Estimated read time: 4-5 minutes
- House Republicans are divided on preserving clean energy tax credits.
- Some argue these incentives are vital for energy and manufacturing investments.
- Others demand a full repeal, complicating GOP budget reconciliation efforts.
WASHINGTON — A quiet feud over whether to preserve certain provisions in former President Joe Biden's Inflation Reduction Act could endanger Republican efforts to pass their own massive budget reconciliation bill later this year.
A growing number of House Republicans are banding together in an effort to keep the clean energy tax breaks approved in Biden's signature climate bill, arguing the incentives helped draw in billions of dollars in manufacturing and other investments. If abruptly withdrawn, the lawmakers argue, it could cause drastic cost increases in utility bills "the very next day."
"Many credits were enacted over the course of a 10-year period, which allowed energy developers to plan with these tax incentives in mind," the Republicans, led by Rep. Andrew Garbarino, R-N.Y., wrote in a letter to House Ways and Means Committee Chairman Jason Smith, R-Mo.
"As energy demand continues to skyrocket, any modifications that inhibit our ability to deploy new energy production risk sparking an energy crisis in our country, resulting in drastically higher power bills for American families," they added.
The Inflation Reduction Act was enacted in August 2022 as part of Biden's efforts to incentivize renewable energy sources and reduce carbon emissions. The law was lauded by Democrats as a "historic investment" to transition to a clean energy economy while encouraging energy efficiency.
'Business-friendly environments'
However, many of the provisions are now on the chopping block after President Donald Trump vowed to dismantle federal efforts to address climate change as a major part of his reelection campaign. Those promises included repealing Biden-era environmental regulations, withholding congressional funds, stalling wind energy permits, and accelerating fossil fuel projects.
Republicans who support the clean energy tax credits argue those incentives are crucial to supporting Trump's goals for the United States to become energy dominant over the next decade.
"Affordable and abundant energy will be critical as the President works to onshore domestic manufacturing, supply chains, and good paying jobs, particularly in Republican run states due to their business-friendly environments," the lawmakers wrote. "Pro-energy growth policies will directly support these objectives."
And some members suggest they'll withhold their support on the full reconciliation package if the tax credits are not preserved.
"We have 20-plus members saying, 'Don't just think you can repeal these things and have our support,'" Garbarino told Politico.
Meanwhile, other Republicans in the House say the Inflation Reduction Act must be repealed in full — or else they won't back the reconciliation package.
"I mean a full repeal, within like 99% (or) within some degree of certainty — you need to repeal all or yeah, I'm not going to be too favorably disposed for a reconciliation package that doesn't repeal that," Rep. Chip Roy, R-Texas, told the Deseret News. "The tax code can have provisions in it for investments and stuff, like your business costs. But that's not the same thing. We don't need subsidies for this crap."
'It's Trump's agenda'
Other Republicans who back a full Inflation Reduction Act repeal say that's crucial for the upcoming tax reconciliation bill, arguing it's what Trump has called for.
"It's Trump's agenda, and Trump has said he wants the entire thing repealed and he wants to take that money and those savings and give it back to the American people in the form of tax cuts," Rep. Eric Burlison, R-Mo., told the Deseret News.
The competing demands creates a mathematical headache for House Speaker Mike Johnson, R-La., who must wrangle the slim House majority to pass the budget reconciliation package without any Democratic support.
Current margins in the House gives Johnson only a one- or two-vote margin if all lawmakers are present — meaning he can't afford holdouts if he wants to ensure its passage.
But even if those Republicans are successful in preserving clean energy tax credits, that will make the task of finding cost offsets that much harder in the final package.
Under the House budget resolution, committees must find $2 trillion in spending cuts over the next decade split across seven committees. Those instructions include at least $880 billion in cuts from the Energy and Commerce Committee, which would leave little room for lawmakers to find if they vow not to cut from clean energy tax incentives or Medicaid and Social Security benefits.
Burlison, among several other GOP lawmakers and Trump himself, say Medicaid is off the table for possible spending cuts — using that as a main argument to cut away at the clean energy tax credits.
"Tell me where you're gonna find the money," Burlison said. "You can't have your cake and eat it too."
