House Republican Support Grows For Keeping Clean Energy Tax Breaks

A growing number of House Republicans are urging the party to preserve the clean energy tax credits in Democrats’ climate law — and warning they may oppose the party’s budget bill if those incentives get axed.

In a letter shared exclusively with POLITICO, 21 House Republicans — whose districts have drawn billions in new investments because of the Inflation Reduction Act incentives — said developing clean energy was critical for the U.S. to meet President Donald Trump's goal of becoming “energy dominant.” And they threatened to resist their colleagues’ efforts to gut the law to help pay for a small fraction of the GOP’s multi-trillion-dollar tax-cut package.

“We have 20-plus members saying, ‘Don’t just think you can repeal these things and have our support,’” said Rep. Andrew Garbarino (R-N.Y.), who organized the letter.

The growing pushback against eliminating the IRA’s hundreds of billions of dollars in tax credits and other incentives — which have largely benefited GOP-controlled districts — will complicate efforts by House Republicans to slash federal outlays without shrinking Medicaid spending as they seek to offset the tax cuts in their budget bill.

“We need the projects that are currently under development to be brought online so we can continue the President’s ‘America First’ agenda,” added Garbarino, who previously led a letter last fall with 17 other Republicans urging leadership not to gut the credits. “These [credits] are helping the president accomplish what he said he wanted to do in his campaign, and that was to make America an energy dominant country.”

Up until now, Republicans haven’t detailed how far they are willing to go to protect these credits as Trump seeks to dismantle former President Joe Biden’s climate agenda, even as other members have loudly balked about cuts to Medicaid.

But it could start to become clearer this week which particular credits are on the chopping block as House Republicans start to fill in the details of the budget bill they intend to pass through the reconciliation process. That process allows them to bypass the Senate filibuster and deliver it to Trump’s desk with only GOP votes.

As POLITICO first reported, Republicans on the House Ways and Means Committee, which has jurisdiction over the credits, are expected to begin meeting behind closed doors this week to draft legislative text.

Garbarino, who is co-chair of the bipartisan Climate Solutions Caucus, said he and his fellow Republicans are releasing their letter addressed to Ways and Means Chair Jason Smith (R-Mo.) ahead of those meetings to help inform their work.

In the new letter, which the Republicans framed to appeal to Trump, the lawmakers warn that repealing certain tax credits “would increase utility bills the very next day.” They said the incentives are helping to boost manufacturing and energy production that will help meet the growing power demand from a fleet of planned artificial intelligence data centers.

They note that “many credits were enacted over the course of a ten-year period, which allowed energy developers to plan with these tax incentives in mind.”

That means that even if Republicans stop short of a full repeal, and instead choose to phase out credits or otherwise restrict them to reduce their cost, there would be consequences for electricity ratepayers, the lawmakers said.

“Full repeal right now of energy tax credits would be a disaster for what companies have paid for, for what we’ve already invested in with taxpayer dollars,” Garbarino said, adding that he’s spoken several times to Smith. “Even starting to phase them out would end up making a project moot.”

The rising number of House lawmakers expressing support for the incentives is far larger than Republicans’ narrow majority in the chamber — though the members who signed onto the letter don’t necessarily all support the same credits contained in the IRA.

Other Republicans have also professed their support for certain incentives, such as during a Ways and Means member day hearing in January. But they could face pressure not just from their fellow GOP lawmakers, but from Trump himself, who has vowed to gut the Inflation Reduction Act while deriding it as a “green new scam.”

GOP leaders have set an ambitious goal of completing the reconciliation bill by Memorial Day, even as the Senate and House have yet to reconcile the budget resolutions required to formally launch the process.

The House budget resolution orders committees to find deep cuts, which could put more pressure on Republicans to gut the green subsidies, especially given the pushback on Medicaid. The debate will likely drag on for months — the Senate is not expected to take up the House resolution until later this month, at the earliest.

Rep. Juan Ciscomani (R-Ariz.), who signed the letter and has a large electric vehicle manufacturing plant in his district, said he discussed the credits with Speaker Mike Johnson before the House narrowly passed its budget framework late last month. Ciscomani is also among the Republicans raising concerns about proposed limits on Medicaid and food assistance.

It's “very early in the process,” Ciscomani said, but he has confidence that more members will speak out about the clean energy credits once text starts emerging.

“It doesn’t just end with that letter [last year], obviously, and one of the reasons is that there are more people that after that letter came [to us] interested that share our position,” Ciscomani said.

Rep. Jen Kiggans (R-Va.), whose district has received funding for offshore wind developments, said the funding was important to increase energy security.

“America cannot afford to turn a blind eye to how existing clean energy tax credits are actively helping our Armed Forces, small businesses, and everyday families,” she said in a statement. “I am proud to stand with my colleagues to advocate for an all-of-the-above approach that protects these critical tax credits and spurs innovation.”

In addition to the 14 signatories of last year’s letter who remain in the House, Reps. John James (R-Mich.), Dan Newhouse (R-Wash.), Vince Fong (R-Calif.), Gabe Evans (R-Colo.), Jeff Hurd (R-Colo.), Ryan Mackenzie (R-Pa.) and Rob Bresnahan (R-Pa.) joined the new letter.

The latter four are freshman members from swing districts that have benefited from the credits.

“Common sense tax credits that preserve all-of-the-above options for safe, reliable, and affordable energy are essential to American energy dominance,” Evans said in a statement.

Thus far, the IRA credits receiving the most public support from Republicans are those supporting biofuels — which a group of House Republicans successfully defended in 2023 — and the subsidy for carbon capture, which is backed by the fossil fuel industry.

A bipartisan group of lawmakers including Ways and Means member Carol Miller (R-W.Va.) introduced a bill last week to expand that credit, known as 45Q, to cover methane captured from mines.

Republicans have also publicly backed the advanced manufacturing credit and tech-neutral credits for electricity investment and production, which were created by the IRA. Those credits range from support for wind and solar power to nuclear and geothermal energy as well as biofuels.

“Tax incentives like the tech-neutral clean energy credits under 45Y, 45E, and the 45Q carbon sequestration credit and the 45X advanced manufacturing credit aim to strengthen manufacturing capability and reduce the engineering, procurement and construction risk that have plagued major energy projects,” Rep. Mariannette Miller-Meeks (R-Iowa), who chairs the Conservative Climate Caucus and signed the letter, said in a hearing last week.

The investor-owned utility trade group Edison Electric Institute brought 40 companies to Congress last week, in part to argue that upending existing tax policy would undermine “energy security and the billions of dollars in current investments flowing to communities and electricity customers,” a spokesperson said. The nonprofit group Ceres, meanwhile, brought 80 companies to the Hill for more than 100 meetings last week in support of the credits.

Zach Friedman, senior director of federal policy at Ceres, said Republicans signaled “a lot of receptivity” to the companies’ arguments in those meetings.

“We’re cautiously optimistic that a lot of these will stay in place,” Friedman said.

Republican leaders, however, have signaled they are full steam ahead on examining cuts to the IRA.

“Everything [in the IRA] is on the table in the sense that we’re looking at it, nothing has been decided,” Senate Finance Chair Mike Crapo (R-Idaho) said in a brief interview.

And Johnson indicated late last month that he’s likely to go beyond his previous plan to take a “scalpel” to the IRA.

"It’s gonna be somewhere between a scalpel and a sledgehammer," the speaker told reporters at the time. “We’ll have to see.”

Kelsey Tamborrino contributed to this report.