Activists Tout Climate Savings to Fight Debt Fears on Biden Plan
(Bloomberg) -- Environmental groups and Democratic strategists are trying to overcome opposition to President Joe Biden’s $2 trillion economic legislation by arguing its climate provisions would reduce flooding, extreme heat and the intensity of storms, outweighing concerns about the measure’s impact on inflation.
“The fiscal case for all these investments is incredibly compelling, and we’re hoping that helps carry the day and that we get to 50 votes in the Senate,” said Collin O’Mara, head of the National Wildlife Federation.
The offensive comes as Democrats’ efforts to pass Biden’s tax-and-spending plan are running into the debt and deficit concerns of Senator Joe Manchin, whose support is critical for enactment. Manchin, a West Virginia Democrat, said he wants the final package to be “within the limits of what we can afford,” amid climbing U.S. debt as well as an “alarming” increase in inflation.
But a Congressional Budget Office analysis requested by Republican Senator Lindsey Graham shows the measure would add $3 trillion in deficits over a decade if its new and expanded programs are made permanent without additional revenue to offset them.
The White House and congressional Democratic leaders disputed the premise of the CBO report, arguing that Biden has long said he would only support expanding programs if doing so was fully paid for.
University of Chicago professor of economics Michael Greenstone argues the bill’s planned spending could deliver more cost-effective reductions in carbon dioxide emissions than other options.
Expanded clean energy tax credits in the legislation would reduce between 5 billion and 8 billion tons of carbon dioxide from 2021 to 2050 at a price tag of about $17 to $33 per ton, with each dollar spent yielding between $6 and $10 back in benefits, Greenstone said at a roundtable Tuesday.
While the costs of inaction may not show up in a CBO analysis of the bill’s fiscal impact, they are devastating, O’Mara said. “When you’re going to have another year of $100 billion worth of events, that doesn’t score under CBO, but those are all supplemental dollars that are going to come out of the Treasury.”
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