Twelve House Republicans are urging congressional leaders to consider “three thoughtful changes” to legislation that would repeal or scale back a host of tax incentives from the Democrats’ 2022 climate law.
The House Ways and Means Committee approved a bill Wednesday morning — after a full night of debate — that would scrap consumer credits for electric vehicle purchases and hydrogen fuel development, among other provisions. The rollbacks would help pay for an extension of the 2017 tax cuts and some of President Donald Trump’s other campaign promises.
Now, companies and moderate Republicans — who have been lobbying for months to save at least some Inflation Reduction Act benefits — are urging changes before the measure gets closer to becoming law. GOP leaders want a broad tax, energy and security package ready for Trump’s signature by July.
“We appreciate the Ways and Means Committee putting America first by investing in American energy dominance, but the last thing any of us want is to provoke an energy crisis or cause higher energy bills for working families,” said a group of Republicans in a statement Wednesday. “We urge the Committee to consider these important changes in this critical part of our One Big Beautiful Bill.”
Led by Rep. Jen Kiggans (R-Va.), the Republicans said the tax bill included some “reasonable phase-out schedules” but that changes would ensure “certainty for current and future energy investments to meet the nation’s growing power demand and protect our constituents from higher energy costs.”
Specifically, their three suggestions include revising a foreign entity of concern provision to give companies more time to reorganize their supply chains, tweaking standards for when companies qualify for credits and keeping the practice of “transferability” through 2031, when certain incentives would sunset. Transferability allows project sponsors to transfer credits to a third party to reduce their tax burden.
It’s unclear how seriously Ways and Means Chair Jason Smith (R-Mo.) and Speaker Mike Johnson will take the demands. Both are currently trying to appease a group of lawmakers balking at provisions concerning state and local tax (SALT) deductions.
Rep. Nick LaLota (R-N.Y.) has been helping lead the charge on the SALT issue, but has also expressed concern about the fate of climate law provisions. A problem is that increasing SALT deducations would mean less money available for other asks.
“There are a lot of ingredients in the One Big, Beautiful Bill,” LaLota said when asked about the situation. “The energy tax credits are important to many members like me.”
Other Republicans who signed the new statement included Andrew Garbarino of New York, Mark Amodei of Nevada, Don Bacon of Nebraska, Rob Bresnahan of Pennsylvania, Juan Ciscomani of Arizona, Gabe Evans of Colorado, Dave Joyce of Ohio, Young Kim of California, Mike Lawler of New York, Dan Newhouse of Washington and David Valadao of California.
Cuts ‘unworkable’
The House Budget Committee is scheduled to vote Friday on legislation combining the work of all committees participating in crafting the Republican’s budget reconciliation megabill. It could hit the floor next week.
But not only are House leaders open to amending the broader package before it hits the floor, but the Senate will then have its say.
Like the 12 lawmakers, clean energy developers and their lobbyists were pushing the same three points in a last-ditch push to reverse IRA tax credit cuts.
Prominent solar energy industry officials told reporters prior to meetings with 21 congressional offices in the House and Senate on Wednesday that the IRA cuts were “unworkable” in their current form.
“We have come to give these CEOs expertise on why that opening salvo is sort of unworkable from a financial and business perspective,” said Abigail Ross Hopper, head of the Solar Energy Industries Association.
That reflects a firm belief from the solar industry that the Ways and Means text is only a starting point for negotiations and that Republicans who generally support of tax credits will come to the rescue.
“I think a number of Republicans have significant insight into how our companies are working, and why certainty really matters for us,” Hopper said. “There’s absolutely people in that room that understand the problems we have with it.”
Rep. Vern Buchanan (R-Fla.), who sits on Ways and Means, said he was meeting with energy advocates. And although he voted for the proposal, Buchanan suggested he understood the pleas of businesses who “do keep our energy costs down.”
“I think obviously they’d like to get more done,” he said. “But we got some things done. I think we’re in the first quarter.”
He added: “I told them, look, we still got the Senate. They are going to make changes. We’re not done till we’re done.”
Indeed, Sen. Thom Tillis of North Carolina, one of four Senate Republicans who expressed interest in keeping some clean energy tax credits, said he expects to make significant changes to the House’s proposed cuts.
“I don’t think there are any [IRA cuts], or I can’t think of many, that we would take just word-for-word, as is, but it’s a good foundation to build on,” Tillis said.
Another Ways and Means member, Rep. Blake Moore (R-Utah) thought the panel’s text struck a fair balance that’s illustrative of where the House conference is on the whole. Many conservatives are demanding a full IRA repeal.
“I don’t know how we do anything different than what we just did,” he said. “I could be blindsided but I think we found a nice sweet spot.”
Members of the solar industry were particularly disturbed by strict foreign entity of concern restrictions slapped on carbon neutral and manufacturing credits. The restrictions would apply to mineral supply chains dominated by China.
“This is complete death,” said Sandhya Ganapathy, CEO of EDP Renewables North America. “If a project doesn’t qualify because it uses any equipment, which includes subcomponents and minerals, that have been extracted or processed in any part of the world, then that is the death of a credit right there.”
Members of the solar and geothermal industries brought up significant concerns with language that would phase out IRA credits depending on when the projects “are placed in service,” rather than when they start construction.
Fifty members of the geothermal industry met with over 110 congressional offices this week to advocate adjustments to the sunset language, among other priorities.
Electric vehicles
Hit hardest by the GOP tax proposal was the electric vehicle industry. Lobbyists have also been telling lawmakers that cutting the EV consumer tax credit could upend the future of the U.S. auto industry.
“That future demand for EVs around the world is going to be served by somebody, but if this bill passes as drafted it’s not going to be served by the U.S.,” said Albert Gore III, executive director of the Zero Emissions Transportation Association.
The Inflation Reduction Act set some limits on the amount of foreign-made battery components and foreign-sourced minerals like lithium and graphite to address supply chain concerns. Since the law took effect, companies have announced hundreds of billions to build and develop mines, refining plants, battery factories and other facilities.
“Batteries are going to be an enormous part of the global economy from now on,” Gore said. “This is an inflection point where the U.S. needs to figure out if it wants to participate.”
Reporters Andres Picon and Mike Lee contributed.
