12-05-2025
Congress whacks an energy program — and splits the GOP
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A Department of Energy program beloved by the tech right might become the latest victim of the Trump administration's war on 'woke.'
As part of the House Energy & Commerce Committee's reconciliation budget text released late Sunday night, the majority of the hundreds of billions of dollars authorized for the Department of Energy's Loan Programs Office would be rescinded.
The LPO was pumping hundreds of millions, and in some cases billions, of dollars into speculative and future-tech projects under the administration of President Joe Biden, funded by the Inflation Reduction Act. While many of the projects were part of a liberal-friendly clean energy push, the LPO also funded bipartisan or even somewhat GOP-coded projects like the restarting of the Palisades nuclear plant in Covert, Michigan.
Its potential gutting prompted immediate anguish from one conservative wonk, who compared the Republican-controlled Congress to an environmental group: 'Who needs the NRDC to wreck nuclear when we have House Energy and Commerce?', wrote Emmet Penney, a pro-nuclear energy scholar at the right-leaning Foundation for American Innovation, on X.
In one sense it's obvious why the LPO would be an easy target for Washington Republicans. The office, created in 2005, went largely inactive for a decade starting in 2011 after Republicans made a massive national story out of its investment in the failed solar panel firm Solyndra, which defaulted on a $535 million LPO loan. When Congress revived it and boosted its lending authority to more than $400 billion, the money went largely to fund Biden's clean-energy goals.
Given President Donald Trump's longtime derision of clean energy and his desire to boost American oil, gas and coal, it's no surprise LPO would be on the chopping block. DOGE has already cut 60 percent of the LPO's staff.
But politically it's not as simple as that. In the current energy-hungry tech environment, this is actually an issue that splits Republicans. A growing coalition on the right and center-right has been vocal in its support for the program — saying it's exactly the kind of risk-taking venture the U.S. government should be involved in if it really wants to usher in the shiny, sci-fi future promised by prominent figures on the right like Elon Musk.
Penney, as part of a think tank joint-venture 'Techno-Industrial Policy Playbook' published last week, wrote a proposal for 'Advancing Nuclear with the Loan Programs Office' which argued that 'If America wants to win, it needs to invest in radically expanding its nuclear fleet.'
He lays out a conservative-friendly case that the LPO could revitalize American energy by re-opening currently shuttered nuclear plants, as well as revitalizing the heartland by converting coal plants to nuclear and creating a pipeline to commercialize prototype nuclear systems. (Earlier this year Secretary of Energy Chris Wright played up his approval of the second and third disbursements from the LPO to Michigan's Palisades plant, launched under the Biden administration last year.)
This is more than just a policy disagreement over who, how, and where new sources of power should be funded — it's one about whether Republicans should take a stronger policy hand in directing the American state and economy.
'We have the nationalist developmental side [of the GOP], then we have the free marketers, and these people don't really know how to get along,' Penney told DFD. 'The institutional path dependency is towards the more traditional GOP stance, and we're now watching that play out with the politics of the LPO.'
In large part, this debate is over the role of government support in tech innovation — a policy very much under fire right now, but arguably the bedrock of the whole economy we live in. The internet, the moon landing, atomic energy — and the industries built on top of them — were all the product of government investment.
For a while during the Biden administration it seemed like Washington had found fresh bipartisan enthusiasm for such projects, most notably in the form of the CHIPS and Science Act, which authorized massive subsidies for semiconductor manufacturing and domestic research (although Congressional spending often fell short, especially in the case of the research component). But the all-out war waged by Trump, Office of Management and Budget Director Russell Vought and Elon Musk's DOGE on non-defense spending has caught that bill and an endless list of similar federal programs in its crosshairs, with Trump even calling in his address to a joint session of Congress in March to end CHIPS and Science.
That's left voices on the right like Penney's — and their unexpected allies on the left and center, like The American Prospect's Ryan Cooper, who called the LPO one of the 'hidden gems of American government' in lamenting its planned elimination — largely out in the cold. Sen. Todd Young (R-Ind.), one of CHIPS and Science's key architects, petitioned the Trump administration in February to save American research funding, and last week re-introduced a bipartisan 2021 bill that would restore much of it, but has failed to gain much traction.
'It feels like we're at a time of reprisal,' Penney said, making a case that the Trump administration's aggressive cost-cutting could threaten future innovation.
'This really hurts nuclear, but I also think that it might even threaten the bipartisan consensus … the base of Democratic support for nuclear is premised on faith in the federal government, and when you deteriorate that faith, it will poison the water on Democratic support for nuclear.'
It's unclear what the LPO's ultimate fate might be — the Trump administration's own draft budget left it largely untouched, while Trump issued an executive order on Friday directing a quadrupling of the U.S.' nuclear power capacity, something that seems unlikely without the LPO given the extent to which it allows government to take on much of the inherent risk in investing in nuclear.
So far, however, the burgeoning tech right has hoped Trump's alliance with prominent tech figures, stated commitment to revitalizing American industry, and thirst to dominate China would win out over his revanchist obsession with tearing down the modern administrative state.
But if the steamroller approach the Trump administration and the GOP-controlled Congress have taken to experimental programs like the LPO is any indicator, they might find themselves in the same boat as other parts of his coalition like pro-Palestinian activists, strict pro-life Catholics, and even right-leaning immigrants, burned on key issues after lending Trump their political capital.
an ai moratorium?
Congress finally has a big idea for AI regulations: It wants to stop states from issuing any at all, for a decade.
Last night, Republicans added a surprise piece of language to the budget reconciliation bill that would put a 10-year moratorium on state and local AI laws. POLITICO's Mohar Chatterjee and Anthony Adragna reported for Pro subscribers on how the move by the House Energy & Commerce Committee would re-set the terms of AI regulation for the rest of the country.
It's far from clear whether this is politically viable, or even legal. But it comes as tech giants are pushing Washington in the same direction.
POLITICO's Brendan Bordelon and Chase DiFeliciantonio reported today on a campaign by companies including OpenAI, Meta, Google, IBM and venture capital firm Andreessen Horowitz to convince Congress to pass AI rules before the states — in particular California — do the same.
California lawmakers responded to the latest moves in Congress with harsh criticism. Democratic state Sen. Scott Wiener called it 'illegal and bad,' telling POLITICO's Sacramento tech reporter Tyler Katzenberger, 'This latest power play to try to broadly ban states from protecting the public — it's a gold rush,' adding, 'We need to say no.'
an eu envoy
The EU's tech chief Henna Virkkunen will visit the U.S. this week. POLITICO's Pieter Haeck reported for Pro subscribers on the visit, which will come as the Trump administration seems to be escalating its trade war with the European Union. A representative told Pieter that Virkkunen's agenda is 'still being finalized.'
Last Thursday Virkkunen said she spoke with Meta CEO Mark Zuckerberg about 'compliance' with the European Union's Digital Services Act and Digital Markets Act. The EU stuck Meta with a €200 million fine in April for violating the DMA.
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Stay in touch with the whole team: Mohar Chatterjee (mchatterjee@ Steve Heuser (sheuser@ Nate Robson (nrobson@ and Daniella Cheslow (dcheslow@
