Where a Government Shutdown Could Really Hurt Biden’s Climate Agenda

Absent a last-minute deal between a bipartisan group of senators and the Republican-led House, the federal government will shut down on Sunday. With much of the Biden administration’s climate agenda a work in progress, a shutdown could grind time-sensitive rulemakings and grantmaking activities to a halt, not to mention regular environmental protection.

But it’s not so simple. Thanks to the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, much of the government’s climate work has been funded outside of the annual appropriations process and could prove fairly resilient to a shutdown. However, few agencies have released their contingency plans, and so it’s hard to parse exactly which activities will continue. The White House has been eager to use the prospect of government responsibilities going unfulfilled as leverage against Republican leaders in the House.

When we reached out to federal agencies and the White House for more information, they either declined to comment or referred us to the Office of Management and Budget. That office did not answer questions but a spokesperson said in an email that “shutdowns are disruptive and distracting, making it difficult for agencies to deliver for the American people at the same pace — even for programs with available funding — given how much time and attention must go to managing the impacts of a shutdown.”

The clock is ticking on several key upcoming climate and clean energy rules, due to the Congressional Review Act. The law allows Congress to overturn new federal rules within 60 legislative days — which can actually stretch months — by a simple majority vote, and with the president’s signature. That means if the rules aren’t finalized in time and Biden loses his re-election bid, some of the headway his agencies make to cut emissions could quickly be erased.

We talked to former staffers and lobbyists to get a handle on how a shutdown would affect climate and environmental programs throughout the federal government.

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The Internal Revenue Service

Yes, the IRS has an important role to play here. Much of the Inflation Reduction Act’s implementation is actually up to the IRS writing rules outlining how companies can qualify for tax credits. For example, the agency has yet to even propose rules to claim the lucrative tax credits for producing clean hydrogen, or finalize others on electric vehicle battery and mineral sourcing requirements, or apprenticeship requirements, or how tax-exempt entities can qualify for funding.

It’s not clear whether the IRS would continue to chip away at these processes if there’s a shutdown. When one loomed last year, the agency’s contingency plan said that its more than 80,000 employees would still be able to work thanks to “supplemental appropriations available through September 30, 2031.” But whether that will be the case this year remains unclear.

The National Treasury Employees Union, which represents IRS workers, told its members that the IRS would “partially close” should a funding deal not be reached by September 30, according to the Federal News Network. The NTEU did not respond to a request for comment. A Treasury spokesperson also declined to comment and said that contingency plans would be released later this week.

Even if the IRS continues working on the rules, it will likely not be able to engage directly with industry or outside groups while the government remains closed, a former Department of Energy official, who asked not to be named, told us. “There’s still a lot of guidance that we’re waiting for, it’s critically important that it continues to move forward,” the former official said. “Activities that are people driven — negotiating, educating, and guidance — those are going to be much more impacted.”

There also wouldn’t be any of the announcements and public and private engagement that takes up much of the rulewriting process, the former official said.

And even if the IRS continues to work at something like its full potential, any work it has to do with other agencies whose funding runs out could be impacted, a lobbyist who works on energy issues pointed out to us. “Carryover funds may mean a short shutdown isn't a big deal, but a prolonged one could compound what is already a huge strain on agency resources and bandwidth,” the lobbyist said.

The Environmental Protection Agency

The EPA is in the middle of several rulemakings that are essential to U.S. climate progress, including regulations on cars and trucks, as well as power plants, and the experts we spoke with did not think a government shutdown would put the rules at risk. Stan Meiburg, a former EPA acting deputy director, told us he noticed the agency had denied petitions from stakeholders to extend the comment period for the car emissions proposal, which tells him staffers are trying to get the rules out the door to safeguard them from a future administration.

“I think both of those standards, while they may be delayed a couple of weeks from their original time tables, will still meet the deadlines the agency has in mind for them,” he told us.

The EPA is also the lead administrator for about $41 billion from the Inflation Reduction Act, including billions in clean energy grants. That’s not expected to be affected by a shutdown, since the IRA included some budget for staffing. However, the agency’s regular grant work, including funding distributed to states to conduct their environmental protection work, will come to a screeching halt, said Nicole Cantello, a lawyer at the agency who spoke with us in her capacity as president of the government employees union local in Chicago.

Cancello said that overall, the agency would be “profoundly affected” by a shutdown with 93% of its staff expected to be furloughed. A lot of the country’s air and water quality monitoring occurs at the state and local level, but some environmental enforcement capacity will certainly be lost, she told us. During the last government shutdown, she was in the middle of an enforcement case where the agency was collecting air quality data at the fenceline of a polluting facility that was directly next to a neighborhood. All of the data was coming into employees’ inboxes, she said, “and they couldn’t look to see whether or not that data showed that these people were endangering that community or not. I remember how frustrating that felt.”

Meiburg, who was with the agency through several shutdowns, told us they have disrupted time-sensitive research projects and caused supply chain breakdowns. The EPA inspects all pesticides that are imported into the country, and during past shutdowns the pesticides began piling up in warehouses, he said.

But Meiburg said there’s typically a small number of people who will still be on call in case of an environmental disaster, like the Maui wildfires or the toxic train derailment in East Palestine.

The Department of Energy

The Department of Energy plays a major role in climate policy, including overseeing the Loan Programs Office and making grants and funding demonstration projects for early stage energy technology like long duration batteries, advanced geothermal, and direct air capture. Many of those activities would likely continue.

According to the agency’s publicly available “lapse plan,” about 5,500 of its around 14,000 full-time employees would stay on in case of a shutdown. The multi-year appropriations provided by IRA and the infrastructure law would keep just over 1,000 of those employees on the job, according to the document: “As of August 4, 2023, 1,040 DOE employees were fully or partially funded by multi-year appropriations; these employees would continue to perform funded work after the exhaustion of DOE base funding.” Around 3,000 employees of the Bonneville Power Administration, the public power company in the Pacific Northwest, would continue working because it funds itself through power sales.

In the case of a shutdown lasting less than about a week, “It is anticipated that there would be no disruption to DOE operations during a short lapse in appropriations,” a guide to the shutdown published on the DOE website says. “DOE has historically had sufficient previously appropriated funds that remain available to support operations during a short term lapse.”

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