House republicans vote to send US EV jobs to China, give trillions to US elites

House republicans passed their tax proposal, which kills a slew of tax credits to help working families become more energy efficient, improve US air quality, and boost US manufacturing. The republican bill instead channels that money to wealthy elites, increasing the deficit by trillions of dollars along the way.

Republicans in Congress released their 389-page proposal last Tuesday and, as expected, it included several provisions to eliminate popular clean energy credits which were driving a boost in American manufacturing.

The credits were largely established under President Biden as part of the Inflation Reduction Act, which raised hundreds of billions of dollars through tax enforcement on wealthy individuals and corporations and channeled that into energy efficiency credits for American families.

We’ve covered how families could save thousands of dollars on upgrades to lower their energy costs through these credits.

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But these credits aren’t just money-saving for Americans, they also work to boost American manufacturing, due to various provisions in the bill, particularly around the $7,500 EV tax credit which was limited to cars that undergo final assembly in North America.

While loopholes exist, nevertheless the bill resulted in a massive expansion of American manufacturing, driving hundreds of billions of dollars of investment and creating hundreds of thousands of jobs.

But now, republicans in Congress have voted to roll much of that progress back. The final vote tally was 215-214, with one additional representative voting “present” (which means 215 out of 430, or 50%, of representatives voted Yea, which is not actually a majority). All Democrats voted against the job-killing measure, while only two republicans, Davidson (R-OH) and Massie (R-KY), voted to support American jobs, and Harris (R-MD) voted “present.”

Here’s a list of the bill’s various effects related to clean air and energy (via the BlueGreen Alliance):

• Attaching restrictions to clean energy and manufacturing tax credits that would make them unusable in practical terms while also “sunsetting” those tax credits early, a move that research suggests will increase costs for American families; 
• Repealing the Clean Vehicle Tax Credits; 
• Repealing the Clean Hydrogen Tax Credit; 
• Clawing back unspent funds for air quality monitoring in schools, clean manufacturing, state and community energy programs, and electric grid upgrades; 
• Defunding and delaying the Methane Emissions Reduction Program (MERP), which reduces pollution and protects the health of workers and communities; 
• Clawing back all unspent Inflation Reduction Act funds, including many provisions that would have lowered energy bills, created jobs, and reduced pollution; and 
• Attacks on many additional Inflation Reduction Act programs and initiatives.

The finalized bill went through some changes, though those changes primarily made the bill worse for American jobs and clean air. For example, it seems that the bill has snuck in a repeal of EPA pollution rules that will save thousands of American lives and $100 billion per year (see sec 42201), in yet another Congressional overreach.

It also seems to have incorporated republicans’ ridiculous proposal to add a punitive fee on EVs, in the amount of $250/year. That fee was originally proposed as a way to eliminate the federal gas tax, and was accompanied by a $20/year fee on gas cars, but republicans dropped the latter fee and boosted the EV fee, with the final effect that it would increase the deficit by billions.

You can perhaps see a pattern in these effects: they’re primarily targeted towards increasing costs for regular American families who were taking advantage of these tax credits, and towards programs that would keep you and your children healthier.

Previous analyses show how repealing these tax credits would lead to increased electricity prices for all Americans.

It should not be any surprise to anyone that has been paying attention that republicans want to poison you and raise your costs, but some people apparently still need more examples, so here we are.

In particular, the bill eliminates the US EV tax credit which had driven so much of that investment due to its domestic manufacturing provision (though there are some small carveouts). Not only does that inflate the cost of the best vehicles available today for Americans, it also takes away one of the incentives that was driving investment in US manufacturing.

And the bill specifically harms Tesla more than it harms Tesla’s competitors, despite its CEO, Elon Musk, being the richest republican donor on the planet.

We’ve warned before that a bill like this would just send more EV jobs to China, a country where nobody is “debating” over which direction the auto industry is going. Chinese automakers all know the industry is going electric, and they’re putting all of their effort into it.

This is quite a contrast with Western automakers which keep hemming and hawing, begging their governments to let them go bankrupt with anti-EV policy decisions that will only slow down their transition towards modernizing to the global EV status quo.

We’ve already seen the effects of other poor policy decisions on manufacturing, with several companies pausing or canceling plans to build manufacturing facilities in North America as a result of tariff chaos at the hands of an ignoramus. Republican districts have been hit hardest, as they were where the majority of this investment had been going.

And we’ve seen it made clear that the republicans in government responsible for protecting clean air would rather poison you and raise your fuel costs, as long as it helps the oil industry which bribed them into their position.

But then, the cherry on top of today’s tax bill is that its cuts of these credits don’t even have a greater budgetary purpose. Not only was the Inflation Reduction Act revenue-positive – which is to say, it raised more money than it spent, thus reducing the deficit – today’s republican tax bill is revenue-negative, which is to say, it will increase the deficit.

The republican proposal raises the debt ceiling by $4 trillion, and it makes use of virtually all of that headroom, as the Joint Committee on Taxation has estimated that it will add $3.7 trillion to US debt. This is largely due to the bill’s significant giveaways to wealthy elites, with the majority of tax cuts targeted at the wealthiest Americans.

So the government isn’t even getting any savings out of this bill, merely channeling more money from working families to the wealthy elites that the republican party has always tried to benefit (including in other ways than the clean energy credits, like by cutting health care for the poor).

The bill will now go on to the Senate, where republicans already showed this morning they will do anything, even if it’s illegal, to harm Americans. If you have a republican Senator, it might be worth letting them know that you support American jobs and clean air, and keeping costs low for Americans, and therefore oppose this bill.

The argument could be made stronger in states that have received significant investment as a result of the credits the bill repeals. EV projects are particularly popular in states like Georgia, North Carolina, and others along the burgeoning US “battery belt”. An interactive tool showing the jobs jeopardized by this republican plan, including the ability to sort by state or Congressional district, is available here.

Otherwise, you can find your Senator on Congress’ website, and then search for the contact form on your Senator’s website to get in contact with them.

Of course, if you have a Democratic Senator, it’s also worth letting them know that you oppose the tax bill, just in case a few of them decide to jump ranks and join the republicans in harming America. We certainly hope they don’t, and are encouraged by the fact that every Democrat in the House made the right decision here, but anything could happen.

Among the bill’s cuts is the rooftop solar credit. That means you could have only until the end of this year to install rooftop solar on your home, before republicans raise the cost of doing so by an average of ~$10,000. So if you want to go solar, get started now, because these things take time and the system needs to be active before you file for the credit.

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