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Congress turns to reconciliation


With help from Oriana Pawlyk

Editor’s Note: Weekly Transportation is a weekly version of POLITICO Pro’s daily Transportation policy newsletter, Morning Transportation. POLITICO Pro is a policy intelligence platform that combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.

GOING BIG? It’s crunch time for Democrats’ budget reconciliation plans. After a full slate of markups last week, the most important one to MT readers goes down on Tuesday, as the House Transportation and Infrastructure Committee meets Tuesday morning to advance its piece of the $3.5 trillion bill.

T&I’s reconciliation section is chock full of progressive transportation priorities. It’s got $10 billion for transit, tucked into a new joint HUD/FTA program on housing access. It also has $10 billion specifically for high-speed rail, money that many Democrats have been calling for. Additionally, there’s $4 billion to boost the program created by the Senate’s infrastructure bill that aims to reconnect communities damaged by historic highway construction. And another new $4 billion program would send money to states and other entities for surface transportation projects that reduce greenhouse gas emissions. Pros can read our full breakdown of the legislation here.

But it’s also got some line items that could be challenged as “double dipping” because they add on to programs that were funded in the Senate infrastructure bill, and therefore might be considered a violation of President Joe Biden’s promise to Senate negotiators not to revisit policy already negotiated in that effort.

Looking across the Capitol also shows huge warning signs for Democrats. Sen. Joe Manchin (D-W.Va.) is maintaining his stance against the price tag of the reconciliation bill. Manchin had called for a pause in consideration of the bill, expressing worries about inflation and the national debt, but Senate Majority Leader Chuck Schumer is forging on. “That’s fine, he can, he will not have my vote on 3.5 and Chuck knows that,” Manchin said Sunday on CNN. Sen. Mark Warner (D-VA) has concerns in the other direction, telling Axios he won’t vote for the package unless more funding is added to aid first-time homebuyers.

What to watch this week: Wednesday is the deadline set by Schumer to have all the pieces of reconciliation ready to go. But it’s hard to imagine Democrats going full speed ahead after that, considering the barriers in place. We’ll be watching to see how Democratic leaders try to get around the Manchin problem, which exacerbates their razor-thin margin in the Senate. One possible solution that is already floating its way around Washington: lowering the overall price tag.

IT’S MONDAY: You’re reading Weekly Transportation, your Washington policy guide to everything that moves. Get in touch with tips, pitches and feedback at [email protected] or @samjmintz.

“I’m a rollin’ stone, all alone and lost / For a life of sin, I have paid the cost / When I pass by, all the people say / Just another guy on the lost highway.”

THE TAX CREDITS OF IT ALL: Democrats on the House Ways and Means Committee also put forward their reconciliation plans, including multiple provisions subsidizing electric vehicles. Among those is a (means-tested) $7,500 credit for buying electric vehicles that could rise to $12,500 if the final assembly of the vehicle is at a U.S. facility that operates under a collective bargaining agreement and if it uses batteries manufactured within the U.S. There are also separate tax breaks for used electric vehicles, commercial electric vehicles and a 15 percent credit for purchasing electric bikes. Read more from Pro’s Kelsey Tamborrino.

Foreign automaker opposition to labor provision: Toyota and Honda said they will fight the EV proposal because it “discriminates against American autoworkers based on their choice not to unionize,” as Toyota’s statement reads. Their American plants aren’t unionized, so they won’t get the extra credit, and neither will Tesla.

Ways and Means is also planning to include a tax credit to boost sustainable aviation fuel, Kelsey reports. The draft provision is similar to a bill, H.R. 3440 (117), dubbed the Sustainable Skies Act, which would “create a SAF tax credit, starting at $1.50 per gallon and capped at $2 per gallon, for blenders that supply the fuel with an at least 50 percent lifecycle estimate reduction in greenhouse gas emissions in comparison with petroleum-based jet fuel.“ It’s not the only love for sustainable aviation in reconciliation: T&I’s section would give DOT $1 billion to support projects investing in sustainable aviation fuel technology.

FREIGHT MERGER BATTLE TAKES ANOTHER TURN: The latest twist in a bidding war between two freight rail giants over a smaller competitor came over the weekend, as Kansas City Southern said it had accepted a new offer from Canadian Pacific, after CP’s competitor Canadian National hit a key regulatory stumbling block in recent weeks. The new bid from CP is about $31 billion, and it comes after the Surface Transportation Board had rejected CN’s request to create a voting trust with KCS at the end of August.

FAA GIVES $100M FOR NEXT-GEN TECH: In its ongoing quest to combat climate change, the Biden administration says it’s investing in sustainable aircraft technologies to reduce emissions, fuel consumption and noise. The FAA on Friday announced $100 million in grants to six companies — General Electric, Honeywell, Pratt & Whitney, Boeing, Rohr Inc., and a joint venture between Delta TechOps, GKN Aerospace, MDS Coating, and America’s Phenix working as single entity — for various projects such as acoustic improvement, exhaust upgrades and hybrid electric propulsion, aiming to improve fuel efficiency, NOx emissions, and/or noise reduction. The agency is also pursuing programs with Rolls-Royce Corp. and Safran Nacelles. The awards are part of the Continuous Lower Energy, Emissions and Noise, or CLEEN, program, which requires receiving companies “to match or exceed the FAA’s investment.”

— “Protest over road widening through Black community stirs memories of a similar fight in 1967.” The Washington Post.

— “Chip shortage drives tech companies and car makers closer.” The Wall Street Journal.

— “Post-9/11 airline safety overhaul still not enough, pilots say.” CNN.

— “Skilled workers are scarce, posing a challenge for Biden’s infrastructure plan.” The New York Times.

— “Transportation Department cracks down on airlines withholding refunds for canceled flights.” NBC News.

— “Dems hurtle toward a new fiscal cliff.” POLITICO.





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