Talk about cutting off your nose to spite your face.
Initial budget blueprints released by House Republicans this week would take an ax to clean energy incentives created by the Biden-era Inflation Reduction Act. Most of the IRA’s tax credits — most of which have primarily benefited Republican-led states and districts — would be eliminated, phased out, or made unworkable to make way for tax cuts skewed towards the wealthy.
The popular 45X Advanced Energy Manufacturing Credit, which has catalyzed more than $200 billion in new private investments and sparked a domestic manufacturing revival, mostly in red states, would be phased out by 2031. Even before then, new provisions would prohibit most companies from using it.
Unobligated funds for the $400 billion Loan Programs Office and the embattled $27 billion Greenhouse Gas Reduction Fund would be rescinded. The LPO program, run out of the Department of Energy, has been instrumental in commercializing promising new technologies.
Also on the chopping block: Environmental Justice Block Grants, tax breaks for consumers buying electric appliances and EVs, and the direct pay and transferability options, which enabled a broader group of developers to access IRA credits.
Pushback
“These bills are an affront to American communities struggling with a cost-of-living crisis, working people trying to support their families, and those living in sacrifice zones with polluted air and water,” declares Evergreen Action, which has put together an analysis of the proposed cuts. The environmental nonprofit among the organizations urging concerned citizens and professionals to contact their representatives.
The proposed tax and spending bills have set off a fresh round of lobbying, as clean energy advocates try to head off the cuts as the negotiations move to the Senate.
“By raising taxes on manufacturers and energy producers, eliminating grant and financing programs that are spurring private-sector investment, and upending standards that are driving innovation in key strategic sectors, this legislation puts the US at severe risk of ceding its global leadership in this century’s most important industries, reducing jobs in manufacturing, and raising costs on Americans’ electricity bills,” said Zach Friedman of the investor and business advocacy group Ceres.
Some Senate Republicans are already pushing back on disruptions to policies that has benefited their constituents. As Senator Lisa Murkowski of Alaska, who has defended the clean energy credits, told reporters, “Anything that comes over from the House, almost by law, we’ve got to redo.”
