House Republicans are barreling ahead with a proposal to raise the debt ceiling that would eliminate clean energy tax credits from the Inflation Reduction Act and enact their own partisan proposal to expand domestic energy production.
The “Limit, Save, Grow Act of 2023,” which Republicans intend to put on the House floor next week, is just the party’s opening bid in negotiations with Democrats and the Biden administration to extend the nation’s borrowing authority by mid-June.
It’s unclear, however, how much ground Republicans will ultimately be willing to cede as the deadline nears.
According to bill text unveiled Wednesday afternoon, the GOP plan would “repeal market distorting green tax credits” — or the myriad incentives for clean energy projects included in the Democrats’ signature climate legislation from the previous Congress.
The tax credits to be scrapped would include those to incentivize zero-emission technologies, including extensions of wind and solar credits, incentives for nuclear and hydrogen production, and installation of solar and wind facilities in low-income communities.
Republicans would also look to roll back changes established by the IRA for credits to entities that sequester carbon as well as a return for electric vehicle credits that many companies have already hit the cap of using.
In a floor speech announcing the plan in broad strokes, House Speaker Kevin McCarthy (R-Calif.) crowed that the bill would “end the green giveaways for companies that distort the market and waste taxpayer money,” citing a Goldman Sachs analysis from last month claiming that “ending green giveaways saves as much as $1.2 trillion.”
McCarthy and other GOP leaders had reportedly been reluctant to deal with the Inflation Reduction Act in their debt limit proposal, but were pressured Tuesday by conservative hard-liners to repeal the tax credits.
The bill also would, as expected, include H.R. 1, the “Lower Energy Costs Act,” in its entirety, which Republicans passed along party lines at the end of March.
It is designed, McCarthy said in his speech, to “restore American energy leadership, make it easier to build things that make us less dependent on China and bring jobs back to America. It also will help lift millions of Americans out of poverty.”
The party hopes including this bill in their debt limit proposal will bring Democrats to the table to negotiate permitting overhaul legislation. However, there is sharp disagreement about whether the best path to speeding up energy projects is through empowering the Federal Energy Regulatory Commission — as Democrats largely prefer — or making substantial changes to the National Environmental Policy Act — as favored by Republicans and reflected in H.R. 1.
The GOP is, as well, offering up H.R. 277, the “Regulations From the Executive in Need of Scrutiny Act,” which would require that major agency rules be approved by Congress rather than through executive orders. Progressives have been urging President Joe Biden to use his authority to enact sweeping climate policy in a divided Congress to build on the historic investments of the Inflation Reduction Act.
In all, the Republican plan would, McCarthy stated, “responsibly raise the debt limit into next year and provide more than $4.5 trillion in savings to the American taxpayer.”
It would find those savings, he said, by returning discretionary spending to fiscal year 2022 levels and then limit the growth of spending to 1 percent per year.
“These spending limits are not draconian,” McCarthy said. “They’re responsible.”
Few, if any, Democrats are expected to support the proposal.
Reporter Jeremy Dillon contributed.
