Republicans plotting their party’s post-election policy agenda have a decision to make: What do they do with the Democrats’ 2022 climate law, now that its clean energy tax breaks are drawing growing GOP support?
No Republican voted for the Inflation Reduction Act two years ago, and conservatives consistently charge that its hundreds of billions of dollars in subsidies for electric vehicles, wind, solar and other technologies will drive up prices, distort the markets and benefit China.
But the law is undeniably bringing federal money, private investments and jobs into communities around the country overwhelmingly represented by Republicans — and the once-united opposition is fraying.
It’s all part of an intensifying debate within the Republican Party about how to respond to climate change, a rising priority for many young voters. And while more GOP lawmakers say they want to be active on the issue, many conservatives — including Republican presidential nominee Donald Trump — still don’t buy the reality of human-caused global warming and the impact of fossil fuels.
This month, 18 House Republicans signed onto a letter asking Speaker Mike Johnson to spare the energy tax credits from efforts to repeal the Inflation Reduction Act, with many of them seeing the incentives as both good for the planet and extremely beneficial for local economic development.
While some Republicans have been suggesting for months they may decide to keep parts of the law, the letter was the first coordinated effort in that direction.
“Industries that Republicans have always supported [are] saying, ‘God, I hope we can talk about this before we pull it back,’” said Rep. Andrew Garbarino (R-N.Y.), co-chair of the House’s bipartisan Climate Solutions Caucus, who organized the letter.
Other GOP lawmakers and groups are firing back, accusing the letter-signers of hypocrisy and flip-flopping.
Texas Rep. Chip Roy, a member of the hard-right Freedom Caucus, noted that the 18 Republicans voted last year to repeal the IRA climate subsidies.
“Now, [they] want to preserve so-called ‘green’ handouts to Democrats’ corporate cronies,” Roy, who was among the conservatives who demanded that the subsidies be repealed as part of the GOP’s opening bid to raise the debt ceiling, wrote on X.
“The GOP must ignore K-Street lobbyists and refuse to fund the climate corporate cronies destroying our country,” Roy added.
An X campaign account for Rep. Bob Good (R-Va.), the chair of the conservative Freedom Caucus, responded to Roy’s post in agreement: “Repeal the IRA now. Completely.” Good lost his reelection primary this year to a candidate more aligned with Trump.
Mike McKenna, a GOP energy lobbyist who worked in the Trump White House and has been in touch with congressional aides on possible budget reconciliation plans for next year, was dismissive when discussing the letter.
“I’m assuming that was an announcement of an IRA caucus,” he said of Garbarino’s effort.
A roster of conservative groups marked the two-year anniversary on Aug. 16 of President Joe Biden signing the IRA by firing off a letter to lawmakers decrying what they see as wasteful spending in the climate law, including direct grants to communities.
“Selective repeal of a few IRA provisions will not suffice,” they wrote.
GOP leadership has not yet offered a hint of how it’s reacting to the letter. Taylor Haulsee, a spokesperson for Johnson, said the speaker’s office was “in receipt of the letter” but had no further comment.
Johnson has not been publicly engaged on climate issues, in contrast to former Republican Speaker Kevin McCarthy, who worked to create an agenda for the party on the environment and conservation.
That agenda included policies like planting more trees and promoting innovation, while fighting Democratic efforts to move away from fossil fuels.
Republicans won’t have to make a final decision for another several weeks or months regarding the fate of the tax credits.
The November elections will determine the balance of power in Washington and dictate whether there’s a path to repealing any part of the IRA through the budget reconciliation process, which allows a majority party to bypass the Senate filibuster. Democrats used the same process to pass the IRA.
Trump’s priority would be extending the tax cuts first put in place during his administration in 2018. Observers widely expect GOP leaders to take their cues from him about how to proceed.
“As far as backlash from the Trump team, I think it depends how aggressive these members are in defending the IRA in its entirety,” said Nick Loris, vice president of public policy at the Republican-aligned firm C3 Solutions, “and if they become an obstacle to Trump wanting to use this as a pay-for for his [reconciliation] bill.”
During a news conference, Trump called the Inflation Reduction Act a “con job.” He has promised to scrap Biden pro-EV rules but has been more nuanced about EV tax credits.
On climate change broadly, Trump appears unmoved. In a conversation with Tesla CEO Elon Musk on X a few days earlier, Trump repeatedly rebuffed the electric car entrepreneur on climate issues, at one point saying rising sea levels could create “more oceanfront property.”
‘These guys get it’
As the 18 Republicans received pushback from within their own party on signing a letter in support of the IRA’s energy tax credits, Democrats were also causing the lawmakers political headaches.
White House climate adviser John Podesta was still talking about the letter a week later: “These guys get it,” he said at an event hosted by the think tank Third Way to mark the IRA’s second anniversary.
Podesta said the law has helped support projects totaling $265 billion in investments, with an analysis from the Democratic-aligned group Climate Power showing 58 percent of the new jobs are in congressional districts represented by Republicans.
And he pointed to Republican governors — including Kevin Stitt of Oklahoma and Henry McMaster of South Carolina — welcoming the activity in their states.
Podesta read aloud from the letter, quoting the Republican lawmakers who said fully repealing the energy tax credits would undermine private investments, “stop development that’s already ongoing” and “create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return.”
Garbarino said he timed sending the letter with a desire to put down a marker as discussions about a GOP reconciliation bill were intensifying.
A Garbarino aide — granted anonymity to share private conversations — later noted that the congressman had “heard from a lot of industry stakeholders that were thrilled with the letter and the opportunity to plead their case.”
Democrats are unsurprised. After the event, Podesta told POLITICO’s E&E News: “We’ve seen industries that were against the Inflation Reduction Act now lobbying to keep the tax credits. I’ve done probably three, four appearances with Darren Woods, who extolled the virtues of the Inflation Reduction Act — the CEO of Exxon. So does that have an effect on Capitol Hill? Sure.”
‘All options are on the table’
The extent of that effect remains to be seen, though Garbarino said he suspected that at least “another dozen” House Republicans supported the aim of the letter but were politically nervous about signing their names.
In the meantime, lobbyists and Capitol Hill aides have been trading reconciliation proposals in the event Republicans control Washington next January.
“They are in the collecting ideas phase,” said McKenna. “Everyone is like, ‘Hey, what are your best ideas?’ Reconciliation is kind of the Wild West of legislation. It doesn’t have a lot of constraints of regular legislation.”
For months, House Republicans on 10 “tax teams” have been meeting to dissect and scrutinize a range of tax provisions from 2018 — when Trump was president and the GOP controlled both chambers of Congress — that are set to expire at the end of next year. Renewing all the Trump tax cuts could cost $4.6 trillion over 10 years, the nonpartisan Congressional Budget Office has estimated.
If Republicans win control of the House, Senate and White House again, leaders say they will seek to extend the Trump programs, put new ones in place and weed out some others previously passed by Democrats. Rep. Jason Smith (R-Mo.), chair of the tax-focused Ways and Means Committee, declared in June that “all options are on the table.”
Rep. Carol Miller (R-W.Va.), who’s leading a tax team on supply chains, has been touring the country to see how the clean energy tax incentives codified in the IRA are either hurting or helping American energy production.
“In 2025, we will likely have the opportunity to investigate which of the misguided credits from the Inflation Reduction Act have made our grid less reliable, directed capital to the wrong resources, or hurt American energy production,” she said in a statement, “and decide which parts of the code are helping our energy communities thrive.”
As a staunch conservative from a coal state, Miller didn’t sign onto the recent Garbarino letter. Still, she has supported carbon capture incentives expanded in the climate law.
Loris said to expect members to treat the tax credits as something of a buffet, with Republicans picking and choosing what they like and what they don’t.
It could resemble a showdown from 2023, when the all-Republican Iowa congressional delegation rebelled against the GOP’s plans to slash the IRA’s tax credits for ethanol as part of its debt limit plan. Republican leaders ultimately agreed to extend a fig leaf, proposing to cut all the other energy credits except for that one.
“There’s going to be some division for sure, but it’s not going to be black and white, either,” Loris said.
“There are some members who oppose subsidies in all forms and have real concerns about the ballooning costs of the IRA and our national debt,” he predicted, “and other members who will support some tax credits that are benefiting their respective districts.”
A version of this report first ran in E&E News’ E&E Daily. Get access to more comprehensive and in-depth reporting on the energy transition, natural resources, climate change and more in E&E News.
