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Biden’s climate agenda at risk as Democrats negotiate budget bill

Senator Joe Manchin, a Democrat from West Virginia, gets into a vehicle following a vote at the U.S. Capitol in Washington, D.C., U.S., on Monday, Oct. 4, 2021.

Stefani Reynolds | Bloomberg | Getty Images

Democratic lawmakers are scrambling to negotiate alternative climate change proposals for President Joe Biden‘s massive budget plan, following West Virginia Sen. Joe Manchin’s strong opposition to the plan’s core climate change strategy.

Manchin, a moderate Democrat who can sink the bill provisin the 50-50 split Senate, said he will not vote for more than $1.5 trillion in spending and told the White House he’s opposed to a clean electricity plan, a key part of the president’s climate agenda.

The clean electricity program would require some of the country’s electricity to come from zero-carbon sources like wind and solar power and impose financial penalties on utilities that don’t meet clean energy standards. The $150 billion plan is critical for Biden’s commitment to cut emissions in half by 2030 and put the U.S. on track to reach net-zero emissions by 2050.

The president, in an attempt to salvage what had once been his $3.5 trillion budget plan, is meeting with members of the two warring factions of Democratic lawmakers on Tuesday. The outcome of this week’s negotiations could determine whether the budget bill gets through Congress and whether the $1 trillion bipartisan infrastructure bill already passed by the Senate receives a majority in the House.

U.S. President Joe Biden speaks during a conference call on climate change with the Major Economies Forum on Energy and Climate in the South Court Auditorium in the Eisenhower Executive Office Building on September 17, 2021 in Washington, DC.

Al Drago | Getty Images

White House staffers are now rewriting the bill without the clean electricity provision, according to a recent New York Times report, and considering other proposals such a tax on carbon and methane emissions. Manchin told reporters on Tuesday that a carbon tax “is not on the board at all right now.” Manchin’s office didn’t immediately respond to CNBC’s inquiry.

Fighting climate change has been a main component of the president’s “Build Back Better” agenda. Other climate provisions in the budget plan include tax incentives for electric vehicle buyers and renewable energy producers; funding to install EV charging stations across the country; funding to update the country’s electric grid; and spending to drive down emissions from federal buildings and operations.

Democrats previously vowed they would not take the clean electricity program out of the legislation, arguing it’s by far the most feasible way for the U.S. to rapidly reduce emissions. Democrats aim to pass both plans before the end of the month and have not agreed to a final price tag for the budget, though it could amount to roughly $2 trillion.

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The opposition from Manchin, whose biggest single source of income last year was a coal consulting business he founded, could give Biden a weaker position at the upcoming United Nations climate change summit in Glasgow, Scotland.

The summit is an opportunity for the U.S., the world’s second-biggest carbon emitter, to prove it’s rejoining global efforts to fight climate change after Former President Donald Trump pulled the country from the Paris climate accord, mocked the science of climate change and dismantled more than 100 environmental regulations.

The clean electricity provision would be the most significant climate policy ever passed by the U.S. and a chance for Biden to show the rest of the world that the U.S. is a leading force on battling climate change. Before the president’s infrastructure proposal, the last major push to pass climate legislation through the Senate was in 2009, when congressional Democrats failed to pass a carbon-pricing system.

White House Press Secretary Jen Psaki on Tuesday said the president will push ahead on future bills focusing on provisions omitted from the budget bill. Therefore, Democrats might need to implement the clean electricity program through a future stand-alone bill if its cut from the president’s agenda at the end of the month.  

“Whatever we cannot tackle now, we will be able to tackle in future bills,” Psaki said during a brief briefing.

— CNBC’s Jacob Pramuk and Christina Wilkie contributed reporting


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