Congressional Republicans are inching closer to determining exactly how many hundreds of billions of dollars worth of climate credits and other spending to scrap to pay for their tax, energy and security megabill.
As they streamed out of various planning meetings Thursday, key lawmakers suggested they are still a ways away from settling the specifics.
Indeed, leaders have moved away from holding markups before the Energy and Commerce and Ways and Means committees — panels that will have the most say over how far the GOP will repeal the 2022 climate law.
“We are discussing all of it,” said Rep. Brian Fitzpatrick (R-Pa.), a House Ways and Means Committee member known to support climate action, when asked about Inflation Reduction Act incentives.
“Everybody’s talking about the merits of them, and the opponents are letting their thoughts be known as well. So it’s a good conversation, but no decisions have been made.”
Republicans are working to pass their megabill through the budget reconciliation process, which allows the majority party to bypass the Senate filibuster on fiscal matters. A cornerstone will be an extension of the 2017 tax cuts.
Republicans are said to be eyeing $400 billion in savings by tweaking credits and limiting transferability, according to Punchbowl News, but things are in flux.
Members are also looking at phasing out certain clean energy tax breaks or implementing domestic sourcing requirements to generate some savings.
Letters keep coming
Moderates in both the House and Senate have sent letters to Ways and Means Chair Jason Smith (R-Mo.) in favor of being careful when moving to repeal or modify credits for renewable energy and other sources. Incentives for biofuels, carbon capture and hydrogen are popular.
On Thursday, 26 House Republican nuclear boosters, led by Rep. Dan Newhouse (R-Wash.), sent a letter pressing Smith to keep tax incentives in the IRA that benefit nuclear energy projects.
Signers included people who had yet to sign letters in favor of keeping parts of the IRA, including Appropriations Interior-Environment Subcommittee Chair Rep. Mike Simpson (R-Idaho) and Appropriations Energy-Water Subcommittee Chair Chuck Fleishcmann (R-Tenn.).
Rep. Andrew Garbarino (R-N.Y.), who helps lead the Climate Solutions Caucus, said about the pressure on Smith: “I’ve met with his committee staff. I’ve met with members about thoughts about how to save money with some of the credits without throwing them out completely.”
But also on Thursday, 38 conservatives — including Reps. Chip Roy (R-Texas) and Marjorie Taylor Greene (R-Ga.) — reiterated their desire to see the entire climate law repealed. They said doing so could amount to $1 trillion in savings.
“If every faction continues to defend their favored subsidies, we risk preserving the entire IRA because no clearly defined principle will dictate what is kept and what is culled,” they wrote.
Earlier in the week, a pair of GOP North Dakota lawmakers — Sen. Kevin Cramer and Rep. Julie Fedorchak — sent a letter to congressional leaders suggesting Republicans should favor nuclear, gas and carbon capture while phasing out benefits for wind and solar.
“We must evaluate each tax credit individually to assess its benefit to the American public,” they wrote, adding the U.S. tax code “continues to shower intermittent energy generators with incentives and resources” without considering their impact on the grid.
In response to the tug-of-war, Smith said, “I’m talking to every member of this Congress all the time.”
Bracewell’s Frank Maisano said the Republicans’ tight margins mean negotiations are likely to continue after leaders settle on initial text.
“There’s a way to go here so advocates on both sides can’t lose their mind over the first mark,” said Maisano.
Other climate spending
Concerning the Energy and Commerce Committee’s purview, savings are expected to come from Medicaid changes, but there’s also energy-related cash to be had.
The biggest energy-related pot is about $10 billion within the Department of Energy’s Loan Programs Office, according to an environmental advocate closely tracking funding streams who was granted anonymity to speak freely. The person noted, though, the Congressional Budget Office could change the score.
And there’s about $616 million in unobligated funds from a popular nuclear fuel supply chain program, as well as about $600 million for industrial demonstrations. There are some other buckets, too, but the numbers are smaller.
Another pot of money in E&C’s jurisdiction is about $500 million from EPA’s environmental block grants, the person said.
Even after the bill passes the House, senators may send it back with changes, noted Senate Environment and Public Works Chair Shelley Moore Capito (R-W.Va.).
“This is a balancing act,” Capito said. “Some of [the credits] have created a lot of jobs, and I think we need to be mindful of that.”
Senate Minority Leader Chuck Schumer (D-N.Y.) said Thursday that Democrats have been “working very closely” with energy companies in Republican-led districts benefiting from IRA investments to “put pressure on Republicans to not rescind the tax credits.”
Reporters Benjamin Guggenheim, Meredith Lee Hill and Nico Portuondo contributed.
