Harry Reid: Crude Oil Exports Holding Up Budget Negotiations

The 40-year-old embargo is "the only major outstanding issue."

WASHINGTON -- Negotiations over a year-end government funding bill and sweeping tax extenders package appear to be stuck over a provision that would lift a 40-year-old ban on crude oil exports, according to the top Democrat in the Senate.

Senate Minority Leader Harry Reid (D-Nev.) offered a glimpse into the secretive talks when he said Democrats are prepared to lift the embargo as long as Republicans agree to substantial extensions of tax credits for renewable energy like wind and solar. 

"At this point the only major outstanding issue is the Republicans' insistence on raising the import ban on crude oil," Reid said Tuesday on the Senate floor. "We've made it clear that if they want this oil export ban, there must be included in this policies to reduce our carbon emissions and encourage use of renewable energy."

Reid said he remains optimistic about negotiations. However, Republican leaders have denied "multiple offers" Democrats have made about the crude oil ban, which was established in response to the 1973 Arab oil embargo.

"An agreement could be filed now that covers most everything that we've discussed and would keep the government funded fully for a year," Reid said. "Republicans need to take 'yes' for an answer. That's all they need to do: pair the oil export ban with much-needed policies to reduce our carbon emissions and build more renewable energy."

In exchange for lifting the embargo, Democrats want tax credits for renewable energy in the robust extenders package, a reauthorization of the Land Water Conservation Fund and for all anti-environmental riders targeting the administration's climate change regulations to be taken off the table. 

So far, Reid said, Republicans haven't agreed to the trade-off. If a deal over oil exports isn't struck soon, he added, lawmakers should just push ahead with the omnibus and tax extenders package without the exports ban and renewable energy provisions attached. 

"So I say to everyone that's listening here this morning, its decision time," Reid said. 

Senate Majority Leader Mitch McConnell (R-Ky.) offered little details of ongoing talks, but said he expects final text of both bills to be filed in the House by the end of Tuesday.

At this point, Congress will need to pass a second short-term government funding measure to give themselves enough time to finish work on the omnibus and tax package. 

White House spokesman Josh Earnest reiterated the president's opposition to lifting the ban, but wouldn't go so far as to threaten a veto of the omnibus or tax package over the inclusion of such a provision.

"Our position on the export ban is pretty clear: We do not support legislation that would lift it," Earnest said. "But we've also acknowledged that an omnibus bill is going to have to be a compromise proposal. So I'm confident that there will be things that will be included in the omnibus bill that we don't support. I don't know if the lifting of the export ban will be among them."

Jennifer Bendery contributed to this report. 

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