With help from Oriana Pawlyk, Eleanor Mueller and Doug Palmer
— The House passed a $700 billion tax, health care and climate bill and major changes to electric vehicle tax credits are coming as soon as this week.
— Union leaders say freight rail issues are causing continuous backlogs at West Coast container ports.
— NHTSA administrator Steve Cliff is stepping down to take a position as California’s air and climate regulator.
IT’S MONDAY: You’re reading Morning Transportation, your Washington policy guide to everything that moves. As always, send tips, pitches, feedback and song lyrics to [email protected]. You can find all of us on Twitter:@alextdaugherty,@TSnyderDC and@Oriana0214.
(ALMOST) SIGNED, SEALED, DELIVERED: Democrats notched their biggest victory since taking full control of Washington 19 months ago, as the House on Friday evening passed a health care, climate and tax bill, delivering on a key campaign promise of Joe Biden’s presidency and capping more than a year of talks on the Hill, Sarah Ferris and Jordain Carney report. The bill now heads to Biden’s desk for his signature, and when it becomes law a host of policy changes, including a revamped electric vehicle tax credit, will go into effect immediately. Biden said he plans to officially sign the bill into law this week, though a larger ceremony will happen in September.
ABOUT THOSE CREDITS: A slew of electric cars currently on the market will be ineligible for federal tax credits starting next week. The bill requires cars to be assembled in North America to be eligible for tax credits, though buyers who have a binding contract in place before the bill becomes law will be eligible for existing credits, which are capped at 200,000 per manufacturer but do not require the vehicle to be assembled in America.
BUY A FERRARI TODAY: Starting Jan. 1, the tax credit will only apply to vehicles that meet battery and critical mineral sourcing requirements. Currently, no electric vehicle on sale in the U.S. meets those requirements, but proponents like Sen. Joe Manchin (D-W.Va.) argue the requirements are necessary to spur a domestic battery supply chain into existence. Also, wealthy buyers and expensive cars will now be ineligible for up to $7,500 in tax credits. Currently, millionaires wishing to purchase ultra-expensive electric vehicles like the Ferrari SF90 Stradale are eligible for a tax credit, but that will change once the reconciliation bill becomes law.
PRICES DOWN: The average price of a gallon of gas is now below $4, according to AAA, prompting a fresh round of credit-taking and celebration from Biden and Democrats. It’s now the first time since early March that gas is below $4 per gallon, and more than a dollar cheaper than the all time high of $5.01 per gallon set in early June.
“That’s over one dollar down from peak prices,” Biden tweeted. “And I’m not done calling on oil producers to increase supply so prices can drop even more.”
PORTS STILL BACKLOGGED: Various union leaders said West Coast container ports are still clogged, despite lower volumes of ships waiting to berth, because of a lack of truck chassis and rail capacity.
“Right now these carriers are moving cargo to different docks because of congestion problems,” International Longshore and Warehouse Union Coast Committeeman Frank Ponce de Leon said during a call with union leaders to criticize the Class 1 freight railroads as they negotiate a labor agreement through a Presidential Emergency Board. “If they had their way they’d move it to LA/Long Beach.”
UH, WE WERE ALREADY DOING THAT: Ponce de Leon threw a light jab at the White House, which previously announced that certain terminals would now be open 24/7 to deal with shortages, by noting that the longshoreman have already worked 24/7 schedules to fill trains well before the administration’s announcement. “Our members start throwing up their hands when the administration says ‘We’re going 24/7,’” Ponce de Leon said.
SLOWING SHIPS: He added that many ships are being told to slow down en route to LA/Long Beach due to ongoing congestion at the port, to prevent the pileup of ships in the harbor (and the associated environmental concerns) that was emblematic of supply chain challenges late last year. “They’ve moved those vessels out 150 miles … so we’re still getting a steady stream,” Ponce de Leon said.
DON’T ASK, DON’T…SERIOUSLY, DON’T ASK: ILWU, which represents 22,000 West Coast port workers, is also in the middle of closely watched contract negotiations and is keeping its cards close to its chest on how those talks are going.
“We don’t negotiate in a fishbowl,” Ponce De Leon said in response to a question from Eleanor on a Friday press call. “I’m not privileged to talk about anything about how negotiations are.”
The contract currently in effect expired more than a month ago on July 1. The last time both parties were at the bargaining table in 2014, talks dragged on for nine months — creating a multi-ship backup and costing retailers millions.
CLIFF HANGER: Cliff is stepping down to take a position as California’s air and climate regulator, Debra Kahn reports, less than three months after receiving Senate confirmation. He’ll return to the California Air Resources Board as executive officer, responsible for overseeing the agency’s sprawling portfolio of regulations on conventional and greenhouse gas pollution.
“I see my appointment to CARB as placing me in a unique position to work with California, other states, and our federal partners to build on the President’s vision to support the transition to zero emission cars, trucks, and equipment,” Cliff said in a statement.
NHTSA Chief Counsel Ann Carlson will assume Cliff’s duties in an acting capacity, DOT Secretary Pete Buttigieg said in a statement.
TELECOM WIN: The D.C. Circuit Court of Appeals on Friday sided with a prior FCC decision allowing spectrum within the 5.9 GHz frequency band to be reapportioned for uses other than auto safety technology, Oriana reports. The lawsuit, brought last year by the Intelligent Transportation Society of America and the American Association of State Highway and Transportation Officials, aimed to challenge the FCC’s 2020 decision to carve up the spectrum for unlicensed wireless device users that had previously been reserved for safety technologies that allow vehicles to communicate with each other.
INTERAGENCY CONFLICT: Known as the Safety Band, the FCC — despite resistance and concern from DOT and others — allowed for supplementary devices to use the lower 45 MHz while keeping the remaining 30 MHz for transportation safety uses, most notably an auto-safety technology called Cellular Vehicle-to-Everything. The band has been reserved for vehicle safety purposes since 1999, but has been underutilized.
The Internet & Television Association, now known as NCTA, called the decision a victory for American consumers. “The Commission’s unanimous, bipartisan order modernizes a band that was primarily unused for over 20 years, and today’s court decision enables that important 5.9 GHz spectrum to provide consumers with even more reliable high-speed Wi-Fi and access to next-generation automotive safety applications,” the trade group said.
NEW ACCOUNT JUST DROPPED: A copy-cat account of the “Biden Wins” page highlighting White House accomplishments dubbed “Buttigieg Wins” has started tweeting out DOT updates and framing them as “wins” for Buttigieg, who of course hasn’t ruled out a future bid for president.
“The Inflation Reduction Act includes new tax credits for electric vehicles and will increase domestic battery production. That’s a Buttigieg win!” is standard fare from the account, which has about 18,000 followers since it started tweeting earlier this month.
USTR SHRUGS OFF EU CRITICISM OF EV TAX CREDIT: U.S. Trade Representative Katherine Tai is definitely not working up a sweat over the European Union’s charge that an electric vehicle tax credit appears to violate World Trade Organization rules.
The House approved the revamped credits despite the EU’s plea that lawmaker makers remove “discriminatory” elements from the bill. South Korea has also complained about how the provision is structured.
“This bill provides strong incentives to reduce our dependence on China for the critical materials that will power this key industry, and we look forward to working with allies and partners to advance our climate goals, strengthen and diversify our supply chains, and address our shared concerns with China’s non-market policies and practices,” USTR spokesperson Adam Hodge said in response to the criticism.
— “Embarrassing, uncomfortable and risky: What flying is like for passengers who use wheelchairs.” New York Times.
— “A California startup is selling electric vehicle ‘subscriptions.’” Bloomberg.
— “Audi, Porsche, Kia say U.S. EV buyers will lose tax credit under legislation.” Reuters.
— “HOV privileges are ending for drivers of electric vehicles in Maryland.” Washington Post.