House Democrats are eyeing a repeal of all federal subsidies for the fossil fuel industry within President Biden’s massive $3.5 trillion spending package, arguing that the move is needed to not only pay for the proposal but also combat climate change and advance “racial justice.”
More than 50 House Democrats, led by senior members of the House Oversight Committee, sent a letter to Speaker Nancy Pelosi demanding an end to all federal support for the oil and natural gas industries. The lawmakers argued that the federal subsidies only serve to benefit big corporations at the expense of average citizens, particularly people of color.
“Fossil fuel subsidies should be repealed because, instead of enhancing American energy independence or creating jobs, they simply enhance the profits of fossil fuel companies,” the lawmakers wrote.
The Democrats noted that between the federal subsidies and incentives offered by state governments, the fossil fuel industry receives about $20.5 billion annually. The money, they say, could be used to pay for the $3.5 trillion package and advance “racial justice.”
“Curbing subsidies for this industry would also advance racial justice,” the lawmakers wrote. “Black and brown communities are disproportionately affected by fossil fuel pollution.”
House Democrats are eager to advance the repeal as part of the White House’s goal to reach net-zero greenhouse gas emissions by 2050.
Republicans, meanwhile, castigate the bill for seeking to punish traditional gas and oil producers in favor of “unrealistic” and untested energy alternatives
Earlier this year, Mr. Biden announced that the U.S. would aim to cut carbon emissions by more than 50% through 2030. For the administration to come even close to reaching the goal, a massive transformation in electricity generation, transportation, agriculture and manufacturing will be needed, experts say.
Since broad bipartisan support is unlikely for such a radical transformation, House Democrats hope to repeal the subsidies through Mr. Biden’s $3.5 trillion spending package. Democrats plan to pass it via budget reconciliation, which allows some spending measures to avoid the Senate’s 60-vote filibuster threshold and pass with a simple majority of 51 votes.
Last week, the House voted along party lines to begin drafting the package, which forms the centerpiece of Mr. Biden’s domestic agenda.
Democrats are pitching the $3.5 trillion bill as “human infrastructure” to sell for voters. They suggest the bill complements the $1.2 trillion bipartisan infrastructure bill, which focuses on roads, bridges and airport projects.
In reality, the bigger bill amounts to a wish list of liberal priorities such as proposals for climate change, amnesty for illegal immigrants, tuition-free community college and expanded health care. It would be funded, in part, by higher taxes on the wealthy and corporations.
It is unclear if the package can pass with a provision stripping subsidies for fossil fuels.
To reach the 51-vote threshold, the bill needs the support of Sen. Joe Manchin III, a key moderate Democrat from West Virginia. Mr. Manchin is seen as unlikely to support the measure, given the economic impact that the coal and natural gas industries have in his energy-producing state.
Mr. Manchin did not return requests for comment.