Energy highlights from the House GOP debt ceiling bill

By Jeremy Dillon | 04/20/2023 06:37 AM EDT

Republicans plan to vote next week on legislation to enact Republican energy priorities and repeal parts of the Inflation Reduction Act.

House Speaker Kevin McCarthy is pictured in conversation.

House Speaker Kevin McCarthy (R-Calif.) at the Capitol this week. Francis Chung/POLITICO

House Republican leaders unveiled their initial bid to raise the debt ceiling Wednesday with language to undercut President Joe Biden’s signature climate law.

After pressure from the right, Republican leaders agreed to target the Inflation Reduction Act’s clean energy and manufacturing tax incentives. In total, the Republican strategy would repeal or revisit 24 tax incentives that were established or tweaked by the law.

House Speaker Kevin McCarthy (R-Calif.) and his team did not appear keen earlier this week to scrap the credits, which are poised to create jobs in GOP districts. But the party’s right flank insisted on going after Biden’s signature accomplishment.


“This is a package that we’ve been working on for a long time with everybody in our conference focused on addressing the debt ceiling, but also addressing the problem that caused us to hit the debt ceiling at the same time,” Majority Steve Scalise (R-La.) told reporters.

The bill would extend the government’s borrowing authority into March 2024 or an extra $1.5 trillion — whichever occurs first. House Republicans are eyeing a vote next week. They hope that gets Senate Democrats and the White House to negotiate.

But Biden, during remarks in Maryland, ridiculed the House GOP’s opening bid, which would also mandate across-the-board spending cuts.

“That’s the MAGA economic agenda: spending cuts for working and middle-class folks,” Biden said. “It’s not about fiscal discipline; it’s about cutting benefits for folks that they don’t seem to care much about.”

Gutting the IRA

Chief among the House Republicans’ plans is a sweeping broadside against clean energy incentives from the Inflation Reduction Act.

The GOP bill would repeal new emissions credits for nuclear energy, renewable energy manufacturing, domestic sourcing of electric vehicle components, hydrogen production and extensions of the wind and solar production credits.

In sum, anything new passed by the Inflation Reduction Act would be repealed by the Republican debt plan, even as the incentives have driven historic clean energy-related investment in red and rural districts.

A report from Goldman Sachs, which implied the deployment of the tax credits could cost three times as previously estimated, even though they are expected to unleash trillions in investment, helped prod the right into action.

“If I were in charge, I would repeal the whole awful piece of legislation,” said Freedom Caucus Chair Scott Perry (R-Pa.) earlier this week. “But as a matter of fact, in the debt ceiling, what we’re talking about is, for sure, the tax credits.”

The House Ways and Means Committee held a hearing Wednesday, as McCarthy was preparing to speak on the floor to announce the House GOP plan, making the case against green credits as giveaways to corporations and China (E&E Daily, April 19).

The debt ceiling bill seeks to reestablish the framework for energy credits that existed before the Inflation Reduction Act. That includes a return to sunset provisions for investment tax credits used by solar energy and benefits for offshore wind and carbon capture.

“Firms in China and elsewhere will grow at our expense if Speaker McCarthy gets his way. Even Republican priorities like carbon capture and biodiesel would suffer,” said Senate Finance Chair Ron Wyden (D-Ore.).

The debt plan would also reestablish the previous framework for electric vehicles — set at $7,500 per vehicle with a cap of 200,000 vehicles per company. Major automakers have already hit that threshold.

“Republicans have been very clear … that we are truly for an all the above energy strategy, one that looks at affordability, one that looks at emissions reduction strategies,” said Rep. Garret Graves (R-La.). “But what [Democrats] did in that bill distorts markets beyond anything that is even remotely reasonable.”

Energy, permitting

Containing a laundry list of GOP energy policy priorities as well as an opening bid in the broader Capitol Hill negotiations on permitting reform, H.R. 1 emerged as a policy unifier for the Republican conference. It represents the GOP’s major policy initiative heading into the 2024 election. That’s why Republicans quickly moved to include the entire bill in the debt ceiling offering.

The White House threatened to veto the bill should it make it to Biden’s desk, while Senate Majority Leader Chuck Schumer (D-N.Y.) declared the legislation “dead on arrival” in the Senate.

“This proposal repeals historic climate progress we made with the Inflation Reduction Act — it’s nothing more than a grab bag of Big Oil giveaways and loopholes that endanger Americans’ health and ensure energy costs keep rising,” said House Energy and Commerce ranking member Frank Pallone (D-N.J.).

Key provisions include repeal of the Inflation Reduction Act’s methane fee for oil and gas operators, cutting back environmental justice funding, slashing efficiency grants and rebates and eliminating $27 billion for a clean energy bank that Republicans have dubbed a “green energy slush fund.”

The legislation draws heavily from Graves’ “BUILDER Act,” which is meant to streamline the federal government’s environment review process by codifying Trump-era permitting changes and instituting strict deadlines for environmental reviews and judicial complaints.


After Republicans have succeeded in approving resolutions against administration rules, GOP lawmakers want to expand the role of Capitol Hill in reviewing any new regulations adopted by the executive branch as part of the deal.

The debt ceiling strategy calls for inclusion of the “REINS Act,” a perennial conservative bill that would give Congress the ability to approve or deny major regulations.

Such authority has the ability to undercut a series of climate inspired regulations underway at EPA and Interior Department that would look to introduce more climate considerations into the energy and transportation mix.

“We would prevent President Biden’s executive overreach to spend money outside of the normal process, which President Biden has abused to the tune of $1.5 trillion in unilateral executive actions,” McCarthy argued during remarks.

Spending cuts

The House GOP plan would roll back agency funding levels to those enacted in fiscal 2022. Future spending increases would be limited to no more than one percent annually.

McCarthy challenged Democrats to embrace the changes and dismissed calls the funding cuts would decimate federal agencies.

“These are the same levels we had just four months ago,” McCarthy said. “I didn’t hear a single Democrat complain about that level of spending. These spending limits are not draconian, they’re responsible.”

For the Department of Energy, the rollback would amount to cutting $1.5 billion from fiscal 2023 levels. DOE currently operates on a total budget of $45.8 billion.

For the Interior Department, the funding cut would equal a budget rollback of nearly $800 million. The department operated on a funding level of $16.9 billion in discretionary funding in fiscal 2023.

For EPA, the cut would equal a reduction of $500 million from the fiscal 2023 budget of $10.1 billion.

“There is nothing fiscally disciplined about trying to leverage the full faith and credit of the United States to force indiscriminate cuts in the annual spending process — a process under which we funded critical programs with bipartisan support for both fiscal years last Congress,” said House Appropriations ranking member Rosa DeLauro (D-Conn.).

Reporters Nico Portuondo and Kelsey Brugger contributed.