In the 2021 and 2022 Congress, Democrats had a narrow Senate majority but nonetheless achieved major accomplishments through a combination of bipartisan legislation and the use of the budget reconciliation process. As chief counsel for the Senate Environment Committee, I was personally involved in some of these efforts and had a front row seat for others.
The approach brought major successes: the biggest investment in America’s infrastructure ever, the most meaningful climate change bill ever passed by Congress and new policies that reinvigorated U.S. manufacturing. However, there were also some notable failures.
For example, Democrats sought to increase the federal minimum wage in the budget reconciliation process. The budget implications of raising the minimum wage were estimated to be $54 billion.
Despite that huge effect, whether the provision could be included in the budget package hinged on the application of the “Byrd Rule,” which provides that budget bills cannot include provisions that have merely incidental budget effects compared to the provision’s nonbudgetary effects.
Democrats were crestfallen when the nonpartisan Senate parliamentarian ruled that including the wage provision would not comply with the Byrd rule. Simply put, indirect budgetary effects, even large ones, are considered incidental to the major and direct policy effects of raising the minimum wage.
The White House said at the time that President Biden “respects the parliamentarian’s decision and the Senate’s process,” and Sen. Lindsey Graham (R-S.C.) said, “reconciliation cannot be used as a vehicle to pass major legislative change — by either party — on a simple majority vote. This decision will, over time, reinforce the traditions of the Senate.”
The conservative Heritage Foundation was certainly relieved, as it had warned that including the wage provision would be the “equivalent of detonating the nuclear option on the legislative filibuster.”
Democrats might have been disappointed then, but the rules of reconciliation should work in their favor this year, provided that the traditions of the Senate hold.
The Republican majority in the House of Representatives has proposed budget reconciliation language that would defund, repeal and rewrite the nation’s energy, environment and climate policies. Under a fair application of the Byrd rule, many of the provisions would have to be stripped out.
The budget director for former Senate Majority Leader Bill Frist (R-Tenn.) recently observed that this effort to repeal Congress’s policy language in a budget measure is “clearly unprecedented.”
For starters, the proposed reconciliation bill would nullify the Environmental Protection Agency’s air pollution standards for cars and trucks. Although some have referred to these standards as an “electric vehicle mandate,” they really just require cleaner vehicles, whether powered by gasoline or electricity.
EPA’s analysis suggests that the rule will likely spur automakers to manufacture and sell more EVs, which, in addition to reducing pollution, will also help create jobs and grow the economy.
These EPA standards are projected to provide a stunning $1.9 trillion in health, climate and other benefits over the coming decades and will save hundreds of billions of dollars for consumers because electricity is cheaper than gasoline and EVs require so much less maintenance.
Despite these benefits, proponents of repeal will argue that there are budget effects from removing the standards. They will point to projections that American families will pay more in federal gas taxes and receive less in incentives for EVs if automakers bring fewer EVs to market.
But these kinds of indirect budget effects are analogous to the effects of the 2021 minimum wage proposal. The Senate parliamentarian should thus find that repealing pollution standards is not compliant with the Senate budget rules.
Unfortunately, the emerging bill looks like it will have many provisions that don’t belong in a budget bill. Even as Congress attempts to cut the healthcare safety net for Americans, they are creating a new safety net for gas and coal companies so that the American taxpayer backs up uneconomic investments they may make.
The bill singles out gas pipelines for special help from the federal government, ensuring their approval within one year, even if the pipeline would not be approvable under current law. Another provision states that if a gas company pays a $1 million fee, it can export as much gas as it chooses, even if those exports are not in the public interest.
The list goes on.
This radical set of policy proposals fails the test that Graham set in 2021. They put the business plans of fossil fuel companies ahead of the health and welfare of American families.
Fortunately, just as happened in 2021 with the minimum wage proposal, these provisions should be stripped out of the bill prior to congressional passage. That is, of course, if Senate rules hold and Republicans respect the traditions and precedent of the body.
Greg Dotson is an associate professor at the University of Oregon School of Law. Dotson served as the chief counsel to the U.S. Senate Environment and Public Works Committee in 2021 and 2022.