Republican leaders inject energy policy into debt ceiling fight

House Republicans are aiming to use their leverage in debt ceiling negotiations to secure passage of some components from their flagship energy bill.

“I would like this to be part of a debt ceiling negotiation,” House Majority Leader Steve Scalise (R-La.) said Tuesday when talking about the bill, dubbed the Lower Energy Costs Act, which he is leading in the House.

The package, which was given the designation of H.R.1, includes both largely partisan measures aimed at bolstering the oil and gas industry and measures that have garnered interests from both parties, such as streamlining the permitting process for energy endeavors like gas pipelines and renewable energy projects.

Speaker Kevin McCarthy (R-Calif.) also named “measures to lower energy costs” as an area he would like to talk about in relation to the debt limit in a letter to President Biden sent on Tuesday to ask for a meeting.

“This is one item that will lower costs on families and lower inflation and generate more revenue to the federal government. It will get real robust growth in our economy, just like some of the other items that Speaker McCarthy put in his letter to President Biden,” Scalise said.

Rep. Garret Graves (R-La.) has also made a connection to the debt ceiling.

“In my mind, this is part of debt ceiling because this bill turns the spigot back on for billions of dollars in revenue to the United States Treasury,” Graves told The Hill when talking about the bill earlier this month.

The Congressional Budget Office estimated this week, however, that enacting the bill would increase the deficit by $400 million between 2023 and 2033 by reducing direct spending by about $6 billion but also reducing revenues by $6.4 billion.

The House is expected to vote on the full H.R.1 package on Thursday, though it is not expected to move beyond the lower chamber — at least not as one intact bill. 

Senate Majority Leader Chuck Schumer (D-N.Y.) has said the bill as a whole would be dead on arrival in the Senate, but he also expressed interest in striking a deal on permitting reform — giving the House GOP an opening to extract passage of some measures in their bill in exchange for raising the debt ceiling.

However, Senate Budget Committee Chairman Sheldon Whitehouse (D-R.I.) rejected the idea of making a deal with Republicans to raise the debt limit in exchange for energy policy concessions. 

“That’s not the way American democracy works,” Whitehouse told The Hill. “We have regular order, you put things through committee. They’re public. Everybody gets to have their say.”

“You don’t sneak into a back room with a hand grenade and try to bully other people into some secret deal that you know the public hates,” he added. 

Rep. Bruce Westerman (R-Ark.), the chairman of the House Natural Resources Committee, meanwhile, gave a somewhat lukewarm response when asked about the possibility of adding energy policy into debt negotiations. 

“I’m OK with that. I think we just need to have a concise, clear concession that we want that addresses the deficit,” Westerman told reporters. 

“We can’t just continue to raise the debt ceiling and not focus on what’s causing the debt to go past the debt ceiling, and energy policy would address that because when we produce energy here at home, it’s a huge economic driver and would mean more revenue to the federal government, especially if we’re coming off of federal lands with it, but I think there’s other things as well,” he added. 

While the White House has expressed opposition to the Republican bill, it’s not clear whether it would be open to such negotiations. 

Biden has resisted negotiating on the debt ceiling and called on Republicans to pass a “clean” increase separate from other agreements. His letter responding to McCarthy on Tuesday did not directly address McCarthy’s comment about energy costs and instead called on House Republicans to release their budget proposal by Easter. 

The GOP political maneuvering on energy measures echoes back to Sen. Joe Manchin’s (D-W.Va.) ill-fated efforts last year to try to attach permitting reform to the omnibus spending package. 

Last year, Manchin sought to tie his own effort on permitting reform — which Senate Republicans rejected as not significant enough — to the must-pass legislation in order to gain support for getting it across the finish line. 

Biden, Schumer and a number of other Democrats supported Manchin’s permitting efforts. But the pieces of Manchin’s deal that Democrats liked, including measures making it easier for the federal government to bolster electricity transmission and thus renewable energy, are not present in the Republican package.

Bipartisan talks on permitting reform have continued into the new Congress, though it’s unclear if lawmakers will be able to reach an agreement on that front, or what the timeline of such an agreement would be.