Green credits not a hill to die on for supportive Republicans

March 12, 2025

A bloc of House Republicans is doubling down on their public support for protecting renewable energy tax credits — but exactly how far they will go to save at least part of former President Joe Biden’s climate law remains unclear.

Twenty-one Republicans over the weekend sent a letter to Ways and Means Chair Jason Smith (R-Mo.) — the House’s lead tax writer — voicing support for “sector-wide energy tax credits” intended “to make major investments in domestic energy production and infrastructure for traditional and renewable energy sources alike.”

The letter comes as Republicans are beginning in earnest to seek out savings in their budget reconciliation bill. The bill seeks to cut taxes, boost spending on the border and bolster energy — all along party lines.

The purpose of the letter was to emphasize that at least 21 Republicans do not want to “throw out the IRA entirely,” said GOP Rep. Buddy Carter, one signer who has relentlessly touted a $7.6 billion Hyundai vehicle and battery plant in his deep-red Georgia district. The company said it sped up construction to take advantage of domestic production incentives.

But despite this renewed push — after a similar one last summer — and new signatures, not all GOP supporters of Inflation Reduction Act provisions would threaten to vote against legislation coveted by Republican leaders and the White House.

“For me, it’s not a red line,” Carter said. “For some people on that letter, it may be. I don’t know the answer to that.”

Rep. Erin Houchin (R-Ind.) said she signed because she wants “to take a thoughtful approach to what credits — if any — we’re preserving.”

Houchin didn’t offer specifics but said the point of the letter was “to say we should be thoughtful about it.”

“We shouldn’t just rip everything out,” she said.

Rep. Dan Newhouse (R-Wash.), a new signer, said, “We have huge energy needs coming up. A lot of people have invested with the promise of the government coming through.” He thought the letter was part of “an effort to make sure the issue is on the table.”

And Rep. John James (R-Mich.), who has led efforts to roll back Biden administration actions to promote electric vehicles, said last month that automakers in Michigan are urging members to “work together to come up with a reasonable glide path.” He added, “We’re working hard on that. We’re looking forward to a reasonable solution.”

Moderate Republican Rep. Nick LaLota (R-N.Y.) reasoned the conference will have to figure it out. “Members will have to negotiate and haggle and fight over their priorities,” he said in an interview last month. “And I’m one of the 12 who wants some of those credits to stay.”

Jason Smith speaks during a press conference.
House Ways and Means Chair Jason Smith (R-Mo.). | Francis Chung/POLITICO

The new letter could make Smith’s job as Ways and Means chair more difficult as tax writers comb through the code to look for ways to pay for impending GOP legislation that would extend the expiring 2017 tax cuts and advance other priorities.

Smith seemed unhappy Tuesday when asked for his response to the group: “That’s the second time I’ve received that letter,” he said curtly, declining to answer follow-up questions.

Slashing the Inflation Reduction Act tax credits could provide Republicans with a sizable saving to pay for their budget bill. While the Congressional Budget Office initially said the clean energy subsidies would cost roughly $369 billion over a 10-year period, analysts project that number could triple as more project owners access the programs.

Top Republicans are eyeing pairing a repeal of the EV tax credit with a rollback of the Biden administration tailpipe emissions rule, though there is uncertainty whether they can do that.

Travis Fisher — a former Trump Department of Energy adviser and current director at the libertarian Cato Institute — asserted the Inflation Reduction Act amounts to a “massive cash transfer under the guise of environmentalism.” He released a paper Tuesday stating the actual cost of the uncapped programs through 2050 could be closer to $4.7 trillion.

“I have heard a lot of talk about how hard the IRA will be to repeal,” he said. “It’s also difficult to pay for. At some point we’re going to run out of other people’s money. It’s going to have to come to an end one way or another. The question is how many taxpayer dollars are we going to spend to reform it?”

Republican leaders have said they are scrutinizing the range of Inflation Reduction Act incentives, emphasizing their preference is to eliminate most of them.

“People like myself would like to see all of them go away,” House Majority Leader Steve Scalise (R-La.) told POLITICO’s E&E News last week. “Our conference is going to be going through each one of them, and making those decisions as we get to reconciliation.”

Capitol Hill has been flooded lately with clean energy lobbyists and companies urging lawmakers to consider developers who have been relying on the existing tax structure to plan for projects that are overwhelmingly in red states and congressional districts — ranging from solar and wind power to carbon capture and biofuels.

“What we’ve been hearing from folks on the Hill that have major projects in their districts — particularly those in the billions of dollars and thousands of jobs — is they understand the importance of those projects to the community down to the constituent level, the family level,” said Albert Gore III, president of the Zero Emission Transportation Association.

The group is hosting a fly-in Tuesday and Wednesday where 22 companies representing the EV and battery supply chain — including critical minerals — are meeting with nearly four dozen congressional offices.

“In Tennessee, Ohio, Georgia, Kentucky, Michigan — these are communities that have been manufacturing things and cars for a long time and have seen disinvestment and are seeing investment come back and are excited about it.”

Exactly how this unfolds over the coming months, though, is anyone’s guess — and a lot is happening behind the scenes.

“People are talking every single day about this,” said Rep. Dusty Johnson (R-S.D.). “And so there aren’t going to be any surprises. People are communicating where they are at, and what they need to have and there’s overwhelming commitment within the Republican conference to have the broad swath of IRA tax credits scrubbed out.”

He thought a Midwest contingent would push for biofuel subsidies, as they did in 2023 when Republicans tried to strike ethanol tax credits from their debt ceiling bill. But he suggested some might be staying quiet.

“There are some very reasonable Midwest members who care about the development of ag-based energy who absolutely have red lines. They are not communicating them publicly because that’s not how they do business. They don’t make public demands. But there is a fair group — a fair-sized group — that just really believe in the future of America energy as derived from agriculture products.”

Reporter Andres Picon contributed.

This story also appears in Climatewire.

 

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