It’s an understatement to say that the trajectory for climate and clean energy policy will be determined by the outcome of next month’s presidential election. Republicans are already taking aim at President Biden’s signature achievements, the Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA). As a McKinsey report noted, “the two acts together mount an estimated $370 billion in federal funding over the next five to ten years to facilitate the clean-energy transition.” These bills include a range of tax credits, such as for production and electric vehicle adoption, energy efficient home appliances, billions for a green bank program and much more.
A Trump presidency would threaten a range of investments and incentives for clean energy development in the two laws. Indeed, conservatives seek to “fully repeal recently passed subsidies in the tax code, including the dozens of credits and tax breaks for green energy companies in Subtitle D of the Inflation Reduction Act [IRA].”
On the other hand, a President Harris would add a layer of protection for the programs and measures from the IRA and the BIL that are transforming the clean energy landscape. But even with a Harris presidency, many don’t realize that these tax credits and programs face significant risk. Control of Congress will matter. A recent YouGov model backs up the widespread sentiment that Republicans will take back the Senate – a map including Ohio and Montana as must-win states is brutal for Democrats – and that Democrats will most likely flip the House from GOP control. The result would be a divided Congress and a Democrat in the White House.
Under this scenario, the coming battle over the Trump tax cuts that expire next year is reminiscent of the fiscal fight from over a decade ago that featured President Obama and Speaker John Boehner holding seemingly countless Oval Office meetings to try to hash out a deal. I remember this well as I worked for then-Senate Majority Leader Harry Reid at the time. Democrats felt urgency to act because the Bush tax cuts were set to expire at the end of 2012. Without action, middle class Americans would have faced a sharp tax increase, just as they will without congressional action in 2025.
Republicans held leverage and, in the peak of the Tea Party-era’s emphasis on fiscal austerity, they imposed $85 billion in cuts across the federal budget. As a standalone measure and not as part of a must-pass compromise bill, Democrats certainly would have opposed cutting $11 billion from Medicare, just like they wouldn't vote in the next Congress to repeal parts of the IRA or BIL when considered in a vacuum. But that’s exactly what they had to swallow to ensure President Obama wasn’t blamed for raising taxes on millions of middle-class Americans. In 2025, a similar scenario could play out – some of the climate provisions might become sacrificial lambs for the sake of preventing a widespread tax increase on everyday Americans.
Split government is a period of compromise, especially when a new president is looking to make a mark. And a President Harris would seek to show she’s governing from the political middle, just as she’s campaigned in recent months. As we’ve experienced relatively recently, these compromises can lead to bad policy outcomes on specific issues.
Even with a Harris victory next week, climate advocates and clean energy companies should be prepared to protect provisions of the IRA and BIL through targeted outreach. A number of news outlets have reported in recent weeks on a significant handful of GOP House members supporting tax credits from the IRA that, as Politico reported, “is undeniably bringing federal money, private investments and jobs into communities around the country overwhelmingly represented by Republicans.”
The IRA and BIL have resulted in unprecedented investments in clean energy – largely in red states. Advocacy for maintaining these measures must make clear these benefits and ensure that members of Congress understand it’s in their political interest to protect the ongoing and forthcoming private sector investments that are flowing from these laws and creating jobs for their constituents and driving economic development.
In the event of a second Trump term, the stakes will be even higher, as more, if not most, of these provisions from the IRA will be in serious jeopardy. History provides helpful context in this scenario, too. When Trump took office in 2017 and Republicans controlled both chambers of Congress, most thought the Affordable Care Act was toast. Yet advocacy efforts put relentless pressure on more moderate GOP House members to oppose repeal, and 20 congressional Republicans did just that, prior to the late Senator John McCain famously giving a thumbs down on the Senate floor to sink the repeal effort for good. Outcomes on Capitol Hill are not always predictable, and they can be shaped.
The fight against climate change is too important, and the benefits to date from the IRA and BIL are too real, for us to assume they cannot be saved – no matter what scenario emerges in the next few weeks.
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