Democrats focus on carbon border tax to help fund $3.5 trillion spending plan


Democratic lawmakers are making plans to levy taxes on imports from carbon-polluting countries to help pay for a $3.5 trillion package for new government spending on everything from universal childcare to expanding public health benefits.

Although the details of the tariffs are few, the news of the Democratic Party’s proposal was released on the same day as the EU. Publish its plan Taxes are imposed on imported products based on their carbon footprint.

European diplomats once hoped that Washington and Brussels would cooperate to solve the climate change problem through trade mechanisms such as carbon border taxes. But any effort by the United States to tax the carbon entering the country will mark a shift in Joe Biden’s government policy.

Biden’s climate envoy, John Kerry, warned this year that the adjustment of the carbon border tax should be a “last resort” and he was “worried” about Brussels’ plans for this mechanism.

Senate Democrats agreed to advance a $3.5 trillion spending plan late Tuesday, paving the way for Democrats to advance the president’s most ambitious agenda item without Republican support. Biden’s wish list includes investment in childcare and education, expansion of the government’s healthcare benefits for the elderly, and measures to address climate change.

On Wednesday, Biden had lunch with Senate Democrats on Capitol Hill. At the meeting, Senate Majority Leader Chuck Schumer briefed all 50 Democrats in the House of Lords on the agreements reached-and how to pay for them in full. Cost so as not to increase the budget deficit.

A senior Democratic aide said that income will be increased through tax reforms—including changes to corporate tax rates and taxes on high-income individuals—but it will not increase households, small businesses, or family farms with annual incomes of less than $400,000. Tax.

The legislation has not yet been drafted, but a senior aide of the Democratic Party said that the budget resolution will also propose “pollution import fees” and other major investments to help achieve Biden’s goal of reducing carbon emissions by 50% by 2030.

It is unclear whether the Democratic Party is seeking to follow the EU’s plan, which includes expanding a plan that allows companies to pay for pollution costs and implementing a carbon border adjustment mechanism that forces importers to pay extra for carbon imported from countries with weaker climate policies. cost. .

The $3.5 trillion in spending proposed by the Democrats is right A $1 trillion bipartisan infrastructure deal Democratic and Republican lawmakers reached an agreement last month.

Biden called on Congress to adopt a “dual track” strategy, to pass infrastructure agreements with the support of the two parties, and to pass larger budget bills using the Senate process known as settlement. This allows the Democrats to bypass the obstructive rules of procedure-which requires the support of at least 60 lawmakers in the 100-member House-and act alone. The Senate split between the Democrats and Republicans at a 50-50 ratio, and Vice President Kamala Harris was able to vote for the tiebreaker.

The budget agreement still needs to be signed by all 50 Democratic senators. Joe Manchin, a conservative Democrat from West Virginia, has been a thorn in the eyes of the Biden administration. He told reporters on Wednesday that he would like to see “more details.”

Manchin did not immediately comment on the taxation of polluting companies, but reiterated his opposition to eliminating the United States’ dependence on fossil fuels. The economy of West Virginia relies heavily on coal mining.

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