Chris Kearney | NSWA Vice President, Governmental Affairs
In late August, the House passed, by a party-line vote of 220-212, a multi-section procedural measure (H. Res. 601) which includes the adoption of the Senate-passed FY 2022 budget resolution or “blueprint” (S. Con. Res. 14) and outlines a date certain for voting on the Senate-passed infrastructure bill.
With the House’s adoption of the FY22 budget resolution by both chambers, it officially kickstarted the budget reconciliation process that will allow congressional Democrats to pass a ten year $3.5 trillion annual expansive social spending and tax package aimed at implementing the President’s “Build Back Better agenda,” including large swaths of President Joe Biden’s proposed American Jobs and Families Plans unveiled earlier this year.
The FY22 budget resolution directs 13 House and Senate committees to write and markup their legislative components of the reconciliation package by Wednesday, September 15.
To achieve this, each committee gets an “instruction” – think of it as an allocation of funding – that they in turn use to develop legislative language that will result in spending and/or revenue raised to achieve the $3.5 trillion annual spending target.
Once the multiple bills are marked up and passed by the committees, the House Budget Committee will then bundle them together into a single, mammoth bill prior to a vote by the House.
1. Sept. 15 — Reconciliation Bills Due
The House Ways and Means Committee – the tax writing committee that has jurisdiction over percentage depletion and IDC – has completed its review and markup of contribution to the FY22 Budget reconciliation package. No oil and gas deduction or credit eliminations were included in the package.
We expect, however, that Progressive House members will push for the inclusion of eliminating percentage depletion, among other tax treatments, during House Floor consideration in the coming weeks. We also expect Progressives in the Senate to pursue for its inclusion in the Senate Budget Reconciliation legislative package.
All NSWA members are encouraged to call and or email their House Representatives and Senators and urge that percentage depletion not be included in the FY22 Budget Reconciliation Bill.
Also, the House Energy and Commerce Committee has completed its work on the committee’s contribution to the budget reconciliation process.
The committee’s bill includes a methane fee on the oil and gas industry that “recognizes the cleanest performers” and “holds individual companies responsible for their own leaks and excess methane pollution.”
Specifically, the committee by a vote of 31-26 approved a portion of the $3.5 trillion budget reconciliation measure that would direct the Environmental Protection Agency to impose a methane pollution fee on the oil and gas industry. Rep. Kurt Schrader (D-Ore.) joined Republicans in voting against the legislation.
The fee would vary depending on how much of the greenhouse gas a facility emits. Methane emissions are considered more toxic than carbon dioxide.
The amount of the fee, which would begin in calendar year 2023, would be $1,500 per ton of methane that a facility reports during the prior reporting period, based on the specific industry’s intensity threshold number.
The fee for petroleum and natural gas production, for example, would be based on the reported tons of methane emissions that exceed 0.20% of the natural gas sent to sale from such facility. The fee for nonproduction petroleum and gas industry would be on the reported tons of methane emissions that exceed 0.05% of natural gas sent to sale from the facility.
It is expected that Democrats and Republicans from oil and gas states – on and off the committee – will continue efforts to strike the fee from the bill in the upcoming House Floor debate.
Senate action on a methane fee is unknown at this time, though leading Progressive members are expected to push for inclusion of a broad methane tax on oil and gas operations.
2. Sept. 27 (tentative) — House Infrastructure Vote
This is expected to be followed by debate and an amendments process – details yet to be determined – to the Senate bill prior to passage, with only a simple majority being required.
Given the tight timeframes, Senate Democrats have been working with their House Democratic counterparts behind-the-scenes to come to agreements on various policy and spending items. It’s not clear yet if the Senate committees will formally mark up their legislative contributions or simply provide text directly to the Senate Budget Committee.
In addition, the House is tentatively expected to consider the $1.2 trillion Senate-passed Infrastructure Investment and Jobs Act by late September or early October.
House Speaker Nancy Pelosi (D-CA) reached a deal that included this commitment with 10 moderate House Democrats, led by Rep. Josh Gottheimer (D-NJ), who had initially threatened not to vote in favor of the FY22 budget resolution until the House voted on the Senate-passed infrastructure bill first.
Speaker Pelosi has pledged for months that the House would wait to vote on the bipartisan Senate-passed infrastructure bill until the $3.5 trillion reconciliation package was also passed by the Senate because of previous threats from Progressives that they would oppose the infrastructure bill until their priorities were addressed in the reconciliation package.
In order for the House to realistically pass the Senate-passed Infrastructure Investment and Jobs Act by September 27 – the currently announced date for action on the measure – both the House and Senate will need to have made significant progress on the budget reconciliation package prior to that date.
So, there is skepticism at this stage that those dates will be fully met, though many forces – not the least of which are the Moderate Democrats – are expected to keep the pressure on toward meeting that date.
The bottom line: the process, the dates, and efforts at consensus across the chambers regarding reconciliation is very fluid. We will continue to track it closely.
The Senate has returned from their summer break while the House returns on September 20th.
3. Oct. 1 — New fiscal year
4. October — Debt ceiling
To make matters more interesting, it should be noted that when they return, the two chambers will also need to determine: 1) how to continue to fund the government – the fiscal year ends September 30 and only the House has passed all 12 approps bills, the Senate has passed none; and, 2) the need to raise the federal debt limit looms – the government is expected to hit the ceiling on the federal “credit card” borrowing limit – and will likely be necessary sometime in October.