House Budget Hearings Target Biden-Era Spending on Clean Energy, Climate Change

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Committees in the Republican-led U.S. House of Representatives took their first steps toward adopting a multi-trillion-dollar budget reconciliation bill on Tuesday by holding markup hearings on proposed legislation that was released Sunday, May 11.

Overall, House Republicans are seeking to cut federal spending by over $4.9 trillion over fiscal years 2025-2034 to free up money to pay for an extension of President Donald Trump's 2017 tax cuts. The cuts are expected to come from federal outlays for Medicaid, clean energy, food support for low-income families, and other areas.

On energy and environmental matters, the critical House committees marking up draft legislation this week are: Energy and Commerce (E&C); Ways and Means; and Natural Resources.

House Republicans plan to use the budget reconciliation process, which requires only a bare majority to pass, in order to limit the potential for a filibuster in the Senate. But they may have trouble within their own ranks: Their narrow majority in the House means opposition by more than a handful of Republicans would doom the bill.

As the minority party, there is little House Democrats can do except criticize the GOP proposals and hope enough Republicans vote against the measures to doom the bill. House budget hawks and centrists have criticized the proposed tax and budget measure for different reasons: Budget hawks want greater reductions in spending while centrists want fewer spending cuts. And numerous House Republicans have warned House Speaker Mike Johnson (R-Louisiana) against cutting renewable energy funding, as those projects generate jobs and are popular in their home districts.

Johnson is trying to thread the needle between a lot of groups within his caucus. It could be days or even weeks until it is clear if he is successful. He wants to wrap up work on the massive tax and budget package by Memorial Day, a target he acknowledged is aggressive.

The House E&C panel was operating under a specific charge: Change laws and budgets in areas under its jurisdiction to reduce the deficit by not less than $880 billion for fiscal years 2025 through 2034 in order to fund the tax cut extension. Its first effort did better than that: in a call with Republicans May 11, E&C Chair Brett Guthrie (R-Kentucky) reportedly said the committee's preliminary legislative recommendations released that day cut more than $900 billion. That sum includes sizable cuts to Medicaid coverage for low-income Americans. A specific scorecard was not available from the committee.

The E&C panel's draft legislation had sections on energy, the environment, communications and health. On the energy section, the draft bill clawed back billions of dollars in unspent grant and loan funds that were part of the Inflation Reduction Act of 2022 (IRA), including:

• Funding for the U.S. Department of Energy (DOE) Loan Program Office, which received over $35 billion under the IRA
• Advanced technology vehicle manufacturing
• Energy infrastructure reinvestment financing, which received about $3 billion in the IRA
• Grants to facilitate the siting of interstate electricity transmission lines
• Interregional and offshore wind electricity transmission planning, modeling and analysis

The draft legislation also allocated $2 billion to repair and refill the Strategic Petroleum Reserve.

The draft bill also instructed the DOE to charge a $1 million fee to applicants seeking to export liquefied natural gas (LNG) to non-free trade agreement countries. In return, the agency would "deem the application in the public interest."

Pipeline developers would similarly be able to pay a fee--$10 million or 1% of the project cost--to receive expedited permitting and limitations on lawsuits.

In its environmental section, the E&C draft similarly rescinded billions of dollars of unspent funding for just about anything associated with fighting global warming or reducing industrial pollution, including:

• The greenhouse gas reduction fund, also known as "green banks," which received about $27 billion in funding in the IRA
• Clean energy vehicle grants (a companion tax measure was included in the Ways and Means Committee draft legislation)
• Repealing final rules issued by the Environmental Protection Agency (EPA) relating to multi-pollutant emissions standards for model years 2027 and later light-duty and medium-duty vehicles
• Repealing final rules issued by the National Highway Transportation Safety Administration (NHTSA) relating to vehicle fuel-economy standards for passenger cars and light trucks
• Low-emissions electricity
• Methane emissions reduction program
• Data collection on greenhouse gas emissions and testing the environmental impact of biofuels
• Mandated corporate reporting of greenhouse gas emissions
• A program, slammed as a "slush fund" by the GOP majority on the E&C committee, to support states, local governments and Tribes in developing and implementing climate change action plans and environmental justice initiatives

At Monday's E&C markup hearing, Guthrie said, "To ensure American energy dominance, we will take steps to ... save over $100 billion over 10 years (to) eliminate the electric vehicle mandates imposed by vehicle emission and fuel economy standards that have failed to serve American taxpayers."

In a statement, American Petroleum Institute (API) President and CEO Mike Sommers praised the E&C committee's proposal to institute a 10-year pause in the EPA's Waste Emissions Charge (WEC). "We applaud the House Energy and Commerce Committee for taking an important first step toward abolishing the 'methane fee' while also advancing important progress on permitting for infrastructure and U.S. LNG." The trade group said the methane charge was unnecessary, as U.S. methane emissions have declined 42% from 2015-2023 while production increased 51%.

In an opinion article in The Wall Street Journal, Guthrie said the committee's IRA recissions would pull back $6.5 billion in unspent IRA clean energy federal funds.

As sizable as the E&C panel's proposed cuts to energy and the environment were, reductions to Medicaid were far more significant. In his opinion article, Guthrie said his committee's proposal would cut $172 billion in planned Medicaid spending over the next decade.

Meanwhile, in a different markup hearing Tuesday, the House Ways and Means Committee proposed phasing out or cancelling several sizable clean-energy measures from the IRA, including ending this year (instead of in the next decade) tax credits for purchasing an electric vehicle, phasing out various clean energy production and investment tax credits slated to expire by 2031, limiting the sale of clean-energy tax credits, and cutting short a big hydrogen production tax credit, according to Reuters. The tax portion of the budget reconciliation package was nearly 400 pages long.

Democrats slammed Republican proposals in and out of the committee hearing rooms.

In a statement, Representative Frank Pallone (D-New Jersey), the ranking minority member of the E&C panel, said, "In no uncertain terms, millions of Americans will lose their health care coverage, hospitals will close, seniors will not be able to access the care they need, and premiums will rise for millions of people if this bill passes."

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