GOP suggests raising U.S. debt ceiling in exchange for energy permitting reform

Erik Wasson and Ari Natter, Bloomberg March 29, 2023

(Bloomberg) – Republicans are floating legislation that would ease energy permitting in exchange for raising the U.S. debt ceiling, creating a potential path to avoid a default.

The White House is still insisting on a bill that simply raises the debt ceiling without conditions. But an agreement on energy permitting could benefit projects ranging from pipelines and oil refining to renewable power projects, making a deal attractive to both parties.

House Speaker Kevin McCarthy wrote to President Joe Biden on Tuesday, proposing attaching to the debt ceiling bill “measures to lower energy costs, make America energy independent” in addition to previously requested cuts and caps to domestic discretionary spending.

“Ultimately I would like this to be a part of debt ceiling negotiations,” House Majority Leader Steve Scalise said. “It’s about time that President Biden actually pick up the phone, call Speaker McCarthy and accept his offer to go sit down and talk. This would be one really good item to help get those talks further along.”

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Energy permits may be more fertile ground for compromise, a senior Republican aide said. The idea also has buy-in on the Senate side as a possible way to seal a debt ceiling deal with Democrats.

“The permitting issue is one for both sides. The left wants permitting because a lot of renewable projects are being stopped,” John Thune, the Senate’s No. 2 Republican, told reporters. “If we can find some common ground on that issue it would be a big win for everyone.”

Groups representing companies such oil giant Exxon Mobil Corp. and pipeline operator Enbridge Inc. to renewable power generator NextEra Energy Inc. are advocating for Congress to reach a permitting deal before the end of the summer.

“Today, the single biggest obstacle to building the infrastructure of the future is a broken permitting system,” nearly 350 groups, including the US Chamber of Commerce and the American Clean Power Association, wrote to Congress as part of a new permitting campaign launched Monday. “This effort won’t be easy but must be pursued to take full advantage of the once-in-a-generation investment opportunities before.

GOP proposal

Republican permitting reform, included in part of a sweeping energy package christened H.R. 1, would enshrine Trump administration changes to the National Environmental Policy Act, a more than 50-year-old law considered sacrosanct by many environmentalists.

The bill, which would mandate more oil and gas lease sales and repeal parts of Democrats’ massive climate law, would make it harder for states to block the construction of interstate pipelines that cross their borders and would make it easier to permit mining, drilling and other energy projects.

The White House has vowed to veto the legislation, saying the bill would “take us backward.” Progressive Democrats have said the bill would gut bedrock environmental policy and failed to include language speeding the permitting of high-voltage power lines that connect renewable energy projects to the grid.

There may be room for common ground, however.

“We always talk about permitting,” moderate Democratic Senator Joe Manchin said, referring to McCarthy. “We’ll get it done.”

Democrats have their own permitting overhaul proposals, including one written by Manchin and backed by Biden that would speed the approval process for transmission lines. The bill failed on a 47-47 vote in the Senate in the last Congress amid opposition from Republicans seeking political payback for Manchin’s pivotal vote on Democrats’ massive climate bill. 

“We will go to work with the Senate and get a real permitting bill in place,” Representative Cathy McMorris Rodgers, a Washington State Republican who chairs the House Energy and Commerce Committee, said Tuesday. “The biggest barrier to doing anything right now is permitting and the regulatory process.”

Energy changes may not be enough to gain the support of the most conservative Republicans, who demand deep spending cuts for a debt-ceiling increase.

“There will be no increase in the debt ceiling without spending cuts,” Florida Representative Matt Gaetz said. Gaetz and other members of the House Freedom Caucus planned to introduce a package of bills outlining $1 trillion in line-item spending cuts that could be attached to the debt ceiling this week.

House Republicans hold a narrow majority, but a bipartisan deal could still get through that chamber on the backs of Democratic support.

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