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Stingy 112th Will Test Corporate Influences

Amid Republican opposition, Senate Majority Leader Harry Reid (D-Nev.) on Tuesday abandoned his $3.8 billion subsidy that would entice transportation firms to swap out their dirty diesel trucks for cleaner-burning natural gas vehicles.

The decision by Democratic leadership to call off a vote today on Reid’s bill is likely a sign of things to come in the 112th Congress. On the campaign trail, many Republican Members-elect made broad promises to slash federal spending. And now those pre-election pledges are bumping up against the outspoken wants of powerful industries.

Lobbyists and lawmakers are already furiously working on rewrites of federal transportation and agriculture policy, but Republicans warn that Reid’s seemingly doomed natural gas bill is a precursor of next year.

“There have been some positive discussions with Republicans about moving forward on the natural gas and electric vehicles legislation,” Reid spokeswoman Regan Lachapelle wrote in an e-mail Tuesday afternoon. “Senator Reid has talked to Senator Hatch and others and thinks that vitiating the cloture vote at this point would increase the chances that we’ll be able to get a bipartisan agreement to pass this important legislation before the end of the year.”

Despite the endorsement and expensive lobbying campaign of one-time prominent GOP donor T. Boone Pickens, nearly all K Street observers ahead of today’s vote had expected Reid’s Promoting Natural Gas and Electric Vehicles Act to fall well short of the votes necessary to cut off debate. Republicans balked early on at both the legislation’s steep price tag and at how Democrats planned to pay for it: tapping into the Oil Spill Liability Trust Fund.

“We just had this massive oil spill, and you want to go raid the trust fund?” a Senate Republican aide said Tuesday morning. “That doesn’t make any sense and is tantamount to a tax increase at a time when the American people are in open revolt.”

The aide added that Republicans are going to insist that any tax credits or new spending be paid for so they don’t add to the budget deficit.

“When all of these outstanding things are going to be consumed by unemployment, the doc fix, et cetera, everything else is going to fall by the wayside,” the aide said. “There’s a limited amount of money left and the Democrats in the Senate will try and use what’s left to push their agenda. The business community isn’t high on their list.”

Expectations of a stingy 2011 Congress are already making their way down K Street. In an interview Monday, tax lobbyist Ken Kies said he expects the current crop of lawmakers to sign off on tax extensions for business and perhaps George W. Bush-era cuts for individuals and a levy on the estates of wealthy families — but little else.

“As much as Republicans would like to say Nov. 2 solved all problems, unfortunately it did not solve our fiscal nightmare, which is as horrific as something this country has ever faced,” Kies said. “Small items in the new world are going to be very difficult to do.”

The fiscal discipline to come will likely cause a lot of pain and suffering on both sides of the aisle, Kies and other tax policy veterans said.

Although he declined to be interviewed for this article, Pickens has said previously that he plans to continue lobbying for the natural gas bill next year, and the American Gas Association, which represents suppliers, gave no indications this week that it plans to ease up on its demands.

“AGA fully supports the increased development of natural gas vehicles and applauds Sen. Harry Reid’s work on this issue,” spokeswoman Lydia Meigs wrote in an e-mail. “Using natural gas as a transportation fuel increases energy security, creates jobs, provides cleaner air and reduces greenhouse gas emissions.”

Dan Jameson, a lobbyist for waste company Republic Services, said in a statement Monday that his firm added nearly 500 natural gas trucks to its fleet this year alone. Still, his colleague Peg Mulloy said it’s uncertain whether the company can continue to add vehicles at the same rate without the federal subsidy.

“We know how politics works and expect that things won’t go totally smoothly,” she said.

Soybean growers are also already crowing about the tough love that Republicans are expected to show to special interests next year. In an interview, American Soybean Association spokesman Bob Callanan said his organization continues to press lawmakers on a biodiesel tax credit that his members want. He suggested the group’s farmers give little credence to ideology or campaign promises.

“It’s up to Congress as to how they want to get things funded,” Callanan said. “They make the rules.”

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