The Washington PostDemocracy Dies in Darkness

Clash over energy projects could threaten government funding bill

Democrats want to include Sen. Joe Manchin’s proposal in legislation to avoid a shutdown. Republicans don’t.

Sen. Joe Manchin III (D-W.Va.) speaks during a news conference on Tuesday at the Capitol. Lawmakers are negotiating over proposals to keep the government funded after the fiscal year ends on Sept. 30. (Jabin Botsford/The Washington Post)

Congress is trying to stay on track to avoid a government shutdown after next week, but a new fight has emerged over legislation to expedite environmental permitting for energy projects.

The federal government’s fiscal year ends on Sept. 30, and without a new law to fund the government, it would have to shut down. Senate Democrats are pushing to include the permitting language in a stopgap bill that would fund operations temporarily until mid-December.

Democrats and Republicans alike agree in principle about the need to reform the environmental review process. And both are loath to shutter the government on the eve of a hotly contested midterm election. But policy disagreements and past partisan squabbles now threaten to throw talks on a continuing resolution — a bill to sustain government funding at current levels — off course.

When Democrats in August passed the Inflation Reduction Act, their landmark health-care, climate change and tax policy law, Senate Majority Leader Charles E. Schumer (D-N.Y.) struck a deal with moderate Sen. Joe Manchin III (D-W.Va.) to pass permitting reform this year.

That deal surprised Republicans, who were hoping Manchin would not vote to approve President Biden’s ambitious spending bill. Bitter feelings after the law’s passage remain, and they’ve seeped into budget negotiations.

Schumer in a news conference Tuesday reaffirmed his plan to link the permitting bill to a government funding effort. Manchin held his own news conference and warned that Republican opposition to the bill could cause a government shutdown.

“We’re going to vote and it’s going to be in the [legislation], okay?” Manchin said. “And if [Republicans] are willing to say, ‘We’re gonna close down the government,’ because of a personal attack on me, or basically not looking at the good of the country, this is what makes people sick about politics.”

Republicans countered that they couldn’t support a proposal they have yet to see, though a draft of the legislation leaked in August, and it has not substantially changed, according to a person familiar with the negotiations who spoke on the condition of anonymity to discuss the talks.

“What I’ve been saying to Joe, and I just said it to him again on the floor two minutes ago, is the best way to help move this is (a) to show it to people, and (b) be open to ideas and ways to improve it,” Sen. Dan Sullivan (R-Alaska) told The Washington Post on Tuesday. “So it remains to be seen if they’re going to do either of those. The less they do that, the less likely it ends up passing.”

The standoff does not guarantee a shutdown: Democrats could eventually opt to pass legislation to fund the government without the permitting changes. House Speaker Nancy Pelosi (D-Calif.) has also suggested that her chamber could attach the permitting measures to other less controversial legislation, amid complaints from liberal caucus members concerned about the effects of fossil fuel production on the climate crisis.

Both chambers are also ironing out details for aid to Ukraine and money for victims of natural disasters, including Hurricane Fiona in Puerto Rico, Western wildfires and floods in Kentucky. Lawmakers in both parties say those provisions are not likely to hold up the continuing resolution.

Manchin is set to release the text of his permitting proposal on Wednesday. Early summaries showed it would shorten environmental review periods for energy project construction and require the president to designate 25 energy projects of “strategic national importance.” It would also require agencies to expedite approval of the Mountain Valley Pipeline, a 303-mile system awaiting final approval that is popular in Manchin’s home state.

Republicans have long sought to reform federal permitting processes, though typically in a more sweeping manner, which critics say would declaw environmental regulatory agencies. But some Republicans are still irate with Manchin for supporting Democrats’ health-care, climate change and tax law, and they aren’t inclined to help Schumer and Biden use the government funding legislation to keep the agreement they reached with Manchin to win his vote last month.

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“This is not the time for Republicans to be rallying around Democrats,” Sen. James M. Inhofe (R-Okla.) told The Post on Tuesday. “We’re not excited about renewing all of our wonderful relationships with [Manchin].”

A government shutdown could prove catastrophic, both for the economy and for either party’s electoral prospects in November. If funding runs out, crucial federal services — such as anti-poverty food assistance and customer service functions at the Social Security Administration and Internal Revenue Service — would close completely or face immense strain. Some of the federal government’s 2.1 million employees would also have their paychecks deferred.

Both parties are staring down polling data that shows control of both chambers of Congress is essentially a toss-up. Any government shutdown this close to the elections would lead to vicious mudslinging in the campaign’s final furlong.

In the evenly divided Senate, Democrats need 10 Republicans to vote for the funding legislation to defeat a filibuster, a number that GOP senators have said this week may be hard to come by if Manchin’s permitting proposal remains attached.

Potentially setting up additional conflict, Sen. Shelley Moore Capito (R-W.Va.) introduced competing permitting legislation last week. Her proposal would strike the Environmental Protection Agency’s mandate to review the ecological impacts of newly authorized federal energy projects and would allow states to lease federal lands within their borders for energy production. Like Manchin’s, it also requires expedited approval of the Mountain Valley Pipeline.

Manchin derided Capito’s approach as a “messaging bill” meant to stir up opposition to his approach. But 47 of the 50 GOP Senators have signed on as co-sponsors, making it unclear if Democrats could find 10 Republicans who would support Manchin’s policy instead.

“If there are 10 Democrats willing to vote for Sen. Capito’s bill, that would be a good outcome,” Sen. Ted Cruz (R-Tex.) told The Post.

“I don’t want to shut the government down, and I want to do permitting reform,” said Sen. John Neely Kennedy (R-La.), “but I want it to be real permitting reform.”

Maxine Joselow contributed to this report.