Democrats observe carbon border tax to help fund $ 3.5 million spending package

Democratic lawmakers are working out plans for a tax on imports from carbon-polluting countries to help pay a $ 3.5 million package in new government spending, from universal child care to the expansion of public health benefits.

Although tariff details are scarce, news of Democrat proposals arrived on the same day as the EU published her plans impose a tax on imports based on their carbon footprint.

European diplomats had wanted Washington to work with Brussels to tackle climate change through trade mechanisms such as a carbon border tax. But any U.S. effort to impose carbon taxes that would enter the country would mark a policy change for the Joe Biden administration.

John Kerry, sent to the Biden climate, warned this year that the adjustment of taxes at the carbon border should be a “last resort” and that he was “concerned” by Brussels ’plans for this mechanism.

Senate Democrats agreed Tuesday afternoon to move forward with the $ 3.5 million spending package, paving the way for Democrats to push many of the most ambitious issues on the president’s agenda without Republican support. Biden’s wish list includes investments in child care and education, an expansion of government health benefits for the elderly, and measures to combat climate change.

On Wednesday, Biden joined Senate Democrats for lunch on Capitol Hill, where Chuck Schumer, the leader of the Senate majority, briefed 50 Democratic lawmakers in the upper house on what had been agreed and how it would be paid in full. , so it is not added to the budget deficit.

A senior Democratic aide said incomes would increase through tax reform, including changes in the corporate tax rate and taxes for high-income people, but would not increase taxes for families who earn less than $ 400,000 a year, small businesses or family farms.

Legislation has not yet been drafted, but a senior Democratic aide said the budget resolution would also propose “pollutant import rates,” along with other significant investments to help achieve Biden’s goal of reducing 50%. carbon emissions in 2030.

It is unclear whether Democrats want to emulate EU plans, which include expanding a scheme that makes companies pay for the cost of pollution and imposing a carbon border adjustment mechanism that forces importers to pay extra for carbon imported from countries with weaker climate policies. .

Democrats proposed spending $ 3.5 million adds to $ 1 billion bipartisan infrastructure agreement agreed last month between Democratic and Republican lawmakers.

Biden has called on Congress to pursue a “two-way” strategy, approving the infrastructure agreement with the support of both parties and the larger budget bill through a Senate procedure called reconciliation. This allows Democrats to evade the rules of filibustering (which require the support of at least 60 lawmakers in the 100-member chamber) and follow it all on their own. The Senate is split between 50 and 50 between Democrats and Republicans, with Kamala Harris, the vice president, able to vote a tie.

The 50 Democratic senators will have to sign the budget agreement. Joe Manchin, the West Virginia Conservative Democrat who has been a thorn in the side of the Biden administration, told reporters Wednesday he wanted to see “more details.”

Manchin did not immediately comment on any taxes on polluting companies, but reiterated his opposition to eliminating U.S. dependence on fossil fuels. West Virginia’s economy is heavily dependent on coal mining.