Trump could spare Biden’s energy credits and still defeat IRA

The fate of President Joe Biden’s landmark climate legislation, the Inflation Reduction Act, is in the hands of the incoming Republican-controlled White House, Senate and House of Representatives.

At the White House level, President-elect Donald Trump has already nominated three people to posts in his administration who are likely to be key to the future of the IRA, if they are confirmed by the Senate: hedge fund executive Scott Bessent as Treasury Secretary, oilfield services company Liberty Energy CEO Chris Wright to lead the Department of Energy, and at the Interior Department, North Dakota Gov. Doug Burgum.

Any full repeal of the IRA would have to be passed by both chambers of Congress, where Republican lawmakers so far have been reluctant to completely discredit the law’s benefits. House Speaker Mike Johnson, R-La., told CNBC in September that he would use “a scalpel and not a sledgehammer” on the IRA.

There’s a good reason for this approach: As of late October, roughly three quarters of the clean energy investments that have been made with IRA funds benefitted congressional districts that backed Trump in the 2020 presidential election, according to a Washington Post analysis of data from the Massachusetts Institute of Technology and the clean energy think tank Rhodium Group.

But what future Trump Cabinet members would do is also “pretty profoundly important” to the future of the massive legislation, said Tanuj Deora, a former director for clean energy at the Biden administration’s Office of the Federal Chief Sustainability Officer. The agencies hold considerable power over the interpretation and implementation of the IRA’s programs and incentives, like tax credits and business loans. 

A priority for Republicans going into 2025 is extending the expiring provisions of the Tax Cuts and Jobs Act of 2017. Trump is looking to extend the tax cuts within his first 100 days in office next year.

This extension would cost $4.6 trillion over the 10-year budget window, according to estimates from the Congressional Budget Office.

“In addition, Trump promised another seven to eight trillion in tax breaks during the last few weeks of the [presidential] campaign,” said Keith Martin, co-head of projects at the law and lobbying firm Norton Rose Fulbright.

The money for all this has to come from somewhere, however, and experts say…