The Republican proposal to address the debt ceiling contains the GOP’s H.R.1 energy package in addition to a repeal of several climate-friendly tax credits, including some that were the centerpiece of the Inflation Reduction Act.
The legislation broadly includes both a $1.5 trillion increase in the debt limit and $4.5 trillion in savings, according to Speaker Kevin McCarthy (R-Calif.).
The bill targets tax credits that were included in the Democrats’ Inflation Reduction Act that aim to bolster carbon-free energy sources and combat climate change, including tax credits for electric vehicles as well as solar and wind infrastructure.
McCarthy said on the House floor Wednesday that the bill’s provisions would “end the green giveaways that distort the market and waste taxpayers’ money.”
Democrats pushed back on the idea, with Sen. Debbie Stabenow (D-Mich.) tweeting “Speaker McCarthy commits to slashing American manufacturing jobs. What an asinine idea!”
The tax credits the republicans target include modification of credits for carbon sequestration, as well as the outright repeal of tax credits for clean hydrogen, sustainable aviation fuel, renewable electricity production and investment and for used clean vehicles.
It also includes the H.R. 1 energy package — which Republicans have touted as their answer to President Biden’s energy policies — that seek to speed up the approval process for energy projects, bolster oil and gas production and mining, repeal additional IRA provisions and limit states’ ability to prevent energy projects.
Democrats have said they hope to pass a “clean” debt limit bill. As this appears to represent Republicans’ opening salvo, it’s not clear which of these provisions, if any, could make it into a final agreement. It’s also unclear, however, whether McCarthy has the votes for the package in the House, where Republicans hold a four-seat majority. McCarthy’s caucus includes a number of hardline Republicans who have never voted for a debt limit increase at all.
However, Sen. Shelley Moore Capito (R-W.Va.) suggested this week that just the provisions aimed at reforming the permitting process for energy and infrastructure projects could make their way into what’s eventually agreed upon.
“Putting all of H.R. 1 on there is probably a bite of the apple [that is] just a little bit too big,” she said before the proposal was released, but added that if it’s narrowed down to “meaningful permitting reform…that might be enough to satisfy some folks.”