Republicans propose gutting Biden climate bill for Trump tax cuts

House Republicans Wednesday moved forward with a tax bill to cut billions of dollars in climate-related funding, reduce regulations, and prematurely phase out clean energy tax credits as part of President Trump's, "One, Big, Beautiful Bill."

The heart of the Republican budget legislation targets key climate and energy provisions of the Inflation Reduction Act.

Cuts would impact businesses and consumers, affecting renewable energy, manufacturing, energy efficiency, and electric vehicles. Concurrently, House Republicans proposed streamlining permitting for fossil fuels, rescinding Clean Air Act pollution funding, and allocating $2 billion to the strategic petroleum reserve.

The Inflation Reduction Act has led to $321 billion worth of climate investment being completed, with $522 billion worth of investments still in process, according to a report from the Clean Investment Monitor. Congress was tasked with finding $1.5 trillion in spending cuts to fund President Trump's tax cuts.

House Republicans are hoping to have a floor vote next week prior to Memorial Day, after which the bill will go to the Senate.

Four Republican Senators wrote a letter to Senate Majority Leader John Thune cautioning the caucus against a "full-scale repeal" of tax credits, adding that repealing credits would be disruptive to businesses which had made investments based on the Inflation Reduction Act's tax framework. They also added that cuts would lead to higher energy costs.

Twenty-one House Republicans wrote a similar letter in March urging against cuts to energy credits from the Inflation Reduction Act. A 2024 CBS News report found that over 80% of Inflation Reduction Act spending and tax credits went towards Republican congressional districts.

Environmental groups and renewable energy companies have been on Capitol Hill lobbying to protect tax credits they say are vital to support new industries. Raghu Belur, co-founder of Enphase Energy, a solar components manufacturer, expected changes to the IRA, but didn't expect them to go this far.

"I thought there would be a glide path, I thought there would be a reasonable transition period. Instead it's become very abrupt," he told CBS News.

His company has manufacturing facilities in South Carolina and Texas, made possible by the Inflation Reduction Act. But Belur also worries about the downstream effects on businesses that have formed around renewable energy, like solar installers, which tend to be small businesses.

Among their concerns, Belur and the Solar Energy Industries Association have been focusing on the importance of a tax credit that helps homeowners to finance solar projects. The GOP budget proposal would abruptly end the credit at the end of 2025. The credit was previously slated to be phased out by 2034. He says the credits help support customer demand for nascent businesses, and that the renewable energy sector finally had momentum that should be supported as promised at this stage of their industry.

"Fossil fuels have been receiving subsidies for the last 100-plus years," Belur told CBS News. "I always believe that subsidies must be a catalyst, not a crutch, we are not asking for an infinite extension of this."

The Solar Energy Industries Association, a trade group, estimates that 75% of the affected credits and spending cuts would affect local economies in Republican districts.

"At a time when billions of dollars are being invested in states that overwhelmingly voted for President Trump, this proposed legislation will effectively dismantle the most successful industrial onshoring effort in U.S. history," the group said in a statement.

Several tax credits and incentives are set to be phased out early or end, impacting a wide range of projects, including solar, geothermal, nuclear, wind, and hydrogen. The $7,500 electric vehicle tax credit that President Trump campaigned against will be ended, as well as manufacturing credits to produce electric vehicles.

Funding for other Inflation Reduction Act initiatives are also projected to be cut. Republican Rep. Brett Guthrie, the House Energy and Commerce Committee chair, wrote in an op-ed in the Wall Street Journal this week that the cuts would include $6.5 billion of unspent Inflation Reduction Act funding that is earmarked for the Environmental Protection Agency's Green House Gas Reduction Fund, clean pollution reduction, clean ports, and environmental justice grants.

Evan Chapman, senior director of policy at Clean Tomorrow, a nonpartisan clean energy advocacy group, believes the version of the budget proposed by the GOP would make it harder to quickly increase energy production through renewables, and could lead American renewable energy industries to fall behind the rest of the world.

"This is largely a repeal of the inflation Reduction Act," Chapman told CBS News. "What this bill will do is reduce the availability of energy, increase costs for energy that's coming on the grid, and make it more difficult to pull innovative American technologies that will produce clean energy towards the market."