Auto Dealers Tell President Biden to Pump the Brakes on EV Mandates

WASHINGTON DC (11/30/2023) – This week, nearly 4,000 auto dealers from all 50 states sent a letter to President Biden calling on the administration to slow the implementation of proposed rules that mandate the sale of electric vehicles (EVs).

AEA President Thomas Pyle, and founding member of the Save Our Cars Coalition, issued the following statement:

“Auto dealers are in the business of selling cars. They want to stock vehicles that consumers want to buy. But this administration is so set on dictating which cars and trucks Americans should own, that their policies have upended the balance between supply and consumer demand.

Today, nearly 4,000 car dealers wrote to President Biden to explain these dynamics. As the last stop along the supply chain, dealers have the closest interaction with consumers and are most significantly impacted by policies that reduce the availability of cars and trucks that Americans want to buy.

Despite taxpayer-funded subsidies that artificially reduce costs, consumer demand for EVs persistently lags supply, and the vehicles sit on lots longer than gas- and diesel-powered cars. By speaking out, hopefully, these auto dealers will be able to help persuade the administration that American families should have the freedom to buy the vehicle that best suits their budget and lifestyle while encouraging fair competition in the automotive industry.”


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Bloomberg Spending Millions To Destroy America’s Power Grid

President Biden’s push for renewable energy in the generating sector and the billions that Biden and philanthropists like Michael Bloomberg are spending to rid the U.S. of coal plants and to drastically reduce natural gas plants will destabilize the U.S. electric power grid, damaging transformers and causing long-term outages, experts say.  Michael Bloomberg pledged $500 million in September toward shifting electricity production in the United States to wind and solar energy and shutting down its coal- and gas-fired plants. That donation adds to the $500 million Mr. Bloomberg pledged in 2019 to “finish the job on coal” and “accelerate the clean energy transition to reach the goal of 80 percent of total electricity generation” from renewables, according to an official statement. Bloomberg Philanthropies stated, “With 372 of 530 coal plants announced to retire or closed to date—more than 70 percent of the country’s coal fleet—this next phase will shut down every last U.S. coal plant.” The effort also slashes natural gas plant capacity in half, and blocks all new gas plants.

Europe has tried to transition from fossil fuels to wind and solar power and its efforts have failed. For instance, twenty years ago, Germany instituted “Energiewende” (energy transition) and has discovered the cost of electricity has skyrocketed. Germany spent hundreds of billions of euros to build wind and solar facilities since 2002, doubling its power generation capacity and boosting the share of renewables in the generation sector to 60 percent from about 10 percent. Despite the capacity increase, its electricity production has remained flat and the promise of lower electricity rates has not materialized. Instead, Germany’s “Energiewende” has delivered an increasingly unreliable electric system at a cost to consumers that is higher than virtually every other developed country. Germany is now in the process of de-industrializing and searching out lower cost energy countries to manufacture the products they once proudly did.

Because wind and solar power have significantly lower capacity factors than fossil fuel and nuclear plants, a greater amount of capacity is needed to produce the same amount of power. Also, as wind and solar power are weather-driven and intermittent, expensive battery back-up is required, which politicians do not consider when they push renewable energy, telling the public that wind and solar are almost free as they have no fuel cost. As Germany’s prices show, this is not the case.

Capacity Factors

The capacity factor for wind and solar is about 35 percent and 25 percent, respectively, compared to roughly 92 percent for nuclear and 85 percent for coal and natural gas when they are allowed to operate 24/7 and not just to back-up solar and wind plants. Wind and solar facilities are dispatched before coal and gas plants because they have no fuel cost and are therefore cheaper to operate once built.

The Closure of Coal and Gas Plants Is Eroding Reserve Margins

Reserve margins measure the amount of unused available capacity of an electric power system as a percentage of total capacity, i.e. the amount of capacity over expected peak demand. At one time and before the current trend of closing coal plants, electric utilities typically ran their power generation systems with a 20 percent installed reserve margin over expected peak demand. That reserve margin was to ensure that consumer demand would be met even during unpredicted events. The reserve margins, however, have been eroded with the transition to renewable energy as dependable plants have been shuttered. According to the Energy Information Administration, coal and natural gas plants will account for 98 percent of plant closures in 2023. Electric utilities have shuttered an average of 11 gigawatts of coal-fired capacity per year between 2015 and 2022.

Source: EIA

If electricity supply does not match demand, the grid’s hardware could be severely damaged, leading to long-term outages. Because wind and solar power are unpredictable sources, an auxiliary source of power is needed to balance it and most of that balancing power currently comes from natural gas. Many U.S. utilities are expanding their wind and solar capacity but not adding reliable backup facilities, hoping that they can draw on other regions when there is a shortfall. They are also drawing on emergency reserves, using the reserve as the auxiliary to balance their wind and solar projects.

Experts warn that operating so close to the margin is very dangerous. In 2015, former CIA Director James Woolsey was asked what would happen to Americans if the electric grid went down for an extended period. He testified before the U.S. Senate that there are two estimates on how many people would die from hunger, starvation, lack of water, and social disruption. “One estimate is that within a year or so, two-thirds of the United States population would die. The other estimate is that within a year or so, 90 percent of the U.S. population would die.”

Even the North American Energy Regulatory Corp. (NERC), which monitors America’s grid reliability, has warned that large segments of U.S. electricity infrastructure could become unstable because of a too-rapid retirement of dispatchable fossil fuel plants.

Wind and Solar Incentives

Despite the failings of wind and solar power, the Biden administration has increased their subsidies. The Inflation Reduction Act, passed entirely by Congressional Democrats and signed into law by President Biden, provides nearly $400 billion in grants, loans, and investment tax credits to build facilities and production tax credits to subsidize the energy they produce. On top of that are state laws and mandates that force utilities to prioritize the purchase of wind and solar power over coal and gas. New Environmental Protection Agency (EPA) rules mandate carbon dioxide (CO2) emissions limits and carbon capture requirements that will force utilities to transition away from coal and gas. Biden’s climate agenda includes a carbon-free power sector by 2035 and net-zero emissions economy no later than 2050.

Electric Bills Increase Even With Incentives

According to a 2022 study by McKinsey, “The transformation of the global economy needed to achieve net-zero emissions by 2050 would require $9.2 trillion in annual average spending on physical assets, $3.5 trillion more than today.” That means as the transition to renewable energy accelerates, consumers will continue to see their electric bills rise.

As North Carolina-based Duke Energy began to shutter its coal plants and build out a renewable infrastructure, utility bills quickly jumped by 20 percent. Wyoming residents are protesting a 29 percent increase in their electric bills, as their utility, Rocky Mountain Power, is transitioning to renewable energy. Wyoming is America’s top coal producer. However, its share of coal generation in 2022 dropped to 71 percent of electricity generation from 97 percent. At the same time, the share of wind power rose to 22 percent. Rocky Mountain Power claims that the price increases are because of higher coal and gas prices, but the residents are not believers.

In addition to the cost of a duplicative generation system, whether using gas plants as back-up or expensive batteries with energy obtained from excess wind and solar power, there is the cost of building a massive transmission network to connect urban areas where the electricity demand is concentrated to remote locations where it is windy or sunny with ample amounts of land to harbor enormous facilities. These costs are passed on to consumers in the form of higher energy bills.

According to Mark Mills, a senior fellow at the Manhattan Institute, the cost to store energy in grid-scale batteries is about 200-fold more than the cost to store natural gas to generate electricity when it is needed.” He said that “$200,000 worth of Tesla batteries, which collectively weigh over 20,000 pounds, are needed to store the energy equivalent of one barrel of oil.” “Even a 200 percent improvement in underlying battery economies and technology won’t close such a gap.” To top it off, China controls the world’s battery manufacturing industries, along with the supply chains that feed them.

Not All Countries Are Joining onto Biden’s Climate Agenda

The United States reduced its carbon dioxide emissions to about 5 billion metric tons in 2022, from about 6 billion in 2005. During that time, China nearly doubled its CO2 emissions to 11.5 billion metric tons from 6 billion metric tons and has announced plans for 100 new coal-fired plants in the coming years that easily produce power for 40 to 60 years. India also doubled its CO2 emissions during this time to a current level of 2.5 billion metric tons, and is continuing to use coal. For example, its coal production increased 19% year-over-year this October.

Advocates pushing renewable technologies, however, are not taking into account the CO2 emissions from mining and processing the critical minerals needed to manufacture the “green” technologies. Nor is there an accounting for the environmental damage from using often pristine land and seascapes to install and operate wind turbines and solar panels. According to the Brookings Institution, “Wind and solar generation require at least 10 times as much land per unit of power produced than coal or natural gas-fired power plants, including land disturbed to produce and transport the fossil fuels.”

Conclusion

The process of shuttering coal and nuclear plants has left the country at the whim of the weather, and dangerously short of dependable power that can be adjusted to meet fluctuations in demand. Besides the risk of outages, the transition to wind and solar power is increasing electric rates as more transmission lines are needed to get the power from windy and sunny areas to demand centers and as expensive battery back-up is required. The true cost of wind and solar power are not being reported by the Biden administration and other politicians that want to push solar and wind power. It is also all for naught as whatever the United States reduces in carbon dioxide emissions will be quickly made up for by developing countries, particularly China and India, who are continuing to develop their economies with coal power.

The Unregulated Podcast #157: Direct Communications Stated Directly

This week on The Unregulated Podcast Thomas Pyle and Mike McKenna are joined by Travis Fisher, the director of energy and environmental policy studies at the Cato Institute, for a wide ranging discussion energy issues in the news.

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American Families Not Buying Biden’s All EV Agenda

With slower than expected sales in electric vehicles, automakers are questioning their multibillion-dollar investments in new factories and raising doubts about the effectiveness of Biden’s federal incentives. General Motors delayed plans to expand its electric pickup truck production at a plant in suburban Detroit, and canceled a program with Honda to sell electric vehicles for around $30,000. Ford paused its $3.5 billion EV plant in Marshall, Michigan and $12 billion of its planned $15 billion EV investment, citing market conditions. Despite $1.7 billion of promised taxpayer incentives for the plant and site readiness, Ford is not confident it can run the Michigan plant competitively. Further, as electric vehicles are sitting unsold on dealer lots, automakers and dealers are slashing prices and piling on discounts to clear out the unsold inventory. High inflation and high interest rates are making vehicle purchases difficult for everyday people. Auto executives are worried that many consumers have hit their limit.

EV Prices Reduced through Rebates and Lease Deals 

EV sales promotions have taken different forms. Some automakers, such as Hyundai Motor and Ford Motor, are offering cash rebates as high as $7,500 on top of the federal tax credit on some models. Others are offering aggressive lease deals that offer cheaper monthly payments or shorter contract lengths to attract buyers. Many car companies are offering low-interest rate promotions to make pricey electric vehicles more affordable. On average, customers received about a $2,000 discount on an electric vehicle in September, compared with a year prior when they paid a $1,500 premium. Industrywide, shoppers paid around $930 less than the sticker price in September. As wealthier EV adopters have already purchased an electric vehicle, the industry is now confronted by a more reticent group of consumers, who are being squeezed by high interest rates and rising costs.

Electric vehicles are now some of the slowest sellers on dealership lots. In September, it took retailers over two months to sell an electric vehicle, compared with around a month for gas-powered vehicles and only three weeks for a gas-electric hybrid. That trend is expensive for dealers who take out loans to finance their fleet. The longer a vehicle sits on the lot, the more it eats into potential profit. At the end of September, automakers had 88 days’ worth of EV inventory, compared to 56 days for conventional models.

The discounting activity is helping to bring down the cost of battery-powered cars, which on average sold for about $50,683 in September, down from more than $65,000 last year. By comparison, prices overall for new vehicles remained at about $48,000. According to car executives and dealers, the discounts will likely continue for now, especially in the form of lease offers.

The discounts are threatening to exacerbate problems at startups, which are swiftly burning through their remaining cash. Luxury electric-vehicle maker Lucid in August marked down the price of its vehicles by up to $13,000, due to weakening demand. EV startup Fisker said that it was lowering the price of its Ocean Extreme SUV, a brand-new model that went on sale this year, by $7,500 in response to “competitive realities.” Fisker’s vehicles do not qualify for a federal tax credit because they are built outside the United States.

Climate Law Pushed Manufacturers into EVs

President Biden’s climate law, the Inflation Reduction Act (IRA), stimulated a surge of investment in electric vehicle production across the country, including tens of billions of dollars on battery plants across the South and new assembly lines near the Great Lakes. Under the law, companies get lucrative tax credits for investing in electric vehicle production and component parts like advanced batteries. But, the climate law has not drastically affected trends in electric vehicle sales. Expectations are that Americans will buy one million electric cars and trucks this year, continuing a steady trend of increased market share for electric vehicles, but not close to what is being manufactured. Even Tesla is considering abandoning its $1 billion investment in a plant in Mexico despite seeing a grow rate of 51 percent in revenue last year.

The reality is that electric vehicles are too expensive for the American public. A Ford F-150 Lightning starts at about $50,000, before federal tax credits of $7,500. A base model gasoline-powered F-150 starts at less than $37,000. GM’s Chevrolet Blazer starts at around $37,000, but the electric version costs a minimum of $56,000 before tax credits.  Even with those price differences, Ford says it is losing over $60,000 for every electric vehicle it makes for a total of $4.5 billion this year. Without an American supply chain, however, electric vehicles cannot qualify for the full $7,500 consumer tax credit. Without the full credit, a typical electric vehicle remains much less affordable than a conventional automobile. President Biden’s climate advisor Ali Zaidi has admitted that the administration’s programs include reducing Americans’ reliance on cars, i.e. speeding the process of getting Americans out of their personal transportation choices.

Those IRA requirements, however, do not apply to the leasing market, which explains a shift in consumer preferences. Many car shoppers lease electric vehicles instead of buying them because a Treasury Department regulation enables auto dealers to avoid the law’s made-in-America requirements for cars that they buy and lease to customers. The regulation allows shoppers to obtain the full federal tax credit for models that otherwise would not qualify. The auto dealers association calculates that more than half of electric vehicle transactions in the United States — excluding Teslas, which are not sold through traditional dealership models — are leased, a large increase from a year ago, when it was around 30 percent.

China in the Driver’s Seat

The vehicle transition is effectively subsidizing China, which leads the world in electric-car manufacturing and battery technology and is home to vast stockpiles of critical minerals needed for batteries and other components. The United States has been slow to invest in raw materials and parts needed for batteries, including mines producing minerals like cobalt, and factories making chemicals that go into batteries, partly because of Biden’s anti-mining actions. U.S. companies have even sold their interests in cobalt companies in the Democratic Republic of the Congo to Chinese companies. China is decades ahead of the United States in these endeavors, meaning it may be impossible to catch up because China’s control means it can flood markets and drop prices for minerals whenever a prospective mine is announced elsewhere, undermining the mine’s economic viability.

Chinese electric-vehicle-battery firms are becoming major export players.  Contemporary Amperex Technology (CATL) and carmaker BYD are the top two producers of EV batteries in the world. Chinese battery manufacturers, however, lag behind South Korean rivals outside China, but that could change due to CATL’s growth numbers. Chinese firms are eyeing big new factory expansions in Europe and in U.S. free trade partners as a way to sidestep current and future U.S. import restrictions—much like Japanese carmakers did in the United States in the 1980s. Chinese firms have announced overseas investments of more than 200 billion yuan, $27 billion, in batteries and materials with more than 80 percent of that in Europe. China has also become the world’s top exporter of electric vehicles.

Despite China’s monstrous lead, the Biden administration is expected to issue more rules about when parts can be sourced from China and other countries, hoping for a renaissance in EV battery and vehicle manufacturing in the United States. He already has proposed regulations from the Environmental Protection Agency and the National Highway Transportation Safety Administration that encourage automakers’ investment in electric vehicle production by requiring that two-thirds of all new passenger cars sold in the United States be all-electric within a decade. If the regulations are implemented and auto manufacturers do not meet the standard, they will need to pay fines, causing vehicle prices to increase.

Conclusion

While the battery-powered vehicle market is still expanding, the pace of growth has slowed considerably. As a result, legacy automakers that had been spending heavily to build their electric car businesses due to incentives from Biden’s climate law, are now taking a more cautious approach to investments. And, they are offering discounts on electric vehicles as dealer lots are overflowing. Ford and GM are losing tens of thousands of dollars for every electric vehicle produced and sold and they have just given big raises to the United Auto Workers union.  Biden’s climate law and proposed regulations pushing electric vehicles just might result in automakers needing another multi-billion dollar taxpayer bailout.

John Mozena, president of the Center for Economic Accountability, said this is a “great example” of central planning. “This is a great example of what happens when government central economic planning runs face-first into the real world of consumers having inconvenient opinions and making actual decisions. At the end of the day, it doesn’t matter how many EVs automakers build. Rather, it matters how many EVs consumers want to buy and drive.”

The Unregulated Podcast #156 Tonal Quality

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna recap the latest happenings on Capitol Hill and are joined by The Honorable Jason Isaac, of the Texas Public Policy Institute, for a wide ranging discussion on all things energy.

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Biden Slow Walking Critical LNG Infrastructure

Biden’s Department of Energy (DOE) has increased the time it takes to review a permit for exporting LNG from 7 weeks to a minimum of 11 months. The slowing of permit approval could mean that nearly-completed LNG projects are not able to supply European buyers in need of gas because they do not have  the permit. The drastic slowing of LNG export permits represents the most significant limit thus far on an industry planning to add 50 percent more to U.S. export capacity by 2026. The average time for issuing an export license for supplying the super-chilled gas to non-Free Trade Agreement (non-FTA) countries, climbed under the Biden administration to over 330 days from 155 days under the Obama administration and 48 days under the Trump administration. Non-FTA countries are the biggest buyers of U.S. LNG, but the Biden administration’s DOE has slowed decisions for economic, political and environmental reasons as Biden’s allies in the climate activist business have rallied to oppose new LNG facilities. Without these permits, projects that supply non-FTA countries cannot move forward. By law, exports to FTA nations must be approved quickly and affirmatively.

Commonwealth LNG has been waiting for almost a year after receiving its environmental approval for a permit to export LNG to non-FTA countries. Its Cameron, Louisiana, project has plans to start construction in the third quarter of next year with preliminary deals for the sale of 5 million metric tons per annum, mainly to non-FTA countries. New Fortress Energy filed 11 months ago for a non-FTA authorization for its Altamira FLNG facility, which is near to starting production. But the 1.4 million metric ton project will be unable to sell its gas to non-FTA countries including the Netherlands, UK, France, Spain and Germany. This is despite Biden’s promises to make LNG exports to Europe easier.

According to a DOE spokesperson, the agency considers more than environmental approvals in its non-FTA decisions. Many factors affect the amount of time DOE needs to review an application, including issues raised by “interveners” in any specific proceeding. DOE claims it approved non-FTA authorizations for projects representing almost 45 percent of the about 103 billion cubic feet per day production of domestic dry gas.

Background

In August 2014, DOE revised the process it uses to determine approval for a non-FTA permit application. Under the rule, DOE may act on a non-FTA request within 30 days after the Federal Energy Regulatory Commission (FERC) has issued a final environmental impact statement for the project. In practice, however, DOE has waited until after FERC has issued a final order, which usually adds a few months to the timeline.

According to an article in Real Clear Energy, Obama’s Energy Department made nine major non-FTA decisions for eight projects, taking an average of 155 days to reach a decision after the FERC order was issued. During the Trump administration, the number of major LNG decisions made by DOE increased to 13 while the average time to make a decision dropped to 48 days.  President Biden promised to “end fossil fuels,” while President Trump promoted American energy dominance.

The Real Clear Energy article also noted that there are two major U.S. LNG projects that have been approved by FERC since Biden was inaugurated in 2021. One of those projects was recently authorized unanimously (Port Arthur Phase II), but the other (Commonwealth LNG) was given approval by FERC on November 18, 2022. It has been awaiting a DOE non-FTA decision for over 325 days, which is more than twice as long as the average during the Obama years and almost seven times longer than in the Trump administration.

The article also noted that while DOE has yet to act on a major U.S. LNG export application request, it approved five smaller requests for U.S. LNG export project capacity increases, primarily from operating facilities. Even the minor decisions have taken a very long time. The average time from FERC to DOE action was 330 days, and the longest application was pending for 678 days.  President Biden’s rhetoric about helping European allies seems to conflict with his inactions and delays.

Source: Real Clear Energy

Conclusion

The House of Representatives twice passed legislation to simplify the U.S. LNG regulatory process by granting full authority to FERC to make U.S. LNG export decisions. U.S. LNG exports are making substantial contributions to U.S. trade balances and domestic employment and bolstering the energy security of our allies. The disruption of pipeline gas shipments to Europe following the Russian invasion of Ukraine hurt European economic growth and security. Without U.S. LNG, Europe’s energy situation after the Russian invasion of Ukraine would be much more problematic.  Ditte Juul Jørgensen, the European Commission’s Director-General for Energy, noted that the EU will need U.S. gas for decades. DOE’s slow permit approvals could result in delays for new U.S. LNG supplies and cost increases.

The Unregulated Podcast #155: We Take it Very Seriously

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss carbon tax news in the states and north of the border, the latest lunacy from America’s left wing, and give some insight into the evolving situation involving Iran.

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10 Questions for Senator Cassidy and Senator Graham

Today, Senators Cassidy and Graham introduced a carbon tax on imports from high-greenhouse gas emitting countries. We have some questions for the Senators:

  1. Why do you support a carbon tax? Or do you only support a carbon tax on China, but not on U.S. producers?
  2. When did following European-style energy policy help the United States?
  3. Europe’s manufacturing sector is contracting. Why do you want to follow Europe’s energy policy which has led to higher energy prices in Europe and a loss of manufacturing?
  4. Should the Europeans impose a higher carbon tax on LNG imported from the United States or the Middle East?
  5. The United States has had a very successful climate policy before the IIJA and IRA—without carbon taxes and without the massive subsidies in the IIJA and IRA. From 2000 to 2021, per capita CO2 emissions fell over 30 percent in the U.S. versus 25 percent in Europe. Absolute carbon emissions over the same time frame fell by 275 million metric tons in the U.S. compared to 221 million metric tons in Europe. (For more information, see the Institute for Energy Research’s The Challenges and Costs of Net-Zero and the Future of Energy.)  If our previous climate policy worked so well, why are you proposing a new climate policy?  
  6. At what level do carbon dioxide emissions become “pollution”? For example, is firing steel furnaces with natural gas okay, but using coal is not? 
  7. The United States has lost heavy manufacturing not because of U.S. regulations on carbon dioxide emissions, but other pollution controls such as regulations on criteria pollutants and air toxics.  So why are you focused on carbon dioxide emissions instead of the pollution that caused the United States to lose heavy industry?   
  8. If we wanted to focus on natural security and the heavy industry needed for national security, should the United States use more coal? The United States has the largest coal reserves in the world. Would this bill help produce the massive amounts of energy required to rebuild heavy industry in the United States?
  9.  What is the right amount for the carbon tax? Which calculation of the social cost of carbon is the most correct—the Obama, Trump, or Biden administration’s figure?
  10. Politico states, “‘There is a possibility here for a big bargain,’ Cassidy said, arguing a pollution fee would fit with bipartisan efforts in Congress to ease permitting rules for building energy products domestically.” What does a carbon tax on imports have anything to do with permitting rules?   

New House Speaker Goes to Work Slashing Biden’s Green Fat Budget

The first major legislation House Republicans passed under Speaker Mike Johnson’s leadership would cut billions of dollars in green subsidies for energy efficiency upgrades included in President Biden’s climate law, the Inflation Reduction Act. The $58 billion measure, which funds the Energy Department and other agencies, rescinds more than $5.5 billion from the Inflation Reduction Act, including a $4.5 billion program for homeowners to switch to more energy efficient appliances and a $1 billion grant program to help states develop more stringent building energy codes, presumably so the states can do the Administration’s dirty work telling people what kind of appliances they can buy. The bill, approved on a 210-199 vote, also slashes the Energy Department’s energy efficiency and renewable energy office funding by 42 percent below last year’s levels and revokes $15 billion in loan authority from the department’s loan guarantee program. The House measure is not expected to pass the Senate or receive Biden’s signature without changes. It represents the House Republicans’ starting point as they negotiate spending ahead of a mid-November government shutdown deadline, and it is a good start. 

Jonson’s Aggressive Schedule

Johnson has pledged the House will vote on the remaining spending bills in the coming weeks. In an October 23 memorandum to colleagues, Johnson indicated that the House would work through the eight remaining appropriations bills between now and November 17, when the government would shut down absent congressional action. The Energy-Water bill would be followed by the bill to fund the Department of the Interior and EPA. Both the Energy-Water and Interior-EPA bills have deep cuts from Biden’s wish list of “green” spending. Such spending in various bills has exploded under Biden, with Vice President Kamala Harris admitting that they plan to spend $1 trillion on their climate plans. In addition, the Speaker pledged that in December, the House will pass a reauthorization of the farm bill in time to avoid an expiration of the three-month extension Congress approved in September. Johnson also planned to launch negotiations with the Senate on the National Defense Authorization Act by next month for passage by December. That bill usually carries significant energy and environment provisions. Johnson also wants to begin negotiations on the FAA reauthorization “as soon as the Senate passes it,” presumably sometime in the next four weeks.

For next year, the Speaker expects that between May and July, the House should complete consideration of all fiscal year 2025 spending bills as well as funding for the Water Resources Development Act and the fiscal year 2025 National Defense Authorization Act. Johnson believes the chamber should not break for its annual summer district work period unless all 12 of next year’s appropriations bills have passed the House. If they do, he plans to wrap up negotiations with the White House and Senate before the next fiscal year ends on September 30. 

Johnson committed to pursuing single-issue spending bills rather than opting for a larger spending package like a continuing resolution or an omnibus. In the past, such omnibus bills have been used to throw all spending in together, so members of Congress must vote for or against everything.  Few Congresspeople who might want to reduce funding for crony “green capitalism” want to be accused of voting against Veterans benefits when they are lumped together. Johnson, however, cautioned in his October 23 memorandum that if another stopgap measure is needed to extend government funding beyond the November 17 deadline, he would propose a measure that expires on January 15 or April 15 (based on what can obtain Conference consensus), to ensure the Senate cannot jam the House with a Christmas omnibus.

Johnson will also be confronted with a $50 billion supplemental spending request for domestic programs, including disaster relief and wildfire prevention that really should be part of the appropriation bills, and a request of more than $100 billion for Ukraine, Israel and other things Biden wants. Johnson has proposed cutting $14.3 billion from the $80 billion of new funding provided for the IRS to pay for the Israel aid.  

Conclusion

Johnson sees each of these actions as a “return to legislating” and an opportunity to get back to “effectively messaging on our top issues and priorities.” He believes his objectives can be accomplished in a manner that delivers on principled commitments to rein in wasteful spending, and put the country back on a path to fiscal responsibility. The House will no doubt have fights with the Biden White House that considers climate a more existential threat than wars in the Middle East and Russia. House Republicans projected unity and confidence that they would be able to fulfill Johnson’s objectives. However, time will tell if he can accomplish the huge task.

The Unregulated Podcast 154: Over the Falls in a Barrel