The Senate appears close to approving its version of the Republican tax cut, energy and national security megabill early Tuesday morning after more than 20 hours of debate and procedural votes.
The bill retains the strict rollback of renewable energy tax credits last modified by the Democrats’ 2022 Inflation Reduction Act. There’s also a new excise tax on wind and solar projects.
Republican amendments to modify those provisions did not come up and Democratic ones failed. It’s now unclear whether leaders will make any changes in a broader amendment before final passage.
“We’re close,” said Senate Majority Leader John Thune (R-S.D.) earlier Tuesday as he worked to secure support from Sen. Lisa Murkowski (R-Alaska) on a host of issues, including energy credits.
The final Senate bill would cut off climate law incentives for wind and solar that aren’t “placed in service” — plugged into the grid — by the end of 2027. It’s language the industry and its allies on Capitol Hill lobbied hard to avoid.
The bill also has a new tax, added in recent days, against wind and solar projects that include materials from foreign entities of concern, such as China. Critics and analysts said it could raise electricity prices.
“If this passes, it is a death sentence for the wind and solar industries,” said Senate Finance Committee ranking member Ron Wyden (D-Ore.), defending one of several Democratic amendments against the GOP’s tax credit plans.
Senate Energy and Natural Resources Chair Mike Lee (R-Utah) shot back at Wyden, “We can and do reduce energy prices by increasing the development of our vast energy natural resources,” touting megabill pro-fossil-fuel provisions.
Beyond the tax credits, the legislation would claw back Inflation Reduction Act grants, mandate more onshore and offshore drilling, zero out penalties for fuel economy standards and delay the fee on methane leaks.
The megabill would also accelerate National Environmental Policy Act reviews for companies that pay a fee. Other permitting provisions ended up on the cutting room floor.
Renewable energy amendment
Murkowski joined Iowa Republican Sens. Joni Ernst and Chuck Grassley on an amendment Monday to ease the phaseout of renewable energy credits and scrap the new excise tax. It didn’t get a vote.
Grassley said amendment backers were looking to offsets to secure a simple majority roll call. “I don’t think we can get that done this quick,” he told reporters.
Sen. John Curtis (R-Utah) said he did not know the origin of the new tax but called the language “sloppy.” He pushed for a separate amendment to give the administration more power to implement it.
The Senate megabill is more lenient with other energy sources. It keeps credits for nuclear, hydropower and geothermal projects that start construction by 2033.
Lawmakers also moved to extend incentives for hydrogen production to 2028, and they kept the practice of “transferability,” which allows project sponsors to transfer credits to a third party.
Lee pushed for an amendment early Tuesday morning to “complete the circle of repeal” against the Inflation Reduction Act. He wanted the Senate bill to resemble the House version. The amendment failed 21-79.
On Monday Rep. Chip Roy (R-Texas), another foe of the climate law incentives, wrote on X: “We’d be in a much better spot if Republican Senators (applying for K St) showed half as much passion for tackling $37 trillion in debt and inflation as they do for preserving Biden’s green subsidies.”
The Senate did pass an amendment — 99-1 — to remove a provision supported by Senate Commerce Chair Ted Cruz (R-Texas) that would prevent states from implementing their own laws affecting artificial intelligence.
‘One way or another’
The reason Senate debate is taking so long is because leaders were working behind the scenes to weigh potential modifications to the legislation and secure enough support.
House leaders are considering bringing lawmakers back to Washington from recess in an effort to meet President Donald Trump’s Independence Day deadline.
Speaker Mike Johnson (R-La.) on Monday was not sure whether the House could pass the Senate version but said Republicans would pass a megabill “one way or another.”
“I have prevailed upon my Senate colleagues to please, please, please get as close to the House product as possible,” the speaker told reporters.
The groups Climate Power and the League of Conservation Voters launched a $500,000 advertising campaign against the bill, saying it would “cut our energy production, creating an energy shortage and increase electricity rates for everyone.”
The spots target vulnerable Republicans like Reps. Juan Ciscomani of Arizona, Mariannette Miller Meeks of Iowa and Brian Fitzpatrick of Pennsylvania. All have made some effort to protect some IRA credits.
Tesla CEO Elon Musk repeated his opposition to the bill and threatened to support challengers to Republicans who vote for it, saying on X that Republican supporters “will lose their primary next year if it is the last thing I do on this Earth.” Energy issues have been among his concerns.
Trump shot back on Truth Social, writing that, “Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa.”
