President Joe Biden’s Inflation Reduction Act is turning the United States into a renewable energy superpower, and the vast majority of its green-tech subsidies have landed in Republican-held congressional districts, according to a June analysis from Bloomberg.
The result? Republicans who were screaming to end these subsidies are now slamming on the brakes, Politico reported on Sunday. And a faction of House Republicans is begging Speaker Mike Johnson to save much of the law they’ve long fought to destroy.
The immediate result is one of the best recurring themes of the 2024 election season: Republicans in disarray. Ultraconservatives like Rep. Chip Roy are attacking their colleagues for flip-flopping.
“Now, they want to preserve so-called ‘green’ handouts to Democrats’ corporate cronies,” Roy wrote. “The GOP must ignore K-Street lobbyists and refuse to fund the climate corporate cronies destroying our country.”
That would be the “cronies” who are making an over $200 billion investment that will generate thousands of jobs in critical industries where the U.S. is currently heavily dependent on China. Not to mention that those “handouts” go a long way toward mitigating the climate crisis.
Instead, the far right is pushing Republicans to repeal the Inflation Reduction Act. That position is supported by a different group of K-Street lobbyists and conservative organizations that are strongly connected with fossil fuels.
At the moment, there’s no real chance that a bill repealing any part of the Inflation Reduction Act could clear the House and (Democratic-led) Senate in time to die on Biden’s desk. But if Republicans gain more control in November, the faction of Republicans now somewhat supportive of the subsidies could be the deciding factor in whether such a bill is viable.
As the subsidies spur more green-tech projects and create jobs, this problem for Republicans will grow more serious. More and more Republicans are likely to find themselves trapped by the horror of a virtuous cycle, one where doing the right thing is also the politically important thing for their reelection—even if that thing means supporting Democratic legislation that none of them signed.
Meanwhile, ever since Elon Musk had Trump over for breakfast and began talking about dropping about $45 million a month to help Trump get elected, Trump has executed a sloppy U-turn on his policies toward subsidies for electric vehicles. He’s gone from declaring he would kill those subsidies “on day one” to being “totally for” electric cars and calling them “incredible.” Trump has been open about admitting his reversal was due to Musk’s support, and his explanation of his position remains otherwise incoherent.
“They want to go all electric, and there’s no way you can ever load them up,” Trump said at a rally in Atlanta earlier this month. “They call it loading them, you can’t load them.”
The tax credits and other subsidies available under the Inflation Reduction Act have been particularly helpful in shifting future EV battery production to the United States. Battery factories are going up in deep-red Mississippi, in the swing state of Wisconsin, and at previously abandoned locations in Detroit.
Republicans who try to kill subsidies for EVs and other green projects are now working directly against big investments and the promise of jobs in their districts. For some of them, that won’t matter; they run more on fear-mongering about Democrats than about how they want to help Americans. For others, it’s already become an issue.
Meanwhile, there is a genuine threat to America’s economy. China’s dominance of the battery industry, along with high levels of vertical integration in Chinese factories, are allowing the car company BYD to produce a remarkably good EV that retails for just $11,500. Chinese automakers are now building factories in Mexico, despite U.S. attempts to slow their progress. It may soon be much more difficult to hold back the tide of low-cost Chinese EVs.
The incentives provided by the Inflation Reduction Act, along with current restrictions on the import of Chinese-made vehicles, provide American manufacturers a window to catch up, build a market, and better position themselves to bear that flood when it eventually comes. If Republicans prevent industries from preparing, the flood is likely to drown industries that go well beyond cars.
When Biden and Harris pushed the Inflation Reduction Act, they created the best kind of trap, one in which Republicans have the incentive to do the right thing because it’s also the thing that benefits them politically. The war now breaking out in the GOP might best be thought of as “those who think helping their district is important” versus “those who just want to smash Democratic things at all costs.”
As long as that war goes on, everyone wins.
