By Bo Erickson
WASHINGTON (Reuters) -Republican lawmakers working to extend U.S. President Donald Trump’s tax cuts legislation are facing a clean-energy conundrum back home, as major clean energy investments in their districts are at odds with Trump’s skepticism of the industry.
Eleven of the 26 Republicans on the House of Representatives’ tax-writing Ways & Means committee, who are now crafting the extension of the 2017 tax cut legislation, represent areas that have seen hundreds of millions to billions of dollars in green energy investments in the last few years.
Clean energy investments boomed after former President Joe Biden’s Inflation Reduction Act passed a then-Democratic-controlled Congress in 2022, authorizing hundreds of billions of dollars of clean energy tax credits for businesses, most of which were not capped.
Since then, businesses unveiled more than $165 billion of clean energy manufacturing investments nationwide, according to data tracked by pro-clean energy research firm, Atlas Public Policy, and Utah State University.
The House Republicans are trying to cut at least $1.5 trillion in spending from the federal budget over the next decade, to partly offset a tax cut extension that’s expected to cost more than $4.5 trillion over that time.
More than 75% of the clean-energy investments — almost $125 billion — were targeted at Republican-held congressional districts, the data shows.
Trump long derided electric vehicles as a “hoax,” before he closely allied himself with Tesla and saying that he bought one of the cars at a White House event last month.
But in his district east of Memphis, Tennessee, Representative David Kustoff touts investments by automaker Ford to build a new manufacturing hub for electric F-series pickups that were boosted by the legislation.
Ford, and its South Korean partner, SK Innovation, contributed the bulk of the more than $6.5 billion in investments in the district in last four years, the most of any House Republican tax writer, according to the data.
“It’s so important for people in west Tennessee, economically, for us to be successful,” Kustoff told the Jackson Rotary Club last week about the broader tax writing process.
The White House in a document this month tried to convince House fiscal hawks working to advance the chamber’s budget that new revenue to offset potential new costs in the tax bill will be generated by repealing the green energy tax credits “to the fullest extent possible,” according to two people familiar with the pledge.
Behind the scenes, Ford is working with lawmakers to maintain the tax credits, according to a person familiar with the talks.
BALANCE OF DISTRICT VERSUS PARTY LINE
Two other automakers, Honda and General Motors, each invested billions of dollars in electric vehicle battery plants for the next two districts with most clean energy investments on the committee.
Representative Mike Carey cheered the estimated 2,000 jobs that Honda would create in his district southeast of Columbus, Ohio, and Representative Rudy Yakym said in a statement he was “thrilled about this historic investment” from GM in 2023 that included 1,700 manufacturing jobs for his district in South Bend, Indiana.
A new rare earth magnet production facility for components of GM vehicles, drones and other electronics, was recently built in Representative Beth Van Duyne’s district, a tax writer from Fort Worth, Texas.
The company, MP Materials, advanced its goal to become “America’s first fully-integrated rare earth magnet manufacturing facility” by investing $700 million in the facility and said in a 2024 press release they received an almost $60 million energy project tax credit, funded by the 2022 Biden-era law.
Kustoff, Carey, Yakym and Van Duyne’s offices declined to comment about their tax priorities.
A GM spokesperson said the advanced manufacturing production tax credits “advance U.S. leadership in critical technologies” and led the automaker to announce thousands of jobs in three states.
Nationwide, 16 of the top 20 House districts with recent clean energy manufacturing investments are represented by Republican lawmakers, according to the data. Many of them advocated to the tax committee last month to avoid “disruptive changes to our nation’s energy tax structure.”
“This is a tough assignment for tax committee members that have renewable projects in their districts,” Ryan Bernstein, who helps lead the energy practice at McGuireWoods Consulting, “You probably won’t see a lot of the dialogue in public, which will create a black box for a while on what is going to be included or not.”
“When companies make decisions relying upon actions from federal or state government, it’s really important that the government honor those commitments,” said Josh Brown, president of the Tennessee Chamber of Commerce, who mentioned Ford’s large investment in the rural west of his state, “Any possibility that this investment could be pulled back or curtailed based on congressional action is very concerning.”
(Reporting by Bo Erickson; additional reporting by Kalea Hall in Detroit; Editing by Scott Malone and Alistair Bell)
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