Congress Is Giving Energy Lobbyists a 3-Year Window to Keep Up to $2 Trillion in Subsidies
The House of Representatives passed its “one big, beautiful bill” on Thursday. The sweeping domestic policy legislation includes extensions of President Donald Trump’s 2017 tax cuts, increased funding for immigration enforcement and defense, and work requirements for Medicaid. The legislation is expected to add $2.3 trillion to the deficit.Â
Notably, the bill accelerates the phaseout of several green energy subsidies that were passed in the Inflation Reduction Act (IRA). Starting in 2028, the bill’s technology-neutral production and investment tax credits for clean electricity will be fully phased out. (Earlier drafts of the bill left a partial credit available through 2032.) To qualify for these tax credits, projects will need to begin construction within 60 days of the bill’s enactment, reports The Hill. Tax credits for nuclear power will remain untouched through 2031. The energy clawbacks in an earlier version of this bill were estimated to raise $515 billion in revenue.Â
While rollbacks are better than keeping these tax credits fully intact, the bill falls woefully short by not repealing the IRA completely.Â
Signed into law in 2022, the IRA extended tax credits for green energy resources and created new ones for emerging technologies. The slew of new credits and subsidies was originally expected to cost $271 billion over 10 years. Within a year of its passage, the price tag of these provisions climbed to $536 billion and now stands at $1.2 trillion over 10 years. A recent analysis from the Cato Institute estimates that these subsidies could cost $1.97 trillion through 2034 and reach $4.67 trillion by
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