When Speaker Kevin McCarthy released a Republican plan last week to raise the debt ceiling in exchange for spending cuts, he promised to eliminate billions of dollars in “green giveaways” that President Biden had signed into law last year as part of his landmark climate change and tax measure.
Republicans lawmakers who expect funding from that law to benefit their districts — including through tax credits for biofuels, solar, nuclear energy and technology to capture carbon dioxide emissions from power plants — balked. And late Tuesday night, threatening to withhold their votes for the legislation, they succeeded in getting Mr. McCarthy to change the bill.
The legislation would still repeal the vast majority of the Inflation Reduction Act, including tax credits to boost domestic sourcing of electric vehicles; renewable energy production including wind and solar development in low-income communities; and measures to encourage the construction of energy efficient buildings.
But after Mr. McCarthy met Tuesday with corn-belt lawmakers from Minnesota, Iowa and Missouri, he acceded to changes in a few key areas. A revised version released Wednesday would allow extended tax credits for biofuels and sustainable aviation fuel for those in binding contracts or locked into investments before April 19.
Mr. McCarthy also agreed to scrap a provision that would have eliminated tax breaks for companies that use carbon capture technology to fight climate change.
The Inflation Reduction Act offers incentives to speed up the adoption of carbon capture technology by significantly raising existing federal tax credits for electric utilities that use the technology. That could translate into hundreds of thousands of dollars per year for major power companies.
That’s key because in the coming weeks, the Environmental Protection Agency is expected to propose strict new limits on emissions from the nation’s 3,400 coal- and natural gas-burning power plants, based in part on the idea that many plant owners could slash their emissions deeply by capturing carbon dioxide from smokestacks and burying it underground.
The White House has estimated those and other investments, along with funding from a law signed last year to boost the competitiveness of the semiconductor supply chain, has created more than 100,000 so-called green jobs across the United States. The Inflation Reduction Act alone has led to about $150 billion in clean energy investments.
By 2030, the White House estimates the act will lead to the installation of 950 million solar panels, 120,000 wind turbines, and 2,300 battery facilities. According to Rewiring America, a nonprofit group aimed at boosting renewable energy, at least 15 Republican House districts from Arizona to South Carolina have experienced major investments from companies building battery manufacturing plants, lithium processing factories and other facilities since the climate law was signed.
It remains unclear whether the revised Republican debt ceiling measure can win enough support to pass the House. Even if it does, the measure has no chance of approval in the Democratic-led Senate.
Mr. Biden has been calling on Republicans for months to raise the debt ceiling without conditions to avoid a catastrophic default that could come as soon as this summer, and last week blasted Republicans for trying to repeal clean energy investments.
“Imagine taking all these clean-energy jobs away from working-class folks all across America,” Mr. Biden said.
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