In a final attempt to dismantle the Inflation Reduction Act's (IRA) green energy subsidies, a hallmark of the Biden era, Congressional Republicans are leveraging President Donald Trump's "one big, beautiful bill.
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The House Ways and Means Committee revealed a draft bill aimed at repealing several IRA subsidies, including those for electric vehicles and so-called clean hydrogen. However, the bill maintains tax credits for carbon sequestration, biofuels, and advanced manufacturing, which primarily support solar and battery storage projects.
According to the Daily Caller, a more aggressive approach is being proposed by Republican Utah Sen. Mike Lee and Reps. Chip Roy of Texas and Josh Brecheen of Oklahoma. Their Energy Freedom Act seeks a comprehensive repeal of all green energy subsidies within former President Joe Biden's law. The proponents of the bill argue that this move aligns with Trump's 2024 election cycle pledge to dismantle Biden's "Green New Scam," a promise they believe GOP lawmakers must fulfill.
The budget reconciliation process, which Congressional Republicans are utilizing to pass vast portions of Trump's legislative agenda in a single package, allows them to bypass Democratic opposition with a simple majority vote in both chambers. This process could provide the only opportunity for GOP lawmakers during Trump's second term to dismantle Biden's climate policies. It's worth noting that Congressional Democrats also used the budget reconciliation process to pass the IRA in August 2022, circumventing a Senate filibuster despite unanimous GOP opposition.
"The Inflation Reduction Act, better known as the Green New Scam, is providing massive unlimited subsidies to billion-dollar corporations and Chinese manufacturers to the detriment of American energy freedom and dominance," Roy stated to the Daily Caller. He added that if Republicans wish to support the President's energy agenda and promote American energy dominance, they must fully and immediately repeal the "Green New Scam."
Lee, the chairman of the Senate Energy and Natural Resources Committee, told the Daily Caller, "America's energy policy should be about keeping the lights on and costs low not lining the pockets of special interests." He criticized the Biden Administration's green energy subsidies for rigging the market, driving up costs, and leaving our grid more vulnerable.
The proposed IRA repeal legislation would eliminate over 20 tax credits, including subsidies favored by moderate Republicans, for tax years beginning after December 31, 2025. The bill would also repeal the Biden-era law's petroleum tax and end the practice of project developers buying and selling green energy tax credits through a process known as transferability.
The nonpartisan Congressional Budget Office initially estimated that the green energy subsidies in the IRA would cost approximately $370 million over a decade. However, the cost of Biden's sweeping law has surged over the years. According to an analysis from the libertarian-leaning CATO Institute, the energy subsidies could burden taxpayers with up to $2 trillion by 2034 and nearly $4.7 trillion by 2050.
The most significant subsidies within the Biden-era law would only expire if greenhouse gas emissions are reduced to a level that seems unachievable within the next several decades. This is partly why the IRA's cost has skyrocketed, according to background obtained by the Daily Caller from Lee's office.
Adam Michel, director of tax policy studies at the Cato Institute, stated, "The IRA turned our tax code into a multi-trillion energy entitlement program, creating subsidies without caps, sunsets, or accountability." He added that if Congress is serious about energy independence, reliable energy, or the national debt, repealing the IRA is the only responsible path forward.
Roy warned that failure to include a full repeal of the IRA could jeopardize the passage of the budget reconciliation package in the House. He told the Daily Caller, "If Republicans are going to refuse to repeal the Inflation Reduction Act, they are not going to get a Republican tax bill through the House. Its costly, its inflationary, and we should repeal every dollar of it."
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