Trump's tax overhaul hits GOP turbulence over Biden-era green incentives
FIRST ON FOX: The House GOP's standoff over the former Biden administration's green energy subsides is colliding with Republicans' plans for a massive bill advancing President Donald Trump's agenda.
Thirty-eight House Republicans are writing to Ways & Means Chairman Jason Smith, R-Mo., the chamber's top tax writer, urging a full repeal of the Inflation Reduction Act (IRA) in the coming budget reconciliation bill.
"We are deeply concerned that President Trump's commitment to restoring American energy dominance and ending what he calls the 'green new scam' is being undermined by parochial interests and short-sighted political calculations," the lawmakers wrote.
They argued the IRA subsidies would cost American taxpayers roughly $1 trillion over the next decade.
"The IRA contains eight major energy subsidies, each of which burdens taxpayers, inflates energy costs, and threatens the reliability of our power grid. Each of these subsidies props up unreliable energy sources while displacing dependable, proven energy like coal and natural gas," the letter said.
The lawmakers then took direct aim at fellow Republicans who are pushing for some of the credits to remain intact.
"Republicans ran—and won—on a promise to completely dismantle the IRA and end the left's green welfare agenda. The first chapter of our 2024 platform reaffirms our commitment to 'terminating the Socialist Green New Deal.' Despite our previously unified stance, some Members of our conference now feel compelled to defend wind and biofuel credits, advocate for carbon capture and hydrogen subsidies, or protect solar and electric vehicle giveaways," the letter said. "Keeping even one of these subsidies opens the door to retaining all eight."
"How do we retain some of these credits and not operate in hypocrisy? The longstanding Republican position has been to allow the market to determine energy production. 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."
Republicans are working on a massive piece of legislation advancing Trump's agenda on taxes, border security, national defense and energy, while also raising the debt limit.
The budget reconciliation process allows them to do that by lowering the Senate's threshold for passage from 60 votes to 51, thereby allowing the party controlling Congress and the White House to pass sweeping legislation while sidelining the opposition, in this case Democrats.
Conservative fiscal hawks successfully got House GOP leaders to agree that the trillions of dollars of new spending in the bill – primarily for Trump's tax policies – must be offset by at least $1.5 trillion in federal funding cuts.
Former President Joe Biden's IRA subsidies have been a significant flash point in that fight.
In March, 21 House Republicans signed a letter urging their colleagues to preserve the green energy tax credit.
"Countless American companies are utilizing sector-wide energy tax credits – many of which have enjoyed broad support in Congress – to make major investments in domestic energy production and infrastructure for traditional and renewable energy sources alike," they wrote.
That letter pointed out that investments have already been made in American entities with the understanding that those subsidies would have a 10-year window.
"These timelines have been relied upon when it comes to capital allocation, planning, and project commitments, all of which would be jeopardized by premature credit phase outs or additional restrictive mechanisms such as limiting transferability," it said.
They argued that changing that now could lead to rising energy costs for American families.
The anti-IRA Republicans, however, said in their letter that the U.S.' growing green energy sector was the product of government handouts rather than genuine sustainable growth.
"Leaving IRA subsidies intact will actively undermine America's return to energy dominance and national security," they said. "They are the result of government subsidies that distort the U.S. energy sector, displace reliable coal and natural gas and the domestic jobs they produce, and put the stability and independence of our electric grid in jeopardy."
Meanwhile, House GOP leaders like House Speaker Mike Johnson, R-La., have made clear they have issues with the wider bill, but share concerns about ending measures in use under the current administration and risking political blowback in GOP districts that have seen investments by entities that have benefited from the subsidies.
Fox News Digital reached out to the Ways & Means Committee for comment but did not hear back by press time.
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