House Republicans have gotten themselves into a tricky situation. The party says it will vote to raise the debt ceiling — and avert an economically ruinous default on the United States’ financial obligations — only if Congress axes a slew of clean energy tax credits passed in the Inflation Reduction Act. But the majority of those credits are benefiting red states. President Joe Biden’s historic climate law has already driven $150 billion in new investments for solar and wind projects, electric vehicles, and other low-carbon technology, according to an analysis from the American Clean Power Association. And the bulk of those new projects are in GOP-led congressional districts. An analysis by POLITICO early this year similarly found that Republican districts were home to about two-thirds of the major renewable energy, battery and electric vehicle projects that companies had announced since the IRA became law in August. Some Republican officials are embracing the windfall. Gov. Brian Kemp, for example, is aggressively pursuing a clean energy economy in Georgia. But House hard-liners say the investments are an example of irresponsible spending. Earlier this week, House Speaker Kevin McCarthy of California did not appear eager to target the green tax credits in debt ceiling negotiations. But pressure from the party’s right flank seems to have forced his hand, writes POLITICO’s E&E News reporter Jeremy Dillon. Republicans argue that the open-ended tax credits could push the total cost of the climate law over $1 trillion — a far cry from the measure’s stated $369 billion price tag. All in all, the GOP plan would repeal or revise 24 tax incentives established or tweaked by Biden’s climate law. Unsurprisingly, the White House is having none of it. “That’s the MAGA economic agenda: spending cuts for working and middle-class folks,” Biden said Wednesday in response to the GOP’s opening bid. “It’s not about fiscal discipline; it’s about cutting benefits for folks that they don’t seem to care much about.” Republicans are unlikely to convince Democrats to nix any low-carbon credits or agree to the numerous other spending cuts in the GOP’s 300-page-plus bill. But if GOP lawmakers refuse to vote to raise the debt ceiling, the U.S. could default on its debt as early as June. That would leave the government without money to pay not only creditors, but also the military, federal employees, beneficiaries of programs like Social Security and Medicare, and numerous other people and institutions. There are, however, areas ripe for compromise. Part of the GOP proposal is a measure that would ease permitting rules for new energy infrastructure and mining projects, which might find some favor among Democrats.
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