Overnight Energy & Environment

Energy & Environment — Sinema says yes to climate, tax deal 

Sen. Kyrsten Sinema (D-Ariz.) leaves the Capitol with staff after votes on Thursday, October 28, 2021
Greg Nash

Senators are preparing to vote on historic climate legislation after all 50 Democrats say “yes.” Meanwhile, China ceases climate and military cooperation with the United States over Speaker Nancy Pelosi’s (D-Calif.) trip to Taiwan.

This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Someone forward you this newsletter? Subscribe here. 

Sinema announces agreement on reconciliation

Sen. Kyrsten Sinema (D-Ariz.) announced Thursday evening that she has reached a deal with Senate Majority Leader Charles Schumer (D-N.Y.) that could pave the way for Democrats to pass their budget reconciliation package.  

The deal would remove a provision closing the so-called carried interest loophole from the package announced last week by Schumer and Sen. Joe Manchin (D-W.Va.). 

Sinema said she and Schumer have also reached agreement on protecting manufacturing from the impact of a proposed 15 percent corporate minimum tax, which business leaders in Arizona warned would dampen economic growth.   

The announcement paves the way for Sinema to vote Saturday for a motion to proceed to a budget reconciliation package that would reform the tax code, tackle climate change, reduce the cost of prescription drugs and shrink the federal deficit.   

  • “We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation,” Sinema said, signaling that she plans to vote to begin debate on the bill.   
  • “Subject to the parliamentarian’s review, I’ll move forward,” she said.   

A Democratic source familiar with the agreement said it would include a new excise tax on stock buybacks that would bring in more than enough revenue to cover the removal of the carried interest provision.   

Read more about the agreement here from The Hill’s Alexander Bolton.  


The Senate is expected to take up the reconciliation bill in the coming days and the House is now slated to take on the fast-moving legislation next week. 

The Senate is expected to convene on Saturday. It’s not entirely clear when over the next few days the reconciliation bill will be voted upon, since lawmakers get up to

20 hours to debate the bill. After that, they’ll vote on a series of amendments, known as a vote-a-rama, before proceeding to the bill itself.  

The House is planning to reconvene next Friday and take up the Democrats’ sprawling climate, tax and health care bill, pending Senate passage of the multibillion-dollar package in the coming days.  

  • House Majority Leader Steny Hoyer’s (D-Md.) office sent out a floor update on Friday announcing that votes are expected on Friday, Aug. 12. The House is currently out of session for August recess. 
  • “Members are advised that pending Senate action on the Inflation Reduction Act of 2022, the House is expected to meet on Friday, August 12th, to consider the legislation,” the floor update reads. 

Read more about the Senate’s plans here from Alexander Bolton and the House’s plans here from Mychael Schnell.  

Reconciliation includes $4B for drought resilience 

The reconciliation package slated for a congressional vote this weekend includes $4 billion in new funding for the drought pummeling the western U.S. 

The package, dubbed the Inflation Reduction Act, includes the new funding specifically for the Bureau of Reclamation to address the 22-year drought, the worst to hit the region since the year 800, according to a statement from Sens. Michael Bennet (D-Colo.), Catherine Cortez Masto (D-Nev.) and Mark Kelly (D-Ariz.). 

  • “The Western United States is experiencing an unprecedented drought, and it is essential that we have the resources we need to support our states’ efforts to combat climate change, conserve water resources, and protect the Colorado River Basin,” the senators said in a statement. 
  • “This funding in the Inflation Reduction Act will serve as an important resource for Nevada, Arizona, and Colorado, and the work we’ve done to include it will help secure the West’s water future.” 

A Senate source familiar with the funding confirmed to The Hill the $4 billion is new funding. 

How we got here: After Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) came to an agreement on a climate and tax package, questions remained about Sinema’s stance. 

CNN reported this week that Sen. Kyrsten Sinema (D-Ariz.) wanted $5 billion in drought funding to be added to the package. 

Sinema spokesperson Hannah Hurley said that the additional drought funding played a role in the senator’s agreement to the deal.   

A source familiar with the negotiations said that numbers between $0 and $5 billion for drought resilience were on the table and that Bennet, Kelly and Cortez-Masto were integral in getting the $4 billion figure. 

The announcement comes as the drought takes an increasing toll on the region, causing two of the nation’s largest reservoirs, Lake Powell and Lake Mead, to plunge to record lows. 

Read more about the funding here.  

China suspends climate, other talks with the U.S. 

The Chinese Ministry of Foreign Affairs on Friday said that the country would halt its cooperation with the U.S. on military and climate matters in response to Speaker Nancy Pelosi’s (D-Calif.) trip to Taiwan. 

The foreign ministry announced eight “countermeasures” against Pelosi after she visited Taiwan “in disregard of China’s strong opposition and serious representations.” 

On the list of measures was “suspending China-U.S. talks on climate change.” 

China is the world’s largest source of planet-warming emissions, while the U.S. is the second-largest emitter.  

At last year’s global climate conference, American and Chinese officials said they would cooperate on regulations to cut emissions, encouraging electrification and deploying emissions-capturing technology.  

Read more about China’ actions from The Hill’s Chloe Folmar. 


Kentucky is facing enormous financial costs to rebuild after massive flooding in the eastern part of the state that has left 37 people dead and hundreds homeless.   

While the Federal Emergency Management Agency (FEMA) is still assessing the toll, Gov. Andy Beshear (D) said the state would need “significant dollars,” describing the disaster as “the most devastating flooding event our state has ever seen.”  

“When we look at infrastructure, when we look at the massive damage here – roads, bridges just eaten away, the water system just heavily damaged, some wiped out. It’s going to take significant time and significant dollars to restore what was destroyed. [There was] real significant damage to water and wastewater systems,” Beshear said Wednesday.  

  • Jonathan Jett, superintendent of public schools in Perry County, Kentucky, said in an interview with The Hill that he expects it will require millions of dollars to rebuild public infrastructure in his school district.  
  • “This will take years,” Jett said. “I have two schools with significant, significant damage. I’m waiting to hear from structural engineers and architects who are coming next Wednesday to see if we can even go back in the building. I’m not having people in there before I know it’s structurally sound.”  

One of the most potentially expensive consequences of this year’s Kentucky flooding is the damage to the state’s water and sanitation infrastructure, Beshear said. 

On Wednesday, he said there were “still just over 18,000 service connections without water, 45,600-ish service connections under boiled water advisory, [and] 21 water systems under limited operation due to power outages and storm damage.”  

The climate change tie-in: As climate change makes extreme weather worse and more frequent, there are expected to be more flooding events, and more intense weather events, in the future.  

Melissa Roberts, executive director of the American Food Coalition noted, however, that this isn’t just a future problem, saying the world has already seen the impacts in the last five to ten years.  

“We’re getting more devastating flood disasters, we’re getting them in more places, we’re getting them more frequently and the costs are rising,” she said. 

Read more about these costs here.  


  • How Republicans Are ‘Weaponizing’ Public Office Against Climate Action (The New York Times
  • Revealed: how climate breakdown is supercharging toll of extreme weather (The Guardian
  • Canada Says Ukraine Gas Route Isn’t Alternative to Nord Stream (Bloomberg
  • Coroner reveals new details about skeletal remains discovered at Lake Mead (8NewsNow

🔭 And finally, something offbeat and off-beatHow the sausage is made. 

That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you next week.  


Tags Chuck Schumer Joe Manchin Nancy Pelosi

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