Legislative Update: Congressional Stalemate Intensifies as Funding Deadline Nears

Congressional Stalemate Intensifies as Funding Deadline Nears

On September 18, the House rejected Speaker Mike Johnson’s (R-LA) six-month stopgap spending bill (H.R. 9494) paired with an election security measure requiring proof of citizenship, edging Congress closer to the September 30 deadline to fund the government. The House defeated the bill by a vote of 202-220, with 14 Republicans voting against the bill. Three Democrats–all in vulnerable races–crossed party lines and voted to pass the bill.  Speaker Johnson initially planned a vote on the stopgap last week but had to pull the legislation due to lack of support. Johnson has not yet indicated his next steps.

Republicans are still divided on whether to attempt a more bipartisan approach to get the votes needed to pass a stop-gap bill. Further complicating the situation, former President Donald Trump continues to urge Republicans to reject any bill that does not include the SAVE Act, despite current law already making it illegal for noncitizens to vote.  The inclusion of the Save Act has been a non-starter for Democrats, who argue that it aims to disenfranchise legally eligible voters because of new paperwork requirements and depress turnout.

Congressional Democrats, the White House, the Pentagon, and some Republican appropriators also oppose extending the stopgap until March 2025, instead wanting to extend funding only through mid-December. Secretary of Defense Lloyd Austin and military service officials say that a six-month CR would impact the Defense Department’s ability to accomplish its mission, maintain national security, and put multiple programs on hold.

Appropriators argue that the House bill does not include several programs and funding authorization extensions for programs that are set to expire at the end of the month, including Ukraine aid, the extension of some farm programs, and disaster relief.  Some lawmakers are concerned there’s insufficient time to get many of those measures into the current stopgap. This and additional programs scheduled to expire at the end of the year are reasons that Senate Appropriations Vice Chair Susan Collins (R-ME) argues that the stop-gap shouldn’t go beyond mid-December because Congress still needs to negotiate these extensions and issues and be sure to cover any lapsed funding for programs.

With only 11 days until a shutdown, the Senate may take independent action, with both parties expressing a desire to avoid one. House Appropriations ranking member Rosa DeLauro (D-CT) reiterated her call for the “four corners”—the Appropriations chairs and ranking members in both chambers—to come together and negotiate a bipartisan bill.

New Legislation Seeks to Punish Fossil Fuel Industry  for Climate Crisis

Senator Chris Van Hollen (D-MD), alongside Representatives Jerry Nadler (D-NY) and Judy Chu (D-CA), introduced the bicameral Polluters Pay Climate Fund Act. This legislation mandates that the largest U.S.-based fossil fuel extractors, oil refiners, and foreign companies operating in the U.S. contribute to a $1 trillion fund based on their global emissions. The fund aims to address the climate crisis by financing efforts to mitigate its effects, such as extreme heat, rising sea levels, and severe storms. Senator Van Hollen told reporters that the bill’s core principle “is simple but very powerful – polluters should pay to clean up the mess they made and build a more resilient future, and those who have polluted the most should pay the most.”

The legislation, modeled after the Superfund law, would impose a fee on the top-polluting fossil fuel companies to generate a $1 trillion Polluters Pay Climate Fund to address climate challenges based on their historical emissions. The legislation will use peer-reviewed “carbon attribution” research to assess companies based on their global carbon dioxide emissions, specifically targeting those responsible for over 1 billion metric tons of emissions between 2000-2022. These companies would contribute $100 billion annually for ten years. The fund would finance various efforts to mitigate climate impacts, including infrastructure upgrades, pollution clean-up in frontline communities, and disaster relief. Notably, 40% of the funds would be dedicated to investments benefiting environmental justice communities.

Van Hollen gave a nod to similar bills that have been passed in Vermont and New York.  State legislators have also introduced related bills in California, Maryland, and Massachusetts. The bill coincides with numerous “climate nuisance lawsuits” in which states and cities seek to hold the oil industry liable for its role in causing climate change. The U.S. Supreme Court is currently reviewing several attempts by the oil industry and allied states to dismiss these cases.  Senator Van Hollen says that his proposed national climate fund would not preempt state laws or ongoing lawsuits to hold polluters accountable.

Senate cosponsors, all Democrats from deep blue states, include Senators Ed Markey (D-MA), Jeff Merkley (D-OR.), Bernie Sanders (I-VT), Elizabeth Warren (D-MA), and Sheldon Whitehouse (D-RI).  In the House, fifteen Democratic members have cosponsored the bill.  It is also endorsed by over 70 organizations that promote conservation and environmental justice.

Lawmakers and Industry Leaders Examine the Ongoing Regulatory Confusion and Economic Burdens with the WOTUS Rule After the Sackett Decision

The Transportation and Infrastructure Subcommittee on Water Resources and Environment on September 11 held a hearing examining the current definition of “waters of the U.S.” (WOTUS) after the Supreme Court’s Sackett v EPA decision that restricted the Biden administration’s oversight authority over rivers, streams, lakes, and wetlands that fall under the jurisdiction of the Clean Water Act, and its impact on the permitting process.

Witnesses, including those from the National Homebuilders Association and the American Farm Bureau Federation, testified about ongoing challenges related to regulatory inconsistency and lack of transparency from the EPA and the U.S. Army Corps of Engineers regarding the WOTUS definition despite SCOTUS’s Sackett ruling.  The administration’s revised WOTUS rule, released after the Sackett decision, has been criticized by Republican lawmakers and industries for over-regulation and failing to adequately address the Court’s findings, further confusing the regulated community.

During the hearing, Rep. David Rouzer (R-NC), Chairman of the Water Resources and Environment Subcommittee, criticized the complexity of WOTUS federal regulations, calling it a prime example of bureaucratic overreach. He emphasized the need for a balanced approach that protects the environment and economic development while respecting states’ rights. Rouzer argued that the Clean Water Act (CWA) was never intended to give the federal government control over every body of water and stressed that the Administration has not appropriately implemented the Supreme Court’s Sackett decision, leading to continued confusion in jurisdictional determinations.

Alaska Department of Environmental Conservation Commissioner Emma Pokon, argued that states are better positioned to make water protection decisions for their residents, but federal agencies are reluctant to trust them. She also noted that, despite the Sackett ruling, nothing has changed in Alaska’s implementation of water quality standards, reflecting a lack of federal adaptation to the Court’s decision.

Courtney Briggs, representing the American Farm Bureau Federation and the Waters Advocacy Coalition (WAC), testified that the Biden Administration’s interpretation of the WOTUS rule imposes significant burdens on farmers. She argued that the current interpretation lacks clarity and certainty for landowners and leaves them vulnerable to fines of up to $64,000 per day or even jail time for unknowingly violating the law.

Vincent Messerly, President of the Stream and Wetlands Foundation, testified on behalf of the National Association of Home Builders about the significant delays and costs that the WOTUS rule imposes on the homebuilding industry. He highlighted that obtaining a CWA section 404 permit can take an average of 788 days and cost $471,836, while even a streamlined nationwide permit takes 313 days and costs $50,233. Messerly testified that these delays and expenses contribute to higher housing production costs and impact efforts to provide more affordable housing.

Ahead of the House hearing, a coalition of 24 states, led by West Virginia Attorney General Patrick Morrisey, sent a letter to lawmakers expressing concerns over the Biden administration’s amended WOTUS rule. The states criticized their experiences with the rule, citing ongoing challenges in its implementation. While the Environmental Protection Agency (EPA) insists it is applying the rule correctly, several states are involved in legal disputes, arguing that the rule fails to include a key requirement that adjacent wetlands be “indistinguishable” from traditionally navigable waters, leading to conflicts over its interpretation.

House Speaker Johnson: Full Repeal of Inflation Reduction Act Unlikely, Scalpel Approach Preferred

House Speaker Mike Johnson (R-LA) confirmed this week that Republicans would not pursue a full repeal of the Inflation Reduction Act (IRA), acknowledging some beneficial clean energy tax credit provisions.  In an interview, Johnson emphasized the need for a measured approach, stating, “You’ve got to use a scalpel and not a sledgehammer.” While he did not provide specifics, Johnson suggested parts of the IRA could remain intact. However, the GOP would likely need to make cuts to the IRA to fund their priority of extending and expanding the Tax Cuts and Jobs Act (TCJA). Johnson also endorsed the idea of reclaiming already allocated but unspent IRA funds.

The distribution of clean energy funds primarily to red states and districts complicates Republican efforts to repeal or alter the IRA. Many GOP lawmakers are reluctant to cut programs benefiting their constituents. In August, 18 Republican House members sent a letter to Speaker Mike Johnson urging the preservation of certain unspecified tax credits, prompting high-level meetings with GOP leadership. Repeal efforts are expected to vary: some provisions will likely be eliminated or heavily modified, such as the electric vehicle (EV) tax credit, methane tax, Superfund financing, and climate grants. EVs, in particular, have become a contentious issue in conservative circles. The Department of Energy’s Loan Programs Office, with $400 billion in loan authority, is also under scrutiny, with proposals to redirect funds to advanced nuclear power or reorient its focus away from renewable energy to more GOP-aligned industries.  Provisions likely to kept include credits for biofuel/diesel, pre-existing nuclear energy, carbon capture, and clean hydrogen. The 45X Advanced Manufacturing Production Credit is also likely to stay around.

House GOP Pushes for More Aggressive NEPA Reforms in Energy Permitting Legislation

House Republicans are working to influence Senate legislation aimed at streamlining energy project permitting by proposing more aggressive changes to environmental reviews under the National Environmental Policy Act (NEPA). While the Senate Energy and Natural Resources Committee passed a bipartisan permitting and transmission bill in July, the House Natural Resources Committee reviewed several NEPA-related bills on Sept. 11, with a focus on limiting the scope of environmental analyses.

Key components of House proposals include provisions to restrict federal agencies from assessing indirect environmental effects beyond their jurisdiction and eliminating the need for new scientific research unless deemed essential. The House draft bill (H.R. 9533), led by Rep. Bruce Westerman (R-AR), also tightens judicial review provisions, including stricter conditions for legal challenges and shorter deadlines for filing suits.

Other proposals H. J. Res 168 from Rep. Garret Graves (R-LA), seeks to vacate the White House’s “Phase 2” NEPA changes, which were part of a 2023 debt ceiling agreement and H.R. 6129, introduced by Rep. Rudy Yakym III (R-IN) and Rep. Jimmy Panetta (D-CA), garnered bipartisan support. It would require the Council on Environmental Quality (CEQ) to publicly report NEPA project wait times and legal challenges.

These measures go further than the Senate bill, potentially complicating efforts to integrate both versions into a broader permitting reform package, as House proposals are likely to face greater opposition from Democrats who are concerned with reducing public input and say the legislation favors corporate polluters.

EPA OIG Confirms Retaliation Against Scientists Over New-Chemical Reviews

The EPA’s Office of Inspector General (OIG) on September 18 validated some allegations of retaliation against three EPA scientists who challenged program managers over new-chemical reviews under the Toxic Substances Control Act (TSCA) from 2019 to 2022. The OIG found that these scientists expressed differing scientific opinions, leading to personnel actions that violated the EPA’s Scientific Integrity Policy. One of the scientists was also retaliated against for engaging in activities protected under the Whistleblower Protection Act.

OIG recommended corrective actions, including suspensions for supervisors involved in prohibited practices. However, two other scientists’ claims of retaliation could not be fully substantiated, and no corrective actions were recommended in their cases. These investigations stemmed from whistleblower complaints alleging that managers weakened risk assessments of new chemicals, resulting in less stringent regulations, and retaliated against staff who opposed these changes.