without raising the debt ceiling, it would be unable to pay its bills, and the U.S. economy would fall into a recession.
Democratic lawmakers have described the House-passed bill as “dead on arrival,” in the Senate. Four Republicans voted with Democrats to oppose the bill. President Joe Biden has said he opposes the measure as passed, because it includes many provisions he opposes, such as measures to roll back tax incentives for clean energy projects created through the Inflation Reduction Act signed into law in 2022. Biden says he wants a “clean” bill without extra amendments.
But political observers say some of the bill’s provisions to streamline federal project permitting could survive in some form, if not in the debt-ceiling bill itself, then potentially as part of another must-pass legislative vehicle this year.
“There are active and collaborative conversations going on in the House and Senate with members of [both] parties," says Jimmy Christianson, vice president of government affairs for the Associated General Contractors of America. "I don’t know whether they will be able to get it done in time for this [bill]."
Evan Chapman, federal director of policy for the Clean Air Task Force (CATF), notes: “The House seems interested, the Senate is interested, and the White House. Of course, the devil is in the details.”
Steve Hall, senior vice president of advocacy at the American Council of Engineering Cos., says the first priority for his group is getting a debt-limit bill passed that the president will sign.
“We do have concerns about provisions in the House bill that roll back some of the green energy provisions, sustainability provisions that were part of the Infrastructure Investment and Jobs Act [IIJA] and other pieces of legislation that have passed in recent years.” he said, adding that the House-passed bill is a “starting point” and the legislation will likely change significantly as it moves through the Senate.
The League of Conservation Voters and other environmental groups have been vocal in their opposition to any rollback of the Inflation Reduction Act’s clean energy tax provisions.
Chapman says the House bill “would do away with tax credits that are key to advancing carbon-free technologies, including those that advance clean hydrogen production, expand the U.S. nuclear energy fleet, and reduce air pollution from the transportation sector.” Even if the already enacted laws are fully implemented, the U.S. could still fall short of greenhouse gas reduction commitments it made in the Paris agreement, the Task Force concluded in a study released earlier this month.
House Speaker Kevin McCarthy (R-Calif.) has described the bill as a first step in negotiating with the White House. In a statement, he said the vote “sends a clear message to President Biden—continuing to ignore the problem is not an option. The president must come to the table to negotiate.”
Interest in Narrow Permitting Reform
While there appears to be little to no appetite among Senate Democrats or the president to undo any measures that would spur investment in clean energy projects, lawmakers from both parties have expressed interest in enacting some type of permit reform.
The provisions in the debt-ceiling bill are drawn from the BUILDER Act, initially introduced by Republican Rep. Garret Graves (La.) in the House in 2021. The bill would limit the time period for lawsuits under the National Environmental Policy Act (NEPA), require litigants to have meaningfully participated in the review process early on in a project’s development, and narrow the scope of types of effects that should be considered in environmental reviews.
The legislation is part of a comprehensive package introduced by House Republicans early this year that they have identified as a top priority.
Democrats have also indicated support for permit reform. At an April 26 Senate Environment and Public Works Committee hearing, Chair Tom Carper (D-Del.) said that he would be open to a narrow reform bill if it did not raise greenhouse emissions and ensured that affected community members had a say in implementation of critical infrastructure projects.
He cited a recent Lawrence Berkeley National Laboratory study that found that only one in five transmission projects seeking to connect to the U.S. electric grid between 2000 and 2017 was operating by the end of 2022. "It's clear we are at a crossroads. We need to find a way to bring a massive amount of clean energy to our grid to mitigate the climate crisis."
AGC’s Christianson notes that there may be more of an incentive for Democrats to come to the table to negotiate on permitting reform in the run-up to the 2024 presidential elections. “There may be political impetus for Democrats to show progress on major keystone initiatives” such as IIJA, the Inflation Reduction Act and CHIPS Act, all of which will create pipelines for projects that will benefit workers and the economy, and address greenhouse gas emissions. Most of those projects have shown little movement toward construction since the enactment of the laws, he says.