Political Suicide via Economic Crushing Climate Bill

By Carlos E. Santa Maria @Shutterstock

A reconciliation battle is raging on Capital Hill, as reality is finally setting in for Democrats, reports Kimberley Strassel in the WSJ.  Most of the committee work revolved around the “hoopla” of taxes and entitlements, as progressives grappled with the first signs that their “sweeping climate agenda” is “veering toward a ditch,” writes Ms. Strassel.

Freezing in the Dark? 

It turns out a relevant number of Democrats are reluctant to destroy their states’ energy industries (and millions of jobs), or to saddle consumers with skyrocketing prices and blackouts.

Sen. Joe Manchin Again in Spotlight 

West Virginia’s coal industries (mining and power plants) support some 17% of the state’s economic output, and its utilities are more than 90% reliant on that fuel. More relevant for the reconciliation fight, Mr. Manchin is chairman of the Senate Energy and Natural Resources Committee, which was tasked in August with handling the crown jewel of progressives’ climate agenda—the Clean Electricity Payment Program.

Democrats managed to summon surprise somehow when Mr. Manchin—of West Virginia—on Sunday lambasted the program, noting that the industry is already moving to cleaner fuels. “It makes no sense to me at all for us to take billions of dollars and pay utilities for what they’re going to do as the market transitions,” he told CNN’s Dana Bash. 

Dems Destroying Blue Collar Union Jobs 

Ms. Bash tried to suggest Mr. Manchin was in the pocket of Exxon. In reality, he’s listening to labor groups like the United Mine Workers, who are opposed to CEPP, noting it will destroy the very blue-collar, union jobs Democrats claim to care about.

Joe Manchin Not Alone 

Seven House Democrats from Texas—a center of fossil-fuel production—on Monday sent a letter to Speaker Nancy Pelosi objecting to provisions “targeting the U.S. oil, natural gas, and refining industries.” They noted that oil and natural gas companies support “11 million domestic jobs” and also took aim at the CEPP, specifically its exclusion of natural gas.

Crushing Jobs = Political Suicide 

Then there are Democrats who worry the program will harm states that have already moved away from fossil fuels, or hurt markets. “We don’t need blunt penalties that are impossible for energy producers to avoid,” Arizona Rep. Tom O’Halleran told the Journal this week.

The bottom line: Energy remains central to functioning state economies, and enough Democrats continue to understand the political folly of crushing jobs and consumers with ruinous mandates.

 Green Groups in a Lather 

The White House and progressives had demanded the reconciliation bill strip fossil-fuel industries of longstanding tax provisions that allow them to recover costs. Yet in response to blowback from Democrats in oil-and-gas states like Texas, Ohio and Pennsylvania, the House Ways and Means Committee reconciliation draft this week didn’t include those repeals. The omission sent the green lobby around the bend.

Ways and Means Chairman Richard Neal’s “failure to tackle billions of dollars in direct subsidies to the fossil fuel industry is an egregious dereliction of duty,” railed Food & Water Watch policy director Mitch Jones. “No handouts for fossil fuels can be allowed. Not one dollar will be tolerated.”

How long will House Speaker Nancy Pelosi be able to Congressional progressives from joining in Neal and Jones’s blowback? How much will they tolerate?

The Bernie Sanders wing of the Democratic Party is already apoplectic that Mr. Manchin and Arizona Sen. Kyrsten Sinema say they won’t support $3.5 trillion. If Democrats from energy states hold strong, a final reconciliation bill may consist primarily of the renewable-energy tax credits that have been the mainstay of Democratic energy policy for decades. Here’s to betting that won’t wash with progressives who have made climate central to their congressional existence.

Ms. Strassel gives the green coalition credit for staving off political reality as long as it did, pretending a climate agenda would sail through Washington.

It may still pass, she admits, “but not before a bruising internal Democratic fight.”