The agreement to raise the US government's debt limit makes it more likely than ever that federal energy spending will see sharp cuts, a former presidential energy advisor said on Monday.
Although several energy and natural resources-focused interest groups, including the American Petroleum Institute, declined comment on the deal, reached Sunday night and still to be voted on by the full Senate and House of Representatives, former Clinton Administration energy advisor Elgie Holstein said it means that a range of energy and environmental programs will see cuts to near the same levels House Republicans proposed for the fiscal 2012 budget.
"I think the house FY12 numbers give us a preview of that, and these new numbers are probably going to be even tougher," said Holstein, now a senior director at the Environmental Defense Fund. "While the big headline grabbing fight over the debt ceiling deadline may be settling down, the real program-by-program fights are just beginning."
The agreement does not include a compromise over the ethanol blending tax credit, which would have immediately ended the 45-cent/gal credit and put a portion of the money saved toward extending cellulosic ethanol subsidies.
The bill also does not touch the roughly $4 billion in tax benefits for oil and natural gas companies, but White House spokesman Jay Carney Monday said those will be on the table for a congressional committee that will decide on future deficit-reduction measures.
"If the joint committee decides, for example, that part of a balanced deal should be to eliminate tax subsidies for oil and gas companies -- as the president has called for, they can do that and they would raise revenues through doing that," Carney said at a White House briefing.
HOUSE BILLS
The agreement, which was expected to be voted on in the House Monday evening, would raise the debt ceiling in two phases, with accompanying sets of steep spending cuts. The bill immediately puts in place federal spending limits for the next 10 years, beginning with the fiscal 2012 budget. A congressional committee would be tasked with drafting another $1.5 trillion in cuts.
The first set of spending caps allow slightly more federal spending than budget proposed by House Republicans. For fiscal 2012, the deal would allow $1.043 trillion in federal discretionary spending (spending outside of entitlement programs, such as Medicare and Social Security). That is about $24 million more than the House Republican budget of $1.019 trillion for next year.
Those spending caps will almost certainly make it much harder for the Senate to boost spending levels for energy and environmental programs, compared to the House bills for fiscal 2012. Those bills include deep cuts that Democrats and environmental groups decried at the time.
The energy and water development appropriations bill (H.R. 2354), which the chamber approved July 15, would provide the Department of Energy with $24.7 billion in fiscal 2012, $850 million less than it received in 2011. Overall, the bill would provide about $30.6 billion for DOE and federal water projects.
Under the Interior appropriations bill (H.R. 2584), the Environmental Protection Agency, Interior Department and related agencies would receive a total of $27.5 billion under the bill?$3.8 billion below Obama's requested levels for those agencies. EPA would get $7.1 billion, $1.5 billion less than the current-year level, and Interior would be funded at $9.9 billion, $720 million below fiscal 2011.
The House Republican leadership has not yet decided how the debt limit agreement will impact the fiscal 2012 spending process, said Republican Appropriations Committee spokeswoman Jennifer Hing.
