Illustration: Tiffany Herring/Axios
House Republicans face a tough challenge to claw back IRA spending and possibly roll back regulations after adopting a budget resolution Tuesday night.
Why it matters: The party must find hundreds of billions in savings to pay for an extension of the Trump tax cuts, which will require overcoming internal objections about how much to slash spending.
Here's what we're watching:
1. E&C's not-so-easy task: The budget resolution instructs the House Energy and Commerce Committee to find at least $880 billion in cuts.
- Medicaid changes could cover the bulk of that, but political reality is forcing Republicans to try to put bigger energy cuts on the table.
- "If you think about clawback and certain things, there's not as much there as some people had anticipated," Rep. Bob Latta, chair of E&C's energy subcommittee, said at an Axios event today.
Latta said the revenue from auctioning spectrum, as one example, could reach $74 billion, and any energy rollbacks are likely "not going to have as big" of a number.
- "The Biden administration starting around Labor Day last year was pushing a lot of money out the door" with the IRA, leaving much of the funding out of Congress' reach, he said.
2. Tailpipe rule repeal: Republicans hope to achieve some of those savings by rolling back auto emissions regulations.
- Budget Chair Jodey Arrington said Tuesday that that would be worth more than $100 billion, appearing to reference a CBO estimate that found the rules could increase use of the EV credit and decrease gas tax receipts.
- Whether or not that complies with Senate rules is a "tough call," said Bill Hoagland, a longtime GOP budget aide who's now at the Bipartisan Policy Center.
- But he said it seems as if those savings would likely be "merely incidental" to the policy and not allowed under the Byrd rule. He pointed to Democrats' effort to raise the minimum wage in reconciliation, which was nixed on similar grounds.
Senate Democrats would lodge a parliamentary challenge to any effort to repeal regulations.
- "If you haven't lived in this space as a House person who doesn't have to cope with the parliamentary restrictions, you can get some pretty exotic views about what you can do," Environment and Public Works Ranking Member Sheldon Whitehouse told Axios.
3. Tax credit futures: Republicans still don't seem to know what, exactly, they'll be able to do with the IRA's lucrative clean energy tax credits.
- The EV incentive is likely to be tossed, but GOP-friendly credits like the 45X advanced manufacturing incentive could stay.
- "I don't think there's consensus [on the IRA credits]," Republican Study Committee Chair August Pfluger told Axios. "I think once we get to the actual committee-level markup, then we'll have those discussions."
The bottom line: Natural Resources chair Bruce Westerman summarized the House GOP stance of the moment: "I'll be more aggressive in trying to probably put more in the bill than pulling stuff out of it."
