Top Democrats frustrated with the Inflation Reduction Act’s muted political payoff say their next major climate and energy bill needs to deliver tangible benefits to voters far faster than last time.
Senate Democrats focused on energy issues gathered Thursday for a discussion with advocates to reinforce a core midterm message: Republican policies have driven up energy prices for Americans.
But Sen. Brian Schatz (D-Hawaii) said his focus was already on what Democrats should do differently the next time they control Washington.
“I think we just need to think about speed to market on government services, on government subsidies, because so many of the [IRA] programs just kind of lumbered their way through various systems,” Schatz said. “They just weren’t deployed quickly enough to have the consumer impact, have the economic impact, and therefore the political impact, that we had hoped for.”
Schatz, who is widely expected to move into the Senate Democratic whip role after the midterms, argued that the party boxed itself in by trying to satisfy too many interests during the bill’s drafting.
The result, he said, was a “labyrinth” of programs and incentives that proved confusing even to the lawmakers who wrote them — let alone the voters Democrats hoped would feel their benefits.
“What I don’t want to do is satisfy all of our stakeholders by making a bill completely unworkable,” Schatz said. “It’s workable in terms of getting 51 votes for something, but then suddenly you’re left with something that’s kind of almost impossible to administer.”
Democrats passed the IRA in 2022 using the budget reconciliation process, which only requires a simple majority in the Senate. Republicans used the same process for their One Big Beautiful Bill Act.
Senate Energy and Natural Resources ranking member Martin Heinrich (D-N.M.), who hosted the roundtable, pointed to the $20 billion Greenhouse Gas Reduction Fund as a cautionary tale. The Biden-era program was designed to provide low-interest loans for clean energy projects in low-income communities.
But awards from the program were not obligated to recipients until near the end of the Biden administration. The Trump administration then froze the fund, calling it the centerpiece of the former administration’s efforts to “throw gold bars off the Titanic.”
Grants from the “Solar for All” program — a component of the GGRF — were terminated last summer after recipients had drawn down just 1 percent of the available funding.
That outcome, Heinrich argued, illustrates that sound policy can fail if it does not have enough time to take effect — particularly when Republicans have shown a willingness to swiftly reverse Democratic initiatives.
“I think we should just view all policy through the lens of: What if we don’t have a second administration to carry it out to the point where people see the job benefits so clearly that they’re not going to deviate from it?” Heinrich said.
With midterm elections looming and the end of the Trump presidency still further out, Democrats said they are beginning to focus on “extremely simple, executable” policy mechanisms they could pursue.
Schatz floated the idea of direct cash incentives for buying heat pumps or making homes more energy efficient. Democrats also pointed broadly to energy tax credits and other tax code changes as policies that can deliver rapid, visible benefits.
Outside advocates are thinking along similar lines. Yogin Kothari, a partner at Mission Strategies who works on domestic solar manufacturing, said one lesson from the Republicans’ One Big Beautiful Bill Act was that the 45X advanced manufacturing credit largely survived, albeit with new foreign entity restrictions.
“When you’re thinking about IRA 2.0, there’s a conversation that probably needs to happen about how we lead with manufacturing,” Kothari said.
“A lot of these communities are dealing with the China shock, and that’s not going to change anytime soon. As a country, we have to grapple with whether we want to rely on domestic supply chains when deploying advanced energy technologies like next-generation solar, nuclear, batteries and geothermal.”
Kothari added, “It’s important for Democrats to think about climate through a different frame.”
Adrian Deveny, a former energy staffer to Senate Minority Leader Chuck Schumer (D-N.Y.) and founder of the group Climate Vision, said any future package would need to combine immediate relief for ratepayers with longer-term investments to improve grid efficiency.
“New transmission lines are an important component, but they have to be paired with immediate relief,” Deveny said. “You have to do both.”
House Minority Leader Hakeem Jeffries (D-N.Y.) told POLITICO’s E&E News that Democrats would move to reestablish energy tax credits if they regain control of the House in November.
“One of the things we’ll need to do as Democrats in taking back the House is re-incorporate those clean energy tax credits back into law,” Jeffries said. “That will be a priority.”
Some moderate Republicans have already signaled support. Last month, Rep. Brian Fitzpatrick (R-Pa.) said he is working on bipartisan legislation to revive the credits, citing concerns that building trades are “losing a lot of jobs.”
“The big beautiful bill decimated a lot of the credits,” Fitzpatrick said. “We’re bringing them back.”
Schatz, however, cautioned against relying too heavily on subsidies alone. Democrats, he said, should also focus on reducing the underlying cost of clean energy products.
“I do worry about subsidy being the only solution set,” Schatz said, “because you’re not, in the end, reducing the retail cost of something.”
