Effort to tie permitting reform to debt ceiling deal may slam into Senate hurdle

Efforts to get a speedy deal on permitting reform and incorporate it into a debt ceiling compromise could collide with policy disagreements in the Senate.

A key ally of Speaker Kevin McCarthy (R-Calif.) last week said permitting reform was among four policy areas that are low-hanging fruit for a bipartisan agreement that would lift the debt limit and stave off dire financial consequences.

“If I were the person that were trying to lead a successful negotiation, I would grab those four and start with those,” said Rep. Garret Graves (R-La.), adding work requirements for public assistance programs, spending caps and rescinding unspent COVID-19 funds to his list.

He gave a deal on permitting reform — which refers to policies aimed at speeding up approvals for energy and infrastructure projects — a “better than 50-50” chance of getting done.

Meanwhile, White House Infrastructure Coordinator Mitch Landrieu told reporters last week that while the debt limit and permitting issues weren’t necessarily connected, he described such reform as “in play” and helping rather than hurting.

But there’s still significant work to be done to find 60 votes to support permitting reform in the Senate.

Policies governing whether and how to build out more electric grid infrastructure have become a major sticking point.

For Democrats, making it easier to get more power lines up and running is major — because it is key to getting more renewable energy onto the grid.

But many Republicans last year raised objections to proposals to give the Federal Energy Regulatory Commission the authority to direct the buildout of power lines.

Now, several are saying they are amenable to at least some degree of policies to bolster electricity transmission, but they are still raising concerns about how transmission costs are distributed.

“I’d certainly be supportive of some modest siting federal backstop,” said Sen. Kevin Cramer (R-N.D.), referring to giving the federal government some additional authority to plan interstate power lines.

He added that costs should be done in a way where “you’re paying for the electrons you get.”

Lawmakers are working to hammer out the details, with key senators on each committee expected to meet soon.

But senators expressed skepticism they will be able to reach a permitting deal by June 1, the day the Treasury Department said lawmakers and the White House need to reach debt ceiling a deal before the U.S. defaults.

“We’re working towards it in committee, we’re going to have more meetings this week,” Sen. Shelley Moore Capito (R-W.Va.) said of permitting reform. “It’s possible, but as time gets closer, I don’t know.”

Sen. Tom Carper (D-Del.) noted he is set to release a discussion draft “within days” and said he is a proponent of “regular order” — that is, working through the normal committee process on legislation.

Cramer also said more time would allow lawmakers to get a more “comprehensive” agreement.

“I just think that if it’s June 1, it’ll be very, very modest. If we have until Aug. 1 and people got serious, maybe it could be more comprehensive,” he said.

On the broader debt ceiling talks, Speaker Kevin McCarthy appeared optimistic Tuesday after a White House meeting, saying, “It is possible to get a deal by the end of the week.”

Asked about the prospects and importance of permitting reform, the top House Republican did not directly answer, saying instead the GOP’s debt limit proposal includes “cutting the red tape so we can build things in America.”

Some House Republicans are reportedly trying to take on the issue another way — offering a two-step permitting plan that would include provisions aimed at speeding up environmental reviews now and put off the building up of power lines for later, Politico reported.

However, such an effort could face significant pushback from Democrats, who have said in the past that incorporating transmission reform is necessary for their support on permitting.

Another tension point on permitting is the Mountain Valley Pipeline, a West Virginia pipeline that has been championed by Sen. Joe Manchin (D-W.Va.) but alienated fellow Democrats, including Sen. Tim Kaine (D-Va.). Some Republicans also expressed last year that it wouldn’t be fair for such a package to contain benefits specifically for Manchin’s home state.

Discussions surrounding permitting were supercharged last year when Manchin struck a deal with Democratic leaders to pass a permitting package in exchange for his vote on the Inflation Reduction Act.

His proposal ultimately flopped in the Senate, getting 40 Democratic votes and seven Republican votes in favor, amid opposition from conservative Republicans who said it did not go far enough and progressive Democrats who expressed concern that shortening environmental reviews could limit community input into energy and infrastructure projects.

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