Environmental justice programs are one target for GOP attacks.
If Republicans take control of the House, Senate, or both in the midterms, they have every incentive to turn the rollout of Democrats’ singular achievements into a political disaster. At stake is $370 billion in incentives for electric vehicles, electric appliances, clean energy, and pollution reduction, passed as part of the Inflation Reduction Act this summer on a party-line vote.
Republicans can’t scrap any part of the law as long as President Joe Biden remains in office; any attempt would face a presidential veto, even if it managed to pass the Senate filibuster threshold. What Republicans can do is gum up the works of the bill’s massive climate programs. In the majority, they would have additional powers to call in agency officials for hearings and issue subpoenas — all tools that could be used to disrupt the implementation of both the IRA and the bipartisan infrastructure law passed a year ago.
Some of this should sound familiar. Twelve years ago, Republicans swept the House in the midterms and applied the same strategy to the stimulus law meant to help recovery from the late-2000s Great Recession. The most memorable strategy was the GOP’s attack over Solyndra, a company that went bankrupt two years after the Department of Energy provided it $535 million in loan guarantees.
Solyndra made up a small subset of a portfolio of $34 billion to promote high-risk, high-reward technology companies; defaults made up just 2.28 percent of the overall portfolio. The program was unexpectedly successful, making $30 million for the government, outdoing expectations when the program was first set up (the GOP-controlled Congress was responsible for creating the program to support innovative clean energy technologies as part of the Energy and Policy Act of 2005).
Republicans, though, still hold up Solyndra as a prime example of government corruption and the dangers of “picking winners and losers.” And they’ve already prepared the same playbook for the IRA. “It’s Solyndra on steroids,” said Washington Rep. Cathy McMorris Rodgers, who stands to lead the Energy and Commerce committee if Republicans win the House. Sen. John Barrasso, who could lead the Senate committee, issued a 20-page report last year, “The Solyndra Syndrome and the Green Stimulus Delusion,” warning that Biden’s “green stimulus is almost sure to be a flop, too—and a more expensive one.”
The political context of the IRA is different from the 2009 stimulus, so its biggest vulnerabilities will be different, too. This time, loan guarantees to clean energy companies won’t be front and center. Instead, the law’s focus on programs for communities of color and rebates for low-income consumers will be the most vulnerable — and there is a thin line between Republicans being a nuisance in the law’s implementation and a truly damaging force.
The climate policy targets that gas groups have in mind for a Republican Congress
So far, most Republican attacks have been focused on the parts of the law that lower Medicare prescription costs and bulk up IRS staffing.
But climate spending makes up the majority of the law and will be under scrutiny as well.
Energy interest groups are already drawing up their lists of priorities for the next Congress. One of the programs that the natural gas lobby American Gas Association (AGA) takes issue with is a $4.5 billion program encouraging electrification of homes. The High-Efficiency Electric Home Rebates allow up to $14,000 for low- and moderate-income households to electrify their homes. In a statement to Vox, the group said it would rather see the law “allow for fuel neutral energy efficiency investments,” meaning they think the law should help fund gas appliances and expansion too.
The organization was even more frank about its priorities at a conference with industry leaders in Minneapolis in September. A recording from the event (first reported by the New York Times) revealed the group’s plans to work with House Republicans to ramp up oversight.
The recording, also reviewed by Vox, shows AGA’s top lobbyist Allison Cunningham warning about the impact of the law’s $2.8 billion environmental justice block grants to community-based nonprofits focused on cutting environmental pollution. “We’re concerned that this can be used or applied to support gas ban efforts at community levels,” said Cunningham. “And again, there’s a lot of different opportunities for community groups or other kinds of groups who haven’t been as skilled as long to be eligible for grants, maybe not proper training.” Another area Cunningham warns about is funding that “includes language on reducing indoor toxins and indoor air pollution.”
This suggests that some of the programs Republicans plan to target will be the law’s funding helping communities, particularly low-income ones, cut their pollution. These kinds of programs pose a threat to gas utilities because those utilities make their profits from putting more pipes in the ground to connect gas to new buildings. Any effort to stop that growth of a captive gas customer base undermines the companies’ future.
AGA told Vox that the environmental justice block grant program is not part of its conversations at the federal level but that it will be watching to see who is eligible as the program is implemented: “We want to ensure there is proper training for those who may receive the grants as well as sound science and good data being used to inform public policy that may result from findings.”
AGA will be one of many energy groups urging Republicans to inspect the parts of the IRA they dislike. The American Petroleum Institute, the US Chamber of Commerce, and the National Association of Manufacturers have all spoken out against its clean energy spending. “I totally understand that the oil, coal, and gas guys are going to be coming hard at this range of programs because they don’t want to lose any of their market share any faster than they already are,” said Sam Ricketts, co-director of the climate advocacy group Evergreen Action, who advised Democrats on the bill. “That’s both what makes these programs vulnerable to this kind of tampering, and also obviously what makes these programs so important.”
The Solyndra playbook looks different in 2023
Republicans face Biden’s veto if they try to rewrite the law. But if they gain a majority in either congressional chamber, they still have plenty of options to obstruct agency action.
Agencies will be key to carrying out the law effectively, and the GOP can do its greatest damage if it prevents staff from doing their jobs. Agencies are facing enormous pressure to roll out programs in the new year, coinciding with the start of the 2023 tax year. The law leans so heavily on tax incentives and rebates for consumers that it’ll be the Treasury Department with the biggest responsibility for writing the rules around implementation. And the IRS will ultimately be the enforcers, turning the agency into an unexpected body for climate action.
One worry is that a Republican Congress could slow that work down, creating the impression of a dysfunctional rollout of the law.
“They can try to pull funding for agencies in the annual appropriations process that administer these programs,” said Jason Walsh, executive director of the labor and environmental coalition BlueGreen Alliance. “They can try to have unnecessary or burdensome oversight hearings, they can haul agency staff up to the Hill to embarrass them and to slow down work; they can attach writers or poison pills onto must-pass legislation.”
Another tactic the GOP is considering, according to the Washington Post, is using the debt limit and government shutdown to make cuts to clean energy and climate spending. While agencies are funded through mid-December, Republicans could seek budget cuts in the future that slow down work even further.
All this will be under the guise of Republicans just doing their job in an oversight role. Yet not every program will face the same level of scrutiny. There are parts of the law the energy industry applauded — AGA pointed to the renewable natural gas investment credit and hydrogen investments as examples. And GOP leaders have mentioned no plans to investigate these investments.
Republicans are trying to destroy a law that benefits their districts
Democrats are bracing for the attacks. “If you are making investments in early- to mid-stage technologies, you expect a certain number of failures.” said BlueGreen’s Walsh. “In sectors where technologies are in competition for dominance, some are just not going to pan out. And that’s part of the reason the federal government takes the risk is because the private sector isn’t going to do it.”
Asked what kind of defense Democrats could put up in a Republican Congress, Rep. Peter Welch (D-VT), who is running for Vermont’s Senate seat, said, “Our best defense is to do everything we can to avoid any kind of mistake. I have some confidence that we can get significant public support as this rolls out because our approach is about incentives.”
But the Solyndra playbook serves another lesson: Republicans’ selective memory. The stimulus in 2009 ended up benefiting many Republican districts. The same will be true for the Inflation Reduction Act.
The rural electric co-ops make up one of those programs, with $2.8 billion in grants that boost community-owned grids. The law is also already encouraging private investment in red states. Walsh explained the law is designed to drive investment in parts of the country that have relied economically on fossil fuels, which tend to be red areas. A lot of projects and manufacturing will wind up in GOP-governed places like Ohio, Oklahoma, and Wyoming.
This is ultimately what Walsh hopes could help protect the law. “If [Republicans] create uncertainty about the funding for these programs, I can imagine that it will not be well received by the many companies and investors that are teeing up major capital investment,” he said. “If they really make a major move to obstruct or overturn [the IRA], I think they’re going to hear from a lot of those folks.”
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