Congressional Update: Federal Budget, Synthetic Nicotine, Gasoline Price Mitigation, Build Back-Lite
On Tuesday, President Biden signed the Fiscal Year 2022 government funding package into law. The law fully funds government agencies and will provide the funding for implementation of key Biden Administration priorities, including provisions from the Bipartisan Infrastructure Law.
The law also includes language that will allow the FDA to regulate synthetic nicotine. Manufacturers must file a Pre-Market Tobacco Application (PMTA) by May 14, 2022, to keep the product on the market while the FDA reviews the products.
The FDA will issue a marketing authorization order in response to a submitted PMTA by July 13, 2022.
Russian Oil Ban
Congress voted to revoke normal trade relations with Russia, though there is some disagreement in the Senate about when an importation ban of Russian oil should kick in. President Biden has already banned the importation of Russian oil, but Congress wants to codify this policy shift into law.
Gasoline Price Mitigation
To mitigate the ensuing recent gas price hikes, Congressional Democrats continue considering different policy responses, with Senator Chris Coons (D-DE) saying “it’s important we get caught trying.”
Democrats have floated a variety of ideas, including a gas tax holiday, increased antitrust enforcement around oil prices, and a tax on large oil and gas companies’ profits.
None of these ideas have gained traction, however, with many Democrats admitting they could backfire.
Other advocacy groups have called on President Biden to invoke the Defense Production Act to force more domestic oil production.
Build Back Better-Lite
Also this week, Senator Manchin (D-WV) provided additional details over what he could support for a reconciliation bill.
This refers to the Build Back Better Act (BBB) – the House-passed $1.6 trillion domestic policy package focused on tax reform, climate change, and healthcare – that Senator Manchin effectively killed.
Senator Manchin said he would support some form of an “all inclusive” climate policy, which would essentially provide tax credits for all forms of clean energy – including hydrogen – and would be paid for by corporate and potentially individual tax rate increases.
Senator Manchin emphasized, however, that there are not yet any formal discussions and that the bill could not unfairly target the oil, gas, and coal sectors.
Manchin also said a $4,500 tax credit for EVs is a “nonstarter.”
Reconciliation bills can pass with 50 votes, rather than 60, so Senate Republicans cannot block this legislation if it picks up.
If a slimmed down BBB does become reality, some Senate Democrats will seek to include legislation that would require the US electric sector to better plan for power grid upgrades to accommodate the renewable energy rollout.
Senators Ed Markey (D-MA), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), and Tina Smith (D-MN) introduced the CHARGE Act of 2022 this week, which would require FERC to establish a minimum reliability standard.