What Ways & Means proposed to do to IRA clean energy tax credits

Emily Pontecorvo also summarized the proposed changes nicely at Heatmap:

@Dana Nuccitelli : Thanks a ton for sharing this quick summary Dana! Our chapter meets tonight and your summary is really helpful for discussion.

I know you said it could've been a lot worse, but my brain can't move past “it could've been a lot better”. Eagerly awaiting upcoming strategy from National on this front.

-Shekhar, Alameda County Chapter

@Dana Nuccitelli Thanks, Dana, for this quick summary. It seems to me the only way this result could have been worse is if they repealed all IRA tax credits immediately. Very disappointing. Looking forward to the CCL legislative staff reading on next steps and whether our chances of turning this around in any way is possible as the reconciliation process progresses.

@Dana Nuccitelli Can this still be changed on the House side? Or is the only point of influence now the Senate? Thank you-Jan

Yes it can @Janice Schaper (although the Senate is the better bet). We'll have more to say about it later today.

Rhodium published a preliminary analysis of the Ways and Means Committee's proposed changes to the IRA clean energy tax credits.

…will raise energy costs for American households by as much as 7% in 2035, stifle energy technology innovation, increase pollution, and could put a meaningful portion of half a trillion dollars of new manufacturing, industrial, and clean electricity investments across the country at risk.

You can also see a summary of Ways & Means' proposed changes similar to mine above but in table form from Shuting Pomerleau at the American Action Forum here. Shuting estimates the budgetary savings from the proposed IRA clean energy tax credit changes:

The House Ways and Means Committee’s draft of its reconciliation legislation proposes a significant paring back of about 60 percent of the Inflation Reduction Act energy tax credits, which would raise about $515 billion in revenue from 2025–2034.

The proposal would repeal some energy credits immediately, including all clean vehicle credits, the alternative fuel vehicle refueling property credit, all residential energy efficiency credits, and the clean hydrogen production credit, which would raise approximately $306 billion from 2025–2034.

It would also add phaseouts and restrictions to several credits, including the clean electricity production and investment credits, the clean fuel production credit, carbon sequestration credit, nuclear power production credit, advanced manufacturing production credit, and the credit for certain energy property, which would raise about $210 billion from 2025–2034.

The question before Congress: are those budgetary savings worth raising Americans' monthly energy bills, imperiling tens of thousands of domestic manufacturing jobs, reducing our energy security, and increasing pollution? 🧐

Some good news: a number of Senate Republicans have said that changes are needed to the Ways & Means slashing of the IRA clean energy tax credits. 14 House Republicans wrote a letter requesting changes to the 3 most problematic provisions (relating to foreign entities of concern, transferability, and placed in service date – see Heatmap for details on these).

Most recently, Alaska Senator Lisa Murkowski said that this letter is giving Senate Republicans cover to rethink changes to the IRA. And a number of senators have said that changes are needed from the Ways and Means Markup.

A number of House Republicans also say that they're preparing a formal document with their asks regarding changes to the IRA markup but they're "not at the point of making threats."

The challenge is that House Republicans don't yet see the IRA changes as a red line that will decide their votes on the budget reconciliation package as a whole. It's good that they're requesting changes, but Speaker Johnson says “The bill is almost in final form.” So, the Senate is our best bet for preserving more of the IRA.

It's also possible that Congressional Republicans won't be able to agree on an overall budget reconciliation package that can get a majority of votes in both the House and Senate. In fact, as I was writing this, five conservative House Republicans voted against advancing the budget resolution “citing concerns that the legislation to fulfill President Trump’s domestic agenda would add too much to the deficit.”

If the overall budget reconciliation package fails, the IRA would remain largely intact, as Flannery wrote earlier this week:

Another possibility, is that if enough lawmakers are feeling pressure not to support this legislation (whether because of the clean energy tax credits, or Medicaid cuts, etc.), there may not be enough votes to pass the reconciliation bill at all or this process may drag on for months as they work to find a package that has enough support to pass.

If the reconciliation effort falls apart and we get to the end of the year with no deal, there would likely be a push for a bipartisan tax extenders package. It is almost guaranteed that any bipartisan package on the clean energy tax credits would be better than the current reconciliation proposals but we would remain engaged and advocating for their preservation.

@Dana Nuccitelli
Dana, The House Reconciliation Budget will be terrible for our public lands. From what I understand, they are proposing: to sell ~ 500,000 acres of public lands, mostly in Utah around St. George, and in Nevada's high desert around Las Vegas; to institute mandatory logging; to build commercial roads in pristine wilderness; selling lands for oil and gas drilling; rolling back NEPA and most of the Endangered Species Act.

So many Americans love our public lands and national parks for their beauty, for the recreational opportunities they hold, and outdoor activities such as hunting and fishing. All members of Congress should be adverse at rolling back these protections.

As CCL is a bipartisan organization, can we reach out to our members with GOP congress members so they can contact them?

I have already contacted all of and spoken with the majority of the members of the House Natural Resource Committee that proposed the above changes. However I think the voices of our many CCL'ers would be far more impactful.

What are CCL's concerns about this bill and what is CCL doing to let our legislators know about our concerns?

Thank you,

Polly Estabrook

Hi @Polly Estabrook. See Flannery's blog post that I linked above to get CCL's thoughts and concerns. We're focused on the clean energy tax credits to maximize our lobbying efficacy. I'm sure other groups will lobby against the public lands giveaway too.

@Dana Nuccitelli. Wondered what changes happened over the weekend re: clean energy tax credits? Thanks!

@Dana Nuccitelli I don't understand how the tax credits will work if they expire at end of this year. 2025 taxes are done in 2026, no?

We're wondering that too, @Linda Racine! All we know so far is that some tax credit expiration/phaseout date(s) moved up, perhaps from 2029 to 2028 or something like that. We'll know more by late Tue/early Wed when the text comes out.

@Deanville Celestine, if the tax credits phase out by the end of this year, it means that you can still take advantage of the associated tax credits for any qualifying 2025 projects when you file your 2026 taxes.