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Manchin continues efforts on bipartisan energy bill

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Tax Hot Topics newsletter Sen. Joe Manchin, D-W.Va., is continuing to push bipartisan legislation to combat climate change, modernize U.S. energy policy, and potentially impose a new tax on carbon-intensive imports, though the effort faces an uphill climb.

Manchin has organized a bipartisan group to discuss the possibility of compromise bill, and several members recently floated a border adjustment tax on imports of carbon-intensive goods from specific countries with weaker climate policies. The proposal is similar to one offered last year by Senate Democrats and supported by the Biden administration which would impose tariffs on fossil fuels and certain other products—such as cement and steel—on countries that are not doing enough to cut their greenhouse gas emissions.

The discussions on the package are still quite preliminary, however, and the likelihood of obtaining the 10 Republican Senate votes needed to break filibuster on the bill still appears quite unlikely. Nevertheless, Sens. Lisa Murkowski, R-Alaska, Kevin Cramer, R-N.D., and Mitt Romney R-Utah, all have indicated at least a preliminary interest in the bipartisan discussions.

These climate discussions come at a crucial moment for President Joe Biden and his slim majorities in Congress. Democratic lawmakers have failed to show any visible progress in the past several weeks toward a potential slimmed-down, party-line reconciliation bill to carry some of the priorities of the stalled Build Back Better (BBB) agenda. And, considering the House-passed BBB bill contains a plethora of proposals related to climate change and energy policy, the bipartisan discussions may, in turn, sap what little momentum remains for a reworked BBB reconciliation bill.

Manchin met with Senate Majority Leader Chuck Schumer, D-N.Y., last week on the possibility for reconciliation, and no breakthroughs were achieved. Senate Majority Whip Dick Durbin, D-Ill., subsequently added, “I put so much time into reconciliation. It took a year of my legislative life. I have nothing to show for it. I wish Chuck well on reconciliation. I’m going to focus my legislative efforts in the 60-vote world.”

While the timeline for any bipartisan energy package remains murky, Democrats have said significant progress will need to occur in the next several weeks for passage of a party-line reconciliation bill to remain a possibility.

Contact:
Dustin Stamper
Managing Director
Washington National Tax Office
T +1 202 861 4144

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