Republicans Propose Spiking Clean-Energy Tax Credits to Raise Debt Limit

(Bloomberg) -- Hundreds of billions of dollars in clean energy tax subsidies from Democrats’ marquee climate law would be repealed by legislation to lift the debt ceiling introduced Wednesday by House Speaker Kevin McCarthy. 

The legislation will “end the green giveaways to companies that distort the market and waste taxpayers’ money,” McCarthy said, referring to recent analysis that said the climate law’s tax credits were estimated to end up costing some $1.2 trillion.

As is, the legislation is considered dead-on-arrival in the Democrat-controlled Senate and with the White House, but it represents an opening salvo in negotiations. House-passage is far from assured as McCarthy works to corral votes in the coming days.

The bill, which would increase the debt ceiling by $1.5 trillion, would repeal new energy tax credits in Democrats’ Inflation Reduction Act passed last summer and restore existing ones to levels prior to passage of the historic climate legislation, according to a summary of the legislation. 

While the cost of the law’s tax credits has been put at $270 billion by congressional estimators, others have said they are likely to end up costing significantly more, including Goldman Sachs Group Inc., which issued a report last month that estimated the credits’ worth at $1.2 trillion. 

The bill also includes a measure long-sought by Republicans that would require congressional approval of new federal regulations that are estimated to have an economic impact of $100 million or more annually.  

(Updates throughout)

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