POLITICO Playbook: The carbon tax makes a comeback
By RYAN LIZZA, TARA PALMERI, RACHAEL BADE and EUGENE DANIELS
10/19/2021 06:10 AM EDT
DRIVING THE DAY
BETTER THC FOR DC? — Some big D.C. marijuana news via our colleague Natalie Fertig: A legit cannabis industry, like the kind found in civilized states such as Colorado, may soon be on the way. The so-called Harris rider, which has prevented Washington from implementing a tax and regulatory system for pot every year since D.C. voters legalized marijuana in 2014, is not currently included in the House and Senate appropriations bills. The Harris rider has left D.C. with a gray market for pot that mixes some of the worst aspects of criminalization (unregulated products sold by often sketchy sellers) and fewer of the benefits of legalization (safer products and a new source of tax revenue).
HOW THE CARBON TAX WAS RESURRECTED — An unusual confluence of factors have brought back a climate-change fighting policy that many Democrats saw as politically toxic: the carbon tax.
While the idea has long been the favored tool of economists (Treasury Secretary JANET YELLEN is a strong supporter), some Republicans (like Sen. MITT ROMNEY) and the American Petroleum Institute, the Biden White House has always opposed pricing carbon. The president’s staff has feared both the general politics and the specific fact that a carbon tax could violate the president’s pledge not to raise taxes on Americans making under $400,000 a year.
Instead, JOE BIDEN placed his faith in a more complicated plan as the main driver to reduce CO2 emissions: the Clean Electricity Performance Program, drafted by Sen. TINA SMITH (D-Minn.), which would pay utilities to shift to clean energy and fine those that didn’t.
But the CEPP now seems almost dead, a casualty of reconciliation Grim Reaper JOE MANCHIN. Proponents of the plan say that Manchin, despite his public opposition to the Biden version, spent weeks engaged in negotiations over a modified CEPP that was friendlier to coal and natural gas, but eventually declared it unworkable.
“Manchin and the White House were negotiating on CEPP,” said a source familiar with the talks. “And Manchin was into something — likely a lesser version or a watered-down version — but still something. And then he decided no CEPP at all. So it’s not like he had always been against it, that was a new position. … Now the White House is looking to meet targets without CEPP.”
Zack Colman, who covers the issue closely for POLITICO, told us that while his sources say CEPP isn’t “technically dead” — an assessment shared by a top White House official — the fact that Manchin, who talked to Biden over the phone Monday, isn’t actively offering ideas for how Democrats and the White House could make it work for him is just as problematic.
“Basically the question is can the White House revive CEPP in some form?” asked the source close to the talks.
The answer from Senate negotiators is that it’s unlikely. And several progressive Democrats are happy to have a shot at resurrecting the carbon tax, which is supported by Democratic Sens. RON WYDEN (Ore.), CHRIS COONS (Del.), MARTIN HEINRICH (N.M.) and BRIAN SCHATZ (Hawaii), among others.
One Democratic senator involved in the climate negotiations said that a carbon tax was still in the mix and that “we are getting pretty close” to a deal. (Majority Leader CHUCK SCHUMER has previously told Wyden to make sure any carbon tax complies with Biden’s $400K tax pledge, which could be accomplished by sending rebates back to consumers.)
ENTER SINEMA: The return of the carbon tax has also been facilitated by Sen. KYRSTEN SINEMA (D-Ariz.), whose revolt against some of the other tax hikes in the Biden plan forced legislators to come up with additional options. Those include a fee on carbon, which Wyden, who as Senate Finance chair is in charge of writing the tax provisions, was happy to put back on the policy menu.
The AP sees things headed in the direction of a carbon tax as well, noting that a “middle ground” proposal after the demise of CEPP could include Wyden’s “tax credits for energy producers that reduce emissions, and pollution fees to be paid by industries for every ton of planet-warming carbon dioxide they emit.”
Finally, CNN reports that Manchin himself broke the news to Smith that the West Virginian couldn’t back any CEPP:
“‘He told me last week he just didn’t think he could get there on the clean electricity program,’ Smith told CNN. ‘But rolling back the CEPP — which is a foundation of the President’s action plan — that’s a huge concession. The question on my mind is what are we going to do instead?” She said senators are now considering a carbon tax.
But CNN also added this rather important caveat: “[I]t’s unclear if Manchin will support that.”
Good Tuesday morning, and thanks for reading Playbook. Drop us a line: Rachael Bade, Eugene Daniels, Ryan Lizza, Tara Palmeri.
FIRST IN PLAYBOOK — In a new memo obtained by Playbook, MATT BENNETT and JIM KESSLER of Third Way, the centrist think tank, are warning fellow Democrats that it’s time to broker a deal or risk losing their congressional majority. “It is time that the two sides reach a deal and reap the rewards of mutually assured success,” the pair writes. “If they don’t, our Democratic majority will reap a whirlwind of political destruction.”
Interestingly, they take it as a given that the two major Biden bills are not going to be separated: “The fate of the bipartisan infrastructure bill is now affixed to the Build Back Better reconciliation package, despite lines drawn in the sand by some moderates.” The full memo
— 9:30 a.m.: The president will receive the President’s Daily Brief.
— 2 p.m.: Biden, VP KAMALA HARRIS and Yellen will meet with House progressives in the Oval Office.
— 4:30 p.m.: Biden, Harris and Yellen will meet with a bicameral group of moderates in the Oval Office.
Press secretary JEN PSAKI will brief at 1 p.m.
THE SENATE will meet at 10 a.m. to take up CHRISTINE O’HEARN’s judicial nomination, with a cloture vote at 11:30 a.m. It will then recess from 12:30 p.m. to 2:15 p.m. for weekly conference meetings, with a potential confirmation vote on O’Hearn at 2:20 p.m. The Finance Committee will hold a hearing at 9:30 a.m. on CHRIS MAGNUS’ nomination as Customs and Border Protection commissioner.
THE HOUSE will meet at 2 p.m. to take up several bills, with first and last votes predicted between 6:30 p.m. and 7:30 p.m. The Jan. 6 select committee will meet at 7:30 p.m. to vote on holding STEVE BANNON in criminal contempt of Congress.
MORE MEETINGS COMING: CNN’s Kaitlan Collins and Phil Mattingly report, “A source familiar with the President’s private schedule says it is filled [this week] with blocks of ‘congressional time,’ which the President uses to make phone calls, meet with lawmakers in person or talk over his legislative strategy with top aides. … Manchin and Sinema are expected to get a solo audience with the President.”
FLAG IT: Biden will participate in a televised CNN town hall in Baltimore on Thursday, moderated by ANDERSON COOPER.
BERNIE VS. MANCHIN — Burgess Everett and Marianne LeVine have a story about the pair’s ongoing standoff and how the fate of Biden’s legislation could hinge on the outcome. The two met Monday and then posed for pictures as if they’re old pals after a weekend of trading barbs.
No apologies. When CNN’s Manu Raju asked Sen. BERNIE SANDERS (I-Vt.) if he apologized for publishing an op-ed in Manchin’s home-state Charleston Gazette-Mail, Sanders asked the longtime Senate reporter, “Did you apologize for the article you wrote?” Meanwhile, Manchin poured cold water on the idea that Democrats can reach a reconciliation deal by Halloween.
TUBERVILLE GETS THE TERRIS TREATMENT — Sen. TOMMY TUBERVILLE (R-Ala.) and his vote against certifying Biden’s election victory are the subject of Ben Terris’ latest WaPo profile. He begins by recounting a storage closet huddle of a dozen or so Republican senators who had planned to object to the certification but were now, amidst the chaos of the Jan. 6 insurrection, reconsidering what to do. “I do remember saying we have to pull the country together,” Sen. JAMES LANKFORD (R-Okla.) recalled. “I didn’t really listen to them,” Tuberville said.
Terris writes that Tuberville has emerged as less of a firebrand, more of a back-slapper since then: “Coach, like most members of his party, is not dwelling on what happened on Insurrection Day. But if a new senator casts a vote at odds with the very foundation of democracy, what makes him think he can just move on?”
DEMOCRATS BLINK ON IRS CRACKDOWN? — Democrats today are expected to reveal a “scaled-back version” of the party’s proposal to use the IRS to crack down on tax cheats. The move, scooped by WaPo’s Jeff Stein, comes after the banking industry and Republicans called foul, suggesting the proposal would be a gross invasion of people’s bank accounts and privacy.
The change: “Initially, the Department of Treasury and Senate Democrats had proposed requiring financial institutions to provide … information on bank accounts with more than $600 in annual deposits or withdrawals. … [T]he new proposal will instead require the provision of additional information for accounts with more than $10,000 in annual deposits or withdrawals.”
MOST UNSURPRISING NEWS EVER — DONALD TRUMP filed suit Monday against the House’s Jan. 6 committee and the National Archives, an effort to block access to White House records related to the attack, Betsy Woodruff Swan and Kyle Cheney report. This has been Trump’s M.O. for literally decades, but especially while he was in the White House.
The former president is arguing: 1) The panel has no “legislative purpose” for the probe; 2) the request was overly broad; and 3) he still has a right to protect information guarded under executive privilege.
“Trump’s team is also asking for the court to have the Archives first identify all documents from Trump’s White House that could be responsive to the request, then let Trump’s lawyers fully review them before sharing them with Congress. That process could take years.”
TRUMP DEPOSED — WSJ has more on the four hours of testimony the former president gave Monday: “Trump testified under oath Monday for a 2015 lawsuit filed by protesters who accused the then-presidential candidate’s security guards of assault, marking the first time the former president is known to have been deposed since leaving the White House.”
SCOTUS WATCH — “The Supreme Court on Monday agreed to a request from abortion-rights advocates and providers to quickly consider taking up their challenge of a restrictive Texas law that bans most abortions after as early as six weeks of pregnancy,” CNBC’s Kevin Breuninger reports. “If the court agrees to consider the case on an expedited basis, it could accept briefs, hear arguments and deliver a ruling much faster than if the case had to wind through the normal court channels.”
— The Biden administration is asking the Supreme Court to block the law, too, AP’s Mark Sherman reports.
Colin Powell, three months before he died, told Bob Woodward: “Don’t feel sorry for me, for God’s sakes! I’m  years old … I haven’t lost a day of life fighting these two diseases. I’m in good shape.” A full recap by Woodward
Matt Gaetz’s old “wingman” Joel Greenberg is getting more time to cooperate with federal prosecutors on a “different investigation.”
Dan Bongino, the conservative Fox Nation radio show host, threatened to quit his job if a vaccine mandate were implemented for employees. Bongino is vaccinated but declared on his show Monday: “You can have me or you can have the [vaccine] mandate. But you can’t have both of us.”
Huma Abedin, in an excerpt of her forthcoming book in Vogue, recounted the moment “life as I knew it was officially over.” (When her then-husband Anthony Weiner confessed that the “indecent” picture of a man in boxers sent from his Twitter account was, in fact, him.)
Carole King is not only a very talented singer-songwriter — she’s also really good at raising online dollars for Democrats. The Terry McAuliffe campaign says she’s brought in $75k via email solicitations, making her “a top 10 performing email signer for us.”
KEEPING THE WORLD’S OLDEST MARRIAGE TOGETHER — Over 200 people turned out to the French ambassador’s residence in D.C. on Monday to see Steve Clemons accept France’s Legion of Honor. French Ambassador Philippe Etienne dubbed Clemons “one of the founding fathers of American democracy.” Sen. Mark Warner (D-Va.) said, “After the unfortunate things that have happened recently, I would have never thought in my wildest dreams that it would be Steve Clemons who would help reconcile and bring together two nations who have been friends since the birth of this country.”
— SPOTTED amidst the trays of caviar blinis: Sens. Amy Klobuchar (D-Minn.), Sheldon Whitehouse (D-R.I.) and Ed Markey (D-Mass.), Rep. Debbie Dingell (D-Mich.), Wendy Sherman, Gayle Manchin, Daren Starr, Gen. George Casey, Gen. John Allen, Carrie Budoff Brown, Abby Phillip, Greg Craig, Bob Cusack, Andrea Mitchell, Greta Van Susteren, John Coale, Sam Feist, Joe Hack, Juleanna Glover, Janet Donovan, Tammy Haddad, Jim Acosta, Elizabeth Landers, Kimball Stroud, Linda Douglass, John R. Phillips, John Garcia, Kristi Rogers and Margaret Carlson.
SPOTTED at an advance screening of “Belfast” at the Burke Theatre at the Navy Memorial on Monday night: director Kenneth Branagh, Andrew Elliott, Sens. Pat Leahy (D-Vt.) and Susan Collins (R-Maine), Irish Ambassador Dan Mulhall, Kelly O’Donnell, Joe Crowley, Bob Costa, Tim Barnes, Jack Cline and Martin Seiff. Pic
TRANSITIONS — Natasha Eckard Hammond is now director of government and external affairs at NetJets. She most recently was public policy adviser at Squire Patton Boggs, and is a John Boehner alum. … Stephanie Dominguez Walton is joining the Latino Victory Project as a development director. She most recently was major gifts officer for Planned Parenthood Mar Monte.
WEEKEND WEDDINGS — Kristi Boswell, counsel at Alston & Bird, and Andrew Miller, principal product designer at Facebook Privacy, got married Saturday at Eastern Market North Hall. They met in 2017 at the White House working on H-2A visa reform together when she was a senior adviser to Agriculture Secretary Sonny Perdue and he was immigration lead at the U.S. Digital Service. Pic … Another pic
— Casey Black, press secretary for Tennessee Gov. Bill Lee, and Douglas Sellers, managing partner of Sellers Strategies and an OPIC alum, got married in Nashville on Saturday, Casey’s birthday. The two met in 2015 as Capitol Hill staffers for former Sen. Bob Corker (R-Tenn.). Pic … Another pic … SPOTTED: Bill and Maria Lee, Ray Washburne, Geronimo Gutierrez, Will Doffermyre, David Bohigian, Ryan Brennan, Edward Burrier, Patrick and Lindsay Clifton, Joe Hagin, Liz Horning, Derek Lyons, Austin Chambers, Clay Ryan, Blake Harris, Elizabeth Gregory, Margo Martin, John Rader, Amy Lawrence and Kimble Ratliff.
WELCOME TO THE WORLD — Zach Bauer, director of political affairs at MO Strategies and a Mike Pence alum, and Meghan Patenaude Bauer, VP at Granite Housing Strategies and a Mike Pence and FHFA alum, recently welcomed Charles Zachary Bauer. Instapic
— Jordan Richardson, a federal law clerk and Trump White House alum, and Helena Richardson, director of the Young Leaders Program at the Heritage Foundation, welcomed Ezra on Sept. 25. Pic
— Staci McDermott, assistant director of comms at the McCain Institute for International Leadership, and Tyler McDermott, territory manager and team lead for Supreme Orthopedic Systems, welcomed Roman Jackson McDermott on Friday. Pic
HAPPY BIRTHDAY: Rep. Kurt Schrader (D-Ore.) (7-0) … Grover Norquist of Americans for Tax Reform … NYT’s Carl Hulse … Amy Walter … Fox News’ Steve Doocy … former RNC Chair Michael Steele … Katie Rayford of Slate … POLITICO’s Kyle Cheney, Sarah Wheaton and Jacinta Lam … Edelman’s Jeremy Gosbee … Steven Greenhouse … Kevin Keane of the American Beverage Association … Kathryn Fanlund of the Legal Services Corp. … Jay Footlik … Kelley Anne Carney … Lauren Crawford Shaver of Forbes Tate Partners … Ray Day of the Stagwell Group … Andrea Bernstein … Brandon Webb … Will Cadigan of CNN … Dave Lapan … Dana Brown Ritter … Dale Brown of the Financial Services Institute … Philip Minardi … Sam Heitner … Kimberly Greenplate of the American Foreign Service Association … Marc Sklar … former Rep. Patrick Murphy (D-Pa.) … Winston Lord … Amy Carter … Brunswick Group’s Julia Schechter … Rex Smith … Sean Smith of Porter Novelli … Shelby Coffey … Yoram Ettinger … Michael Paul Carey … WaPo’s Anthony Faiola … Megan Powers
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