House GOP takes ax to Democratic clean energy credits with debt ceiling proposal

Jeremy Beaman

April 19, 04:32 PM April 19, 04:32 PM

House Republicans proposed new debt ceiling legislation Wednesday that would repeal nearly a dozen clean energy subsidies recently authorized by the Democratic Inflation Reduction Act as a way to reduce federal spending.

The GOP proposal would cut or shrink numerous of the tax credits that President Joe Biden and Democrats in Congress signed off on in August to expand renewable energy technologies, reduce greenhouse gas emissions, and accelerate their climate change agenda, including the new tax credit for consumer purchases of used electric vehicles.

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Other tax credits that would be repealed include the law's zero-emission nuclear power credit and the new tax $7,500 hundred tax credit for light-duty electric vehicles purchased for commercial use.

The debt ceiling bill also includes elements of HR 1, the House Republican sweeping energy proposal that would increase domestic production of fossil fuels and ease permitting for mining.

"The Limit, Save, Grow Act will limit federal spending, save taxpayers trillions of dollars, grow our economy, and lift the debt limit into next year," House Speaker Kevin McCarthy (R-CA) said. "This legislation will make us less dependent on the whims of the Chinese Communist Party and curb high inflation, all without touching Social Security or Medicare — because no one is hurt more by inflation than seniors."

Republicans have argued the Inflation Reduction Act's tax credits strengthen the advantage of China, which dominates various industries that produce batteries, solar products, and their upstream supply chains.

The law included language designed to bring those industries home or enable their expansion in trade partner countries, although some Democrats, most notably the chief author, Sen. Joe Manchin (D-WV), have complained that the administration is implementing the law too liberally to achieve those goals.

The White House is blasting Republicans' effort to repeal Biden's signature achievement, flipping the script to say their proposal would favor China.

"Let's be clear what MAGA attacks on the Inflation Reduction Act would mean for American families," press secretary Karine Jean-Pierre said Tuesday. "Offshore tens of thousands of manufacturing jobs, including in districts many of these members actually represent."

The legislation unveiled Wednesday is McCarthy's first offer in talks with Biden to raise the federal debt ceiling. The limit must be raised by some time this summer or early fall to prevent the Treasury from defaulting on the debt, a prospect the Treasury has said would create massive economic turmoil. Biden has said that he won't negotiate with Republicans over raising the debt limit and has challenged the House GOP to produce a budget resolution to show their plans for taxing and spending.