Democratic Agenda in Upheaval With a Bleak Outlook For Priority Legislation

House and Senate lawmakers returned from Independence Day Recess in what is seen by most in Washington as the last chance to pass bipartisan legislation before the midterm elections kill the prospects of such a vote.  But the congressional schedule has been thrown into disarray since the members returned, forcing Democrats to make many trips to the drawing board to figure out how they might pass their priority proposals.

 

Minority Leader Mitch McConnell (R-KY) dealt the first blow to Democrats when he issued an ultimatum promising to derail the entire China competitiveness package if Democrats pushed through a budget reconciliation bill.  “Let me be clear: There will be no bipartisan USICA as long as Democrats seek a partisan reconciliation bill,” McConnell tweeted June 30.

 

Senate Majority Leader Chuck Schumer (D-NY) rebuffed the Republican Leader.  McConnell made good on his promise to instruct all Republican staffers and senators to halt conference negotiations until further notice immediately.  Democrats struggled to get back on track.  They focused on completing their reconciliation negotiations with Sen. Joe Manchin (D-WV) while exploring some of the options they had to potentially pass some, or parts of, the Bipartisan Innovations Act.  But once again, the Democratic Caucus received another blow, but this time from one of their own.  Senator Manchin on Thursday night upended the reconciliation package by suddenly abandoning the climate measures and tax increases that he had previously supported, leaving only one of the three pillars focused on lowering health care costs.  This is the second time Manchin has thwarted  Majority Leader’s climate and  economic package.  Manchin expressed concern this week about rising inflation costs and said he wanted to continue “scrubbing” the reconciliation measure to ensure that measures introduced by Democrats would not make the situation worse.  The announcement comes at a time when the Labor Department is releasing its Consumer Price Index report, which showed consumer prices rose 9.1 percent in June from a year earlier.

Machin’s move is an additional sting for Democrats after the administration and its climate agenda took a hit a couple weeks ago after the Supreme Court ruling in West Virginia v. EPA limited EPAs ability to limit greenhouse gas emissions from power plants.  Several Democrats had expected the Senate to at least pass the $300 billion package of clean energy tax credits that was part of the reconciliation agreement and to provide a significant boost to domestic clean energy.  Removing these provisions also eliminates funding for the  struggling domestic semiconductor industry after the $52 billion for microchips funding tied with the BIA was also suspended.  Four semiconductor companies announced last week that they were postponing their investments in U.S. site expansions because they feared the funding would not materialize.  House Democrats could try to pass the Senate-passed USICA bill, but House Majority Leader Steny Hoyer (D-MD) confirmed that the Caucus has no interest in that option.  Given that the bill has been stalled for almost a year due to the two chambers not working out differences on so many contentious trade provisions, there’s little hope that House Democrats would suddenly embrace and pass it now.   With not many more options left, Senate might have to give in soon and pass a stand-alone CHIPS bill.  McConnell has already signaled that he would support this.

 

House Examines “Broken” Recycling System

On June 30, the House and Energy Commerce Subcommittee on Environment and Climate Change held a hearing titled “No Time to Waste: Solutions for America’s Broken Recycling System.” As the hearing title suggests, Members and witnesses agreed that the US has a broken recycling system that has been ignored for too long and needs a dedicated effort to find solutions that can increase the current US recycling rate to over the current 32%.  As the administration promotes funding for recycling infrastructure under the Bipartisan Infrastructure Law and calls for a national recycling plan, lawmakers in the House and Senate have been working to pass new legislation.  Undoubtedly, finding policy solutions to the nation’s recycling problem is complex.  For this reason, the Committee is considering four very different bills with different approaches; they represent the interests of a wide range of stakeholders, and yet two of them find their solutions by opting for policies that single out one product and one sector that is only a part of the problem, but essentially would eliminate entire companies, their workers, and the economic, medical, and innovative technological benefits that the industry brings, rather than working on solutions to the more complex problem that affects many.

 

Two of the bills have garnered broad bipartisan support and focus on finding solutions through a more comprehensive US waste system in smaller steps are the “Recycling and Composting Accountability Act” (H.R. 8059), a bill introduced by Reps.  Joe Neguse (D-CO), Tim Burchett (R- TN), and Bill Foster (D- IL) would direct EPA to collect data on recycling and composting to use that information later to develop regulations.  The “Recycling Infrastructure and Accessibility Act” (H.R. 8183), introduced by McKinley (R-WV) and Rep. Mike Sherrill (D- NJ), would seek to address long-running discrepancies in recycling rates in rural areas, including the creation of a pilot recycling program.  Both bills have Senate companions that were reported favorably by the Senate Environment and Public Works Committee earlier this year.

 

Other bills discussed by the committee included the Climate Leadership and Environmental Action for Our Nation’s (CLEAN) Future Act (H.R. 1512), which focuses on climate change and sets a goal of achieving net-zero greenhouse gas emissions no later than 2050.  Part of the bill addresses recycling and the growing problems with plastics.  The bill proposes increasing the amount of recycled material and exploring an extended producer responsibility (EPR) model that shifts costs back to manufacturers.  Other provisions include a freeze on new plastic facilities, which Vinyl Institute strongly opposes.  The “Break Free From Plastic Pollution Act” ( H.R. 2238), introduced by Rep. Alan Lowenthal (D- CA), is another bill that VI and other industry groups oppose.  It includes an EPR provision, minimum requirements for recycled content, a national bottle deposit system, and aggressive efforts to crack down on new plastics facilities.  One of the more problematic provisions for VI is that it prohibits advanced recycling, also known as chemical recycling.

 

As might be expected, there was a great deal of disagreement among lawmakers on the last two bills.  Republicans opposed the Democratic bills, and several legislators faulted the direct attack on the plastics industry.  Both bills call for a three-year pause in resin plant permitting while EPA drafts new rules.  Ranking Member  Cathy McMorris Rodgers (R- WA) said the ban on new plastic manufacturing and certain single-use plastic products would cost American jobs, exacerbate the supply chain crisis, and hurt economic development across the country.

 

Matt Seaholm, chief executive officer of the Plastics Industry Association, said the pause would impact nearly 1 million industry jobs, increase costs and further weaken supply chains, calling it “the most concerning component” of the two Democratic bills.  These bills would cause many companies to cease production or “push plastics production to other countries, ones with much less stringent environmental records.” he said.

 

Seaholm told Rep. McMorris Rodgers that the impact would be felt throughout the manufacturing supply chain because “it would cover every type of plastic imaginable.  “These pieces of legislation would cover everything from food packaging to even automotive parts when it comes to the production of plastic.” The Congresswoman replied that her concern is the threat this could have on “our standard of living and our economic competitiveness,” she said.

 

Another topic of discussion was the Supreme Court’s decision in West Virginia v. EPA, which was announced shortly before the hearing.  Subcommittee Ranking Member David McKinley, raised the question of whether the “de facto ban” on plastics in the Democrats’ bills was “another example of EPA overreach.”  Moreover, such litigation could take more than three years and do even more damage.  Seaholm said that the could even be open-ended, “That’s certainly our biggest concern is, it’s considered a temporary pause, but because of the way it’s written, there is no for a certain end date for that pause,” Seaholm said.

 

Some lawmakers raised questions about chemical recycling.  Lynn Hoffman, Co-president of Eureka Recycling, told Rep. Yvette Clarke (D- NY) that chemical recycling cannot be defined as recycling because it is not linear, rather than circular, because so far, plastics are used to make fuel, which is then burned.  “This isn’t circular,” she said.  Seaholm disagreed with that characterization, giving Rep. Buddy Carter (R-GA) two circular examples: Nexus Circular, which uses its recycled products for new, burking quality circular plastics, and Coca-Cola, which has set a goal of using at least 50% recycled content in its packaging by 2030.  He also pointed to a current project by McDonald’s project where they are using bio plastic caps and cups.

 

 

 

Vinyl Institute Joins Industry Groups Urging EPA to Lift its Ban on Current Uses of Chrysotile Asbestos

The Vinyl Institute, along with other major industry, business, and chemical organizations, sent a letter on July 8 to EPA Assistant Administrator Michal Freedhoff urging the agency to withdraw its proposal to ban the current use of chrysotile asbestos under the Toxic Substances Control Act (TSCA).  The proposal would phase out chrysotile asbestos from chlor-alkali production and gaskets in certain chemical plants within two years.  EPA’s decision to ban the mineral despite warnings from the chemical and water treatment industries that the rule would drastically reduce chlorine supplies needed for water treatment.  A one-third reduction of the overall chlorine supply will inevitably have a negative effect on the ability of water systems to provide access to clean and safe drinking water for many communities.

The organizations urged EPA to “reconsider the need for the U.S. to transition completely away from targeted and safe uses of chrysotile asbestos” and proposed a more reasonable and sufficient five-year phaseout period that would include an occupational exposure limit to protect workers from exposure.  “The rule fails to consider the necessity of chlorine and its byproducts across numerous sectors in our economy in addition to the benefits sheet gaskets have in the refining industry to produce energy, essential fuels, pharmaceuticals, sanitizing agents, and other chemicals,” the letter says.  “An abrupt ban would affect one-third of U.S. chlorine capacity and impact many industries.  It would also affect a large number of chemical manufacturing sites using sheet gaskets across the country that would additionally impact supply of other needed chemistries to downstream users.” The letter also emphasized that the action comes when supply chains are already severely disrupted and likely to further impact markets, all at a time when consumers are facing high inflation and rising prices.