The sound emanating from Capitol Hill last night, punctuated by a terse statement from outgoing Senator Joe Manchin, was the slamming shut of a window of opportunity for permitting reform after months of deliberation.
“By taking permitting off the table for this Congress, Speaker Johnson and House Republican Leadership have done a disservice to the incoming Trump Administration…this is just another example of politics getting in the way of doing what’s best for the country. Leadership means you must lead and leading means making hard decisions and not letting the perfect be the enemy of the good for all of our constituents.”
Johnson shot back: “If [Democrats] were truly committed to reaching an agreement, negotiations would have started months ago — not after they lost the election.”
Congress’ failure to advance the Energy Permitting Reform Act is personally disappointing for Manchin, who has been pushing for several years now to speed up permitting for energy projects across the country and wanted to advance the bill to the President’s desk before he leaves the Senate in 17 days. One reporter described him as “despondent” last night.
So where does permitting reform go from here? Unlike too many issues on the Hill, updating permitting laws garners support from a strange mix of bedfellows. There’s something for everyone in a reform package, from the most conservative members who want to ease the way for more fossil fuel buildout to the most liberal members who know the clean energy transformation can’t happen without shorter timeframes for making projects a reality. These factors make inaction unlikely. (Yes, I know this is Congress we’re talking about. But still.)
In his statement last night, Manchin bemoaned that “[m]eaningful permitting reform will continue to be subject to the Senate’s 60-vote threshold next year and cannot be done by executive action alone.”
Passage of a More Conservative Bill is Likely in 2025
It would be surprising if this legislation in 2025 doesn’t become more conservative and more pro-oil and gas, given the power shift in Congress. In fact, there’s no doubt this reality factored into Johnson’s calculation to hold off for now. Among the biggest concerns is what happens to provisions to strengthen grid interoperability and ease construction of new transmission lines, which are critical for clean energy projects and were a top priority for Democrats.
That said, the 60-vote threshold in the Senate should prevent dramatic changes to the bill. Bear in mind that seven of ten Democrats on the Senate Energy and Natural Resources Committee voted to advance Manchin-Barrasso in July. (The overall vote was 15-4.) Republicans will hold 53 seats. Getting to 60 votes in the next Congress is well within reach, even with NEPA reforms for which House Republicans have pushed, but cutting out transmission would jeopardize the entire bill.
In the House, Johnson is working with the slimmest of margins, and bills must gain approval from a coterie of moderate Republicans who survived their election in November but know they face headwinds in two years as the political pendulum swings back against the party in power for the 2026 midterms. Tinker around the edges, sure. But wholesale changes that leave the bill bearing little resemblance to Manchin-Barrasso would not pass muster.
How It (Almost Certainly) Won’t Happen
Senator John Thune, who will take the reins of the Senate Republican caucus starting January 3, is pushing for Trump and Johnson to align with him on a two-part strategy: pass reconciliation legislation within 30 days of Trump taking office that focuses on energy and border security. Then, later in the year, pass the tax cuts package through another reconciliation bill — nevermind that historically Congress can only use the reconciliation process once a year.
Thune’s thinking is that the tax legislation will require more time, such as for Cabinet officials to be confirmed by the Senate so they can participate in negotiations, as well as deliberations among members of Congress on the particulars. There’s already a brewing divide among the GOP on what’s considered new spending and needs to be offset. Some, including the powerful incoming chair of the Senate Finance Committee, Mike Crapo, are pushing gimmicks that could add trillions to annual deficits and the national debt.
As Democrats experienced in 2022 with the Inflation Reduction Act, policy changes not directly related to the budget cannot be included in a reconciliation bill. During the IRA negotiations, lobbyists and staffers worked overtime contorting policies to tie to the budget so they could pass muster with the Senate parliamentarian. This time around, some influential Republicans are planning to push the boundaries of the so-called Byrd Rule, which mandates the budget connection, even further.
“If you look back at the IRA, the Democrats went way beyond what anybody ever thought you could do in reconciliation,” House Natural Resources Chair Bruce Westerman told Politico last month. “They had 12 committees of jurisdiction involved. So we’re studying what they did to get things kosher with the parliamentarian.” Senator Ted Cruz also told Politico that he thinks it’s possible, too.
It’s not inconceivable that Republicans will find a way to pass permitting reform through a reconciliation bill. They could find a workaround. They could ignore the parliamentarian. But they may not need to take drastic measures.
How It Could Happen
Assuming legislators overcome the last-minute chaos inflicted by Trump and pass a stopgap resolution to keep the government funded this week, they will set up a new deadline of March 14, when the government will once again need to be funded. This presents an opportunity to attach bills, like ornaments being hung on a Christmas tree, and a government funding bill is the next best chance for permitting reform to pass. Compared with tax legislation, a permitting reform bill is almost fully baked. Legislators should be able to hash out remaining sticking points between now and March.
Another option, of course, is that permitting reform could pass as standalone legislation, detached from other major or must-pass bills. However, the trend in Congress for the last decade or so has been that nothing moves forward unless a deadline forces action. While there’s a sense of urgency for acting to change permitting, there’s no concrete deadline that would spur a vote by itself.
One way or another, odds are good that permitting reform reaches the President’s desk in 2025. As Manchin noted last night, “It’s undeniable that our country needs to deliver more energy of all kinds…[the Trump administration] has been focused on strengthening our energy security and will now be forced to operate with their hands tied behind their backs when trying to issue permits for all of the types of energy and infrastructure projects our country needs.”
It’s not often that incentives align to this extent for members of Congress in both parties and the President. While Trump can and will take executive action to speed up oil and gas approvals, he can only go so far. These realities bode well for finally getting permitting reform across the finish line in the coming months.
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