October 30, 2023
🥱 Hey Monday, we're sorry it's Garfield. (Oh wait, that's backward.)
1 big thing: "America First" buzzsaw for the IRA
Some in the conservative energy braintrust have crafted plans to blunt IRA tax credits without needing a repeal in Congress, Jael has learned.
Why it matters: Should opponents of the IRA retake the White House and maintain control of at least one chamber, you can expect they'll try to scrap the law …
- … but the jury's out on whether a repeal can be done, even with the lower 50-vote reconciliation threshold that Republicans would need in the Senate.
- That's because many in the private sector back the law's write-offs and stimulus programs, creating a potential headwind of industry pushback similar to the 2017 Obamacare repeal effort.
Driving the news: Think tanks such as Heritage have released copious documents outlining a vision for a future president to unravel President Biden's climate rules. These plans largely focus on full-on IRA repeal.
- Members of one group close to ex-President Trump's orbit — the America First Policy Institute — told Jael some of its previously unreported ideas for limiting the law's breadth without needing Congress.
- Expect IRA changes to be a Day 1 issue, said Mike Faulkender, the institute's chief economist.
- "We are going to review every rule, every notice, everything the administration has done in its implementation of that statute," said Faulkender, who was Trump's assistant Treasury secretary for economic policy.
Zoom in: The EV consumer tax credit, known as 30D, is a potential primary target within the IRA.
- Critics say the Biden administration has sought to implement the credit in a way that maximizes how many cars can qualify for a rebate.
- Faulkender said limiting 30D would entail rethinking how regulators apply the mineral sourcing and trade requirements in the law, which determines how many cars can get the credit.
- "Rather than looking exceptionally expansively on these completely unfunded tax credits for electric vehicles, we would … follow the law."
Additionally, the IRA's tax credit for carbon removal would get a second look in a future "America First" administration.
- "The dollar values on this [credit] are just extraordinary.… I would go through that statute and see how we, through the rulemaking process, can narrow it as much as possible," Faulkender said.
Between the lines: AFPI's approach to energy policy blends the typical "all of the above" right-leaning energy approach with a fresh desire to scrutinize the negative externalities of renewable energy and EVs.
- For example, AFPI's head of energy policy Oliver McPherson-Smith has written extensively about labor injustices in supply chains and the state of energy diplomacy in Africa.
- He told Jael he'd expect a new administration to amplify "oversight and scrutiny" of foreign supply chains and to "limit our trade when we know there is exploitation happening."
- McPherson-Smith would expect the Biden administration's offshore oil leasing schedule — which industry panned — to get a second look.
- Meanwhile, he wants regulators to look "very, very closely at the environmental effects of all new technologies, including offshore wind."
The intrigue: Permitting would also be a priority for any new conservative government.
- AFPI's David Bernhardt told Jael he'd expect efforts to "enhance and streamline and build upon" Trump-era NEPA regulations that Biden reversed.
- "I really see that as something where right out of the gate, you could see dramatic action on that by a new administration," said Bernhardt, who was Trump's Interior secretary.
- There's also some chance regulators would try to reimplement aspects of this year's debt deal, which had permitting provisions. McPherson-Smith said he expects one could look at page-limit requirements.
Context: AFPI was launched in 2021 by ex-Trump officials and includes Rick Perry, Larry Kudlow and Richard Lighthizer.
- As a nonprofit, it hasn't endorsed any 2024 presidential candidates ... but does lay out a policy vision for any future "America First" president (like *cough cough* Trump).