Third Way Statement on Republican Energy Tax Increase

WASHINGTON—House Ways and Means Committee Chairman Jason Smith (MO-08) released the text today of planned changes to clean energy tax credits through Republicans’ budget reconciliation bill. If passed, the bill will raise taxes on new energy and manufacturing projects, an increase that is virtually guaranteed to be passed on to consumers. 

Third Way Senior Director of Domestic Policy Ryan Fitzpatrick issued the following statement: 

“Republicans are coming at working families from all sides here. Their reconciliation bill will both raise prices in the short term and compromise America’s economy long into the future.

“In the face of acute challenges to our electricity supply, this bill will raise the cost of new energy projects, increasing taxes on building new nuclear, geothermal, wind, and solar starting in 2028. But don’t let that timeline fool you – consumers will start to feel the effects of these tax hikes immediately. 

“In response to the rapidly evolving regulatory environment and an unpredictable executive, companies will begin to cancel or suspend new energy projects. Many have already begun. Less supply to meet our growing electricity demand? That’ll raise prices on working families and increase the likelihood of service disruptions, as we head into the hot (and energy-intensive) summer months. 

“The bill also kills consumer credits that make it easier to boost home energy efficiency, presenting the cost-conscious consumer with a choice: they can either pay more on their energy bills or pay more for energy efficiency. Either way, the federal government won’t help lower their utility bill—even for those who need help most. 

“But the Committee won’t content itself with short-term impacts—the bill also hits working families in the long-term too, slashing America’s competitive edge in manufacturing and deploying energy technologies. The bill eliminates tax credits for some US-made energy products and makes the credits practically unusable for the rest. The ensuing chaos will hit emerging technologies like nuclear, and geothermal particularly hard.

“Demand for these technologies is real, and it won’t simply disappear if the US opts out of the market. Instead, allies and potential allies will turn to China and other countries for critical technologies. Republicans have talked a lot about creating more manufacturing jobs, and this bill does that, just not in America.

“Cutting support for clean energy manufacturing and deployment, especially for nascent technologies, is a giveaway to America’s competitors and a blow to the future of working people across this country.”