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 Mr. 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 toward 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…