The Republicans Pushing Trump to Save Biden’s Clean Energy Tax Credits

Business


A growing group of Republicans and business leaders is rallying behind an unlikely cause. They want to protect Biden-era tax credits for wind, solar and other clean energy.

President Trump has made dismantling federal efforts to address climate change a signature part of his agenda, eliminating environmental regulations, withholding congressionally approved funding, firing workers, halting permitting for wind energy developments and fast-tracking fossil fuel projects.

But the clean energy tax credits, which were signed into law by President Joseph R. Biden Jr. in 2022 as part of the Inflation Reduction Act, have helped spur a boom in manufacturing investment in the United States, especially in Republican districts.

Now, as Mr. Trump pushes Congress to slash federal spending to pay for broad tax cuts, some House Republicans from districts that got billions of dollars in investment from the tax credits have begun a campaign to keep them.

The Republicans are making the case that supporting renewable energy is squarely in line with Mr. Trump’s “energy dominance” agenda, despite the president’s rallying against what he calls the “green new scam.”

Last week, a group of 21 House Republicans wrote a letter to Representative Jason Smith of Missouri, the chairman of the Ways and Means Committee, asking him to preserve the credits. And in recent weeks, several groups of conservative environmentalists and business leaders have traveled to Capitol Hill to lobby members of Congress on the issue.

“To meet President Trump’s campaign promises of bringing back manufacturing and taking energy production at home seriously, we need to look at an all-the-above approach to these things,” Representative Andrew Garbarino of New York, who organized the letter, said in an interview. “These credits have been helping do that.”

President Trump has not specifically said which if any of the credits he wants to eliminate, but he regularly talks about repealing the Inflation Reduction Act. The White House declined a request for comment.

The credits, which offer financial incentives to companies producing renewable power and sustainable aviation fuel, making components for clean technology and working to pull carbon dioxide from the atmosphere, have helped push billions of dollars into domestic factory construction in recent years. The United States recorded more than $315 billion in clean energy investments last year, according to the International Energy Agency.

About 80 percent of the investments tied to the bill have gone to Republican congressional districts, according to an analysis by Atlas Public Policy, a research firm. They include battery plants across the Southeast, a lithium mine in Nevada and wind farms in Texas.

Nevertheless, Mr. Trump has said he wants to dismantle the Inflation Reduction Act, and many Republicans in Congress support eliminating all incentives for clean energy.

As Congress works to pass a major fiscal package, the showdown is highlighting the complicated politics and sometimes unusual alliances of the clean energy revolution.

Mr. Garbarino is among the many House Republicans who have been at the receiving end of an extensive lobbying push in recent months.

In February, the Solar Energy Industries Association, a trade group, organized a lobbying day in Washington, bringing representatives from more than 160 energy companies to town.

After hosting a breakfast at the Capitol Hill Club, a social club for Republicans, the renewable industry advocates fanned out to congressional buildings wearing stickers that read “American Energy Dominance” and featured an image of solar panels.

Over the course of the day, the solar group and its allies met with staff from more than 60 congressional offices, including 10 members of Congress, and delivered letters supporting the tax credits that were signed by more than 1,850 companies.

Last week, Citizens’ Climate Lobby, a nonprofit group, held two days of events on Capitol Hill. After a day of preparations and training at a nearby Holiday Inn, dozens of the group’s staff and volunteers met with congressional staff to talk up the merits of the tax credits.

Then, after a full day of meetings, the group held a reception at Barrel, a local bar, where three Republican members of Congress — Bruce Westerman of Arkansas, Mike Lawler of New York and Mariannette Miller-Meeks of Iowa — stopped by to receive the group’s “conservative climate award.”

Energy companies have also hired prominent Republican lobbyists in recent months, with some asking for help preserving the tax credits. And even some fossil fuel companies — including Occidental Petroleum, which has a growing carbon capture business — have come out in support of the tax credits.

It is too early to know whether the lobbying efforts will matter. But with Republicans holding a razor-thin margin in the House, the letter from 21 members supporting the tax credits carries real weight.

“Anything more than five is enough mathematically that you could have a thumbs down on the floor,” said John Miller, an energy analyst at TD Cowen, an investment bank. “They’re trying to demonstrate in a very constructive way how these can be reconfigured within the context of energy dominance, which is helpful.”

Supporters of the tax credits argue that eliminating the incentives would harm consumers. The House Republicans’ letter claims that repealing the tax credits “would increase utility bills the very next day.”

A report from the Clean Energy Buyers Association, an industry trade group, found that repealing two of the tax credits “would raise average U.S. residential electricity prices by nearly 7 percent by 2026,” amounting to an annual increase of more than $110 for the average American residential customer.

And many members of Congress and business leaders are scrambling to protect projects that are already in the works. Companies plan large investments over long time horizons, and many are counting on the tax credits. Eliminating them overnight would be disruptive, supporters say, and would discourage other companies from investing in the United States.

“A lot of these members have billions and billions of dollars invested in their districts,” said Heather Reams, president of Citizens for Responsible Energy Solutions, a conservative environmental group that supports protecting the credits. “So we’re looking at the benefits these are bringing to the districts and saying, ‘The dollars and cents add up.’”

Mr. Garbarino, who does not have any major clean-energy projects in his district but is co-chair of the bipartisan Climate Solutions Caucus, said he was trying to appeal to his Republican colleagues to be selective in any changes to the incentives.

“Let’s not just say we’re going to repeal it because it was the I.R.A.,” he said. “That’s stupid.”

Seeking to distance the credits from the Inflation Reduction Act, Mr. Garbarino noted that most of the credits existed before Mr. Biden signed that law, which expanded their scope.

“Don’t throw the baby out with the bathwater,” he said.

Mr. Garbarino said he had recently discussed the issue with Bill Gates, who is resetting his climate spending to focus on clean energy investments.

“These credits are helping him,” Mr. Garbarino said. “There’s a lot of private investment that these credits are helping. They’re helping with that innovation. They’re helping with bringing companies from outside the U.S. into the U.S. for investment here.”

Mr. Garbarino was a vocal supporter of the tax credits even before Mr. Trump won the election last year. In August, he led 18 House Republicans in sending a letter to Speaker Mike Johnson that called a full repeal of the law “a worst-case scenario.”

Since then, the campaign to protect the credits has gathered momentum. In January, several Republican House members defended them during testimony before the Ways and Means Committee.

“While the bulk of the I.R.A. is damaging policy, we must not neglect the sectorwide energy tax provisions that manufacturers and job creators rely on in my district and around the country,” said Representative John James of Michigan.

As Republicans and business leaders fight to save the tax credits, they have adopted Mr. Trump’s rhetoric. Gone is any mention of climate change or the environment. Instead, the focus is on an “all of the above” energy strategy to address soaring electricity demand and issues like affordability and domestic production.

“Republicans are not talking about climate or emissions in a significant way,” Ms. Reams said. “We’re talking about energy dominance. We’re talking about reliability, affordability, domestically produced energy and not enriching China or hostile nations.”

“It’s just using the language that’s going to break through, both in the White House and in the Republican Congress,” she added. “The messaging matters.”

But some are skeptical that if a spending package comes to a vote and the clean energy tax credits are not protected, House Republicans will vote against their own party.

“I really struggle to believe that if we get all the way to the point of a floor vote on a full reconciliation bill in the House, is anyone really going to step forward and take all that heat from Trump, all that heat from the rest of the party, and vote no?” said Mr. Miller, the analyst. “That’s pretty hard.”



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