The Debt Ceiling and the Environment

GOP demands would devastate environmental protection

Kevin McCarthy  sketched the outlines of his opening demand to raise the debt limit last week, and the bill has now been released.  If adopted, it would have a devastating impact on environmental protection and climate action.  One impact would be budgetary – repealing much of the Inflation Reduction Act while kneecapping EPA’s ability to implement environmental laws more generally. McCarthy is also demanding regulatory changes that would foster fossil fuels and hamstring EPA’s regulatory power.

In terms of the budget, the plan requires all non-defense agencies to return to FY2022 spending levels. Government fiscal years, oddly, are labeled by the year that they end, so we’re really talking about spending from Sept. 30, 2021 to October 1, 2022. (McCarthy refers to this as “the same spending levels we operated under just last October”). Core inflation (not counting food and energy, which are more volatile) has been running at around 6%, so this amounts to a 6% cut in appropriations for EPA, the Transportation Department, and the Energy Department.  And in fact the cuts could be much larger, since additional cuts could be shifted from Defense to other agencies.

Since another piece of McCarthy’s demand is a 1% cap on future agency budget increases, the damage would last for a decade and increase over time. In addition, the bill would eliminate key provisions of the Inflation Reduction Act that are aimed at expanding the use of electric vehicles and renewable energy.

In short, Republicans are demanding that Biden agree to roll back the heart of the Administration’s climate policy. They might as well be demanding that he turn over control of government policy to Donald Trump.

Not content with demanding that Biden abandon his keystone policies, McCarthy also makes two regulatory demands. The first is for passage of HR 1, the Republicans’ “permit reform” bill.  Although the bill contains some provisions that would be helpful for renewable energy projects and transmission, it is slanted heavily in favor of fossil fuels. It mandates more frequent auctions of oil and gas drilling rights on federal land, cuts back the royalty the offshore oil companies would need to pay the government, bars any kind of pause on fracking, and prevents the Energy Department from blocking exports of liquified natural gas.

As a second demand, Republicans insist on passage of HR 277, better known as the REINS Act.  Under the REINS Act, a major rule may only take effect if Congress approves of the rule. A rule is classified as major if it results in an annual effect on the economy of $100 million or more, or otherwise has a significant effect on the economy.  That include nearly any significant EPA regulation and some that you’ve probably never heard of. A Republican caucus that is willing to risk crashing the economy to get its way is unlikely to exercise any discretion or judgment in reviewing regulations.

Wall Street seems sublimely confident that somehow or another Congress and the President will manage to come to a deal. McCarthy’s opening offer would require Biden to abandon large portions of his domestic platform. It seems unlikely that Biden will go along. All he would get in return under McCarthy’s proposal  is a paltry one year extension of the debt limit, after which the Republicans would be back demanding even more extreme concessions.  That’s a road that leads to nowhere good.


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Reader Comments

3 Replies to “The Debt Ceiling and the Environment”

  1. Prof. Farber, the thing that bothers me most about all the posts on Legal Planet is that you produce a lot of information among yourselves to prove that the human race is now threatened with total eradication, that is totally possible within this century.
    I am most thankful to Berkeley for making it possible for me to meet and marry my classmate and have 60 years of the best partnership I could ever want. But, we now have grandchildren whose future is threatened more than any human beings in history.
    So I am totally frustrated, to put it mildly, that the best educated people on the planet are totally incapable of protecting the future for our newest generations. The final chapter for the human race that we are living today never should be happening.
    You can point all the fingers you want at our political establishment, but it is also most tragically true for our academic establishment that bears responsibility for their failure to protect the human race from the global warming destruction of our environment that is out of control today. Thus “That’s a road that leads to nowhere good” shall become part of the epitaph for the human race due to failures by our political and intellectual leaders, as the Durant’s warned us in their history books that we should have learned from to prevent the destruction of our civilization. Along with, none of our leaders were capable of informing, educating and motivating the peoples around the world to save ourselves in time. God Help our newest generations.

  2. Prof. Farber, why isn’t there a prominent global warming spokesperson on the daily news to inform, educate and motivate the public to demand specific actions to protect our newest generations from having to suffer increasingly unacceptable worldwide environmental disasters we are already experiencing? So far, there is no intellectual, or political, spokesperson that we see on a frequent basis like Fauci is for the pandemic.
    We have been predicting unacceptable climate changes for over 50 years, so why doesn’t UC have any group dedicated to producing immediate implementation of the imperatives to protect and perpetuate an acceptable environment with necessary resources to protect the future for our nwest generations?
    Time has run out because our most necessary resources like water and food are already declining rapidly!
    We keep proving that dichotomies are killing us, on the internet, in Washington, throughout America and around the world. Far too many peoples just don’t want to join together to cooperate, even if it will save our planet and the human race. God Help our newest generations.
    One of the most destructive Us/Them dichotomies that threatens the future of the human race is between the Us Elite Academics Vs. the Them Impure Public, as documented by Richard Hofstadter and quoted by Nicholas Dirks in CALFORNIA Magazine.
    At the same level are the plethora of Greed and Hate dichotomies produced in Washington DC, almost resulting in the overthrow of American Democracy on Jan. 6, which is not over yet.
    Dan, it’s time we all adopted the Mother Jones Mantra:
    “Pray For The Dead and Fight Like Hell For The Living”
    I just hope we have enough time left to be able to survive because it seems like climate change disasters keep getting worse weekly if not faster.
    The reality check is that the Scripps Keeling curve is still not ramping down after all we have done so far, and the latest climate change disasters are ramping up hellaciously.
    Obviously what we have been doing is not making the right things happen fast enough, so when is UC (and/or other institutions) going to unite all necessary resources to make the right things happen so we can adapt in time!

  3. America’s bipartisan sacred cow:

    DOD’s budget FY 2021 was about $753 billion while EPAs FY 2021 budget was about $9 billion.
    See, 2022 IRA 1040 Instructions, p-108.

    “In terms of the budget, the plan requires all non-defense agencies to return to FY2022 spending levels.”

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About Dan

Dan Farber has written and taught on environmental and constitutional law as well as about contracts, jurisprudence and legislation. Currently at Berkeley Law, he has al…

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About Dan

Dan Farber has written and taught on environmental and constitutional law as well as about contracts, jurisprudence and legislation. Currently at Berkeley Law, he has al…

READ more