What to Know in Washington: Reconciliation Spurs Lobbying Frenzy

Fossil fuel defender Sen. Joe Manchin (D-W.Va.), who commands a linchpin vote in the Senate, is at the center of a lobbying crossfire over President Joe Biden’s $3.5 trillion economic package, with the energy industry and environmental advocates both vying for his support.

The battle over the bill’s energy provisions is just one fight playing out in Washington as industries have mobilized armies of lobbyists from sectors ranging from Big Pharma to manufacturing around what could be the biggest expansion of federal programs and spending since Franklin Delano Roosevelt’s New Deal.

House committees started writing the legislation last week, creating or expanding several social programs. Democrats want to push the legislation through both chambers by the end of the month using a procedure that averts Senate filibustering. But razor-thin majorities require the fractious Democratic caucus to overcome divides between progressives and moderates over the size and scope of the bill.

In the evenly divided Senate, it takes just one Democratic defection to sink the entire package, a fact that hasn’t escaped industry and advocacy groups spending millions to try to sway the handful of Democratic votes considered in play, including Manchin’s.

The fossil fuel industry is pushing to block dozens of proposals in the measure that it argues would hurt domestic oil and gas production in the name of fighting climate change. The American Petroleum Institute is running broadcast and digital ads in key states and congressional districts as part of a seven-figure campaign to block a fee on methane emissions, among other energy provisions, from the bill, arguing they would cripple an entire industry and affect thousands of workers.

On the other side, advocacy groups including the League of Conservation Voters and Climate Power have launched their own high-dollar media campaigns supporting the measures as a response to violent storms, floods, fires and droughts caused by global warming. Read more from Mark Niquette, Jarrell Dillard and Ari Natter.

Photographer: Al Drago/Bloomberg

Manchin departs the U.S. Capitol in Washington, D.C., on Aug. 3.

More on Democrats’ Reconciliation Plans

Democrats Slim Down Biden’s Tax Plan: House Democrats have drafted a package of tax increases that falls short of Biden’s ambition, an acknowledgment of how politically precarious the White House’s $3.5 trillion economic agenda is for party moderates. The House Ways and Means Committee will meet tomorrow to consider the proposals.

The Democratic proposal would raise the top corporate tax rate from 21% to 26.5%, less than the 28% Biden had sought, people familiar with the matter said last night. The top rate on capital gains would rise from 20% to 25%, instead of the 39.6% Biden proposed, the people said. The package of proposals, estimated to raise more than $2 trillion, are slimmed down to appeal to business-minded Democrats, many of whom hail from swing districts. And Democratic leaders, who need the party’s full support to push Biden’s agenda through Congress, will almost certainly pare them down further in the weeks ahead. Read more from Kaustuv Basu, Billy House and Erik Wasson.

Child Tax Credit Backed by House Democrats: House Democrats are seeking to extend the recently expanded child tax credit through 2025, endorsing a key component of Biden’s social safety net plan. The language is included in bill text released late Friday by the House Ways and Means Committee. The committee’s expansive proposal would also extend energy credits and allow the government to negotiate prices with drugmakers, among other changes. Read more from Kaustuv Basu, Alexander Ruoff and Erik Wasson.

Transport Bill Advances Housing, Climate Goals: Rail, transit near affordable housing, and carbon emission programs would get a funding boost in a House transportation panel’s portion of Democrats’ $3.5 trillion tax and social policy bill. The legislation would address many Democratic climate priorities, with $10 billion for high-speed rail and $4 billion to lower transportation greenhouse gas emissions, according to a summary the House Transportation and Infrastructure Committee released Friday. The panel will consider the proposal tomorrow. Lillianna Byington has more on provisions in the measure.

Politics & Influence

Five House Races to Watch Now With 2022 Map Unsettled: Plenty of House races are already on track to be highly competitive even with the 2022 elections more than a year away and a number of variables in flux. Democrats are in a defensive crouch as they brace to maintain control of the chamber, which they hold 220-212 with three vacancies. Their five-seat majority is one of the smallest in history and gives Republicans a decided edge, as the out-of-power party often makes large gains in midterms. Greg Giroux takes a look at five House districts worth watching now, despite those vast unknowns.

Nine States Set to Determine Senate Control in 2022: The Senate battleground is taking shape as summer comes to a close, with as many as nine states set to decide which party the 50-50 chamber tips toward in 2022. There are still a number of variables with the potential to shake up the competitive playing field, including the outcome of some crowded primaries and whether Republican Gov. Chris Sununu runs in New Hampshire. But the relatively narrow scope of states — less than 10 out of the 34 holding elections — is unlikely to expand. Read more from Kyle Trygstad.

Around the Administration

Today’s Agenda: Biden will travel to inspect wildfire efforts in the west today. Biden first heads to Idaho for a briefing at 12:15 p.m. from federal and state fire officials at the National Interagency Fire Center in Boise. Biden then travels to Sacramento, Calif., where he’ll receive a briefing from local, state and federal emergency response personnel at 2:40 p.m. on the effects of recent wildfires. Biden will speak from the Sacramento airport at 4:25 p.m. on the administration’s response to the wildfires.

• The president will end the day at a campaign rally for California Gov. Gavin Newsom (D), who is facing a recall election. Biden is scheduled to deliver remarks at the rally at 7 p.m.

Biden to Announce New Vaccine Aid: Biden will announce his next steps to boost the global vaccine supply before this year’s United Nations General Assembly begins, U.S. Surgeon General Vivek Murthy said. Biden is weighing a multilateral meeting ahead of the U.N. leaders’ sessions aimed at vaccine supply, and has said he will announce new vaccine measures this month. Murthy told CNN yesterday that the announcement will precede the U.N. sessions. “The president will be making announcements ahead of the UN General Assembly about additional measures that we’re taking to help vaccinate the world,” Murthy said on CNN’s “State of the Union.” The session at which world leaders address the U.N. begins on Sept. 21. Read more from Josh Wingrove.

Biden Marks Two Decades Since 9/11: Few Americans have been closer to the wars, legal debates and political discord that split America following the Sept. 11 terrorist attacks than Joe Biden. As a senior senator, Biden helped write legislation that shaped the U.S. response to the attacks. As vice president, he advised Barack Obama on the continued U.S. retaliation, including the 2011 raid into Pakistan that killed Osama bin Laden. Now as president, Biden is trying to turn the page and reorient U.S. priorities—an aspiration that led to the hasty U.S. withdrawal from Afghanistan last month. Read more from Jennifer Epstein.

• Biden on Saturday defended his decision on Afghanistan, citing polls showing that a majority of Americans wanted the 20-year war to end, Jenny Leonard and Nancy Cook report. “But the flip of it is, they didn’t like how we got out,” he told reporters in Shanksville. “But it’s hard to explain to anybody, how else could you get out.”
• The Federal Bureau of Investigation declassified a secret internal memo on its investigation into allegations that Saudi Arabia’s government provided assistance to the terrorists that carried out the Sept. 11 attacks. The 16-page, partially redacted memo doesn’t draw any conclusion on the allegations, though it details links and contacts between the terrorists and Saudi nationals living in the U.S. at the time, including one of the country’s diplomats. Read more from Rich Miller.
• Washington is experiencing an uncharacteristic bout of humility about the uses of military power, raising the question: What if anything did America learn from two decades of conflict across the greater Middle East? Peter Martin and Roxana Tiron detail five tentative lessons stand out.

Migrant Trafficking Probe Echoes Earlier Failures: News that the federal government may have released teenage migrants to labor traffickers has triggered memories of similar incidents in the past, and drawn attention to recommendations that went unfulfilled. Six years after an Ohio egg farm trafficking case incited widespread public scrutiny, federal law enforcement is examining an apparent recurrence involving poultry processing plants in multiple U.S. jurisdictions, Bloomberg Law reported in August.

A lengthy bipartisan congressional probe of the Ohio case, sweeping policy recommendations from outside groups, and new screening protocols were all intended to prevent a federal agency from ever again releasing unaccompanied children into the hands of labor traffickers. Yet the new investigations, some of which appear to involve dozens of children sent to the same government-approved sponsor, suggest those efforts fell short. Read more from Ben Penn and Ellen M. Gilmer.

North Korea Tests New Cruise Missiles: North Korea said it successfully test-fired “new-type, long-range” cruise missiles on Sept. 11 and 12, ratcheting up tensions as Biden’s nuclear envoy heads to Asia for talks. The missiles flew for more than two hours over land and waters off North Korea in “pattern-8 flight orbits” and hit targets 932 miles away, the state-run media Korea Central News Agency reported. The missiles are a “strategic weapon of great significance,” it said. Read more from Yueqi Yang and Nathan Crooks.

IAEA, Iran Signal Some Progress on Nuclear Program: The U.N. nuclear watchdog signaled progress in talks with Iranian officials in Tehran over access to the country’s expanding program, yet prospects for reviving the crippled atomic deal with world powers remain unclear. Tehran said International Atomic Energy Agency inspectors would be able to replace damaged surveillance cameras and memory cards at atomic sites following a “constructive” meeting with IAEA Director General Rafael Grossi yesterday. Read more from Jonathan Tirone and Arsalan Shahla.

Prominent Afghan Female Leaders Have Fled or Are Hiding: Even as the Taliban seek to assure the world they’ve become more moderate, most of Afghanistan’s top female leaders who emerged over the past two decades have fled or are in hiding. In recent weeks, Taliban fighters have fired shots in the air to disperse protests in Kabul and other cities by women demanding participation in government as well as rights to education and jobs. A major rallying point for these protests have been the exclusion of women from the new cabinet unveiled last week, a step back from U.S.-backed governments that included female lawmakers and technocrats. Read more from Archana Chaudhary and Eltaf Najafizada.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Giuseppe Macri in Washington at gmacri@bgov.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Giuseppe Macri at gmacri@bgov.com