The Inflation Reduction Act (IRA), a significant piece of legislation aimed at boosting clean energy and climate-related projects, faces potential repeal under new political leadership. With approximately $369 billion allocated over the next decade, the IRA has already identified 358 major projects across 42 states, leading to nearly $132 billion in investments. Business stakeholders and political analysts are weighing the potential impacts of a repeal, which could result in significant economic and environmental repercussions.
Business leaders express concern over the potential repeal of the IRA, citing potential revenue losses and job cuts. More than half of surveyed business stakeholders believe they would lose business or revenue if the IRA were repealed. Alarmingly, 21% of these stakeholders indicate they would need to lay off workers. The IRA's influence is particularly notable in the electric vehicle (EV) sector, with top investment states being predominantly red or swing states such as Michigan, Arizona, North Carolina, and Nevada.
The IRA's impact on Republican congressional districts is profound. Over 60% of announced projects, representing nearly 80% of investment and 70% of jobs, are located within these districts. For instance, Rep. Buddy Carter's district in Georgia has seen 7,222 jobs and $7.8 billion in investments courtesy of the IRA. Furthermore, the United Auto Workers (UAW) has committed $40 million through 2026 to support non-union autoworkers and battery workers organizing nationwide.
Despite its successes, the IRA is under threat from political figures who aim to reverse its provisions. President-elect Trump and other GOP members have spoken about repealing the act, citing concerns over spending and regulatory impacts. Repealing the IRA could result in lost factories, jobs, tax revenue, and up to $50 billion in lost exports. The act's federal tax credit for buying new electric vehicles and various incentives for clean-energy investments are prime targets for elimination.
In this context, Samantha Smith emphasized the importance of continuing the progress made under the IRA:
"That's a really big deal for us and we want to keep building on that" – Samantha Smith
Smith also highlighted efforts to ensure that every job created through federal funding can be a good union job:
"We're going to work to make sure that every job and clean-energy project with this federal funding can be a good union job" – Samantha Smith
Mike Johnson, a prominent figure opposing the IRA, expressed his stance on energy policy:
"We have to stop the attacks on liquefied natural gas, pass legislation to eliminate the Green New Deal…. We're going to expedite new drilling permits, we're going to save the jobs of our auto manufacturers, and we're going to do that by ending the ridiculous E.V. mandates" – Mike Johnson
However, Bob Keefe sees the IRA as a pivotal policy for economic growth and environmental progress:
"The IRA is the quintessential policy that can create jobs, drive economic growth and improve our economy, while at the same time giving us the tools to reduce greenhouse gas emissions" – Bob Keefe
Reagan cautioned against an adversarial approach to a significant part of the economy:
"If he's going to be successful, he can't take an adversarial approach to a huge part of our economy" – Reagan
A Net Zero Policy Lab analysis from Johns Hopkins University warns that repealing the IRA could harm U.S. manufacturing and trade:
"Our scenario analysis shows that U.S. repeal of the IRA would, in the most likely scenario, harm U.S. manufacturing and trade and create up to $80 billion in investment opportunities for other countries, including major U.S. competitors like China" – Net Zero Policy Lab at Johns Hopkins University
Bob Keefe echoed concerns about the potential repeal's impact on various sectors:
"Our members and businesses across a lot of sectors are very concerned about the potential of repealing" the IRA – Bob Keefe
Andrew Reagan pointed out that repealing tax credits could lead to project cancellations and job losses:
"You would see not only projects canceled, but job losses" – Andrew Reagan
He further explained that stifling American companies creating jobs would be detrimental:
"If he repeals the tax credits or tries to stifle American companies that are creating jobs, he can't do any of those things" – Reagan
Mike Johnson advocated for a measured approach when addressing changes to the IRA:
"You've got to use a scalpel and not a sledgehammer, because there's a few provisions in there that have helped overall" – Mike Johnson
Shelley Moore Capito emphasized the positive impact of tax relief provided by the IRA:
"some people have taken advantage of this tax relief and are now employing 800 and 1,000 people, and that's what this should be all about" – Shelley Moore Capito
The Laborers' International Union of North America represents approximately 530,000 workers in energy and construction industries. The potential repeal of the IRA poses risks not only to their employment but also to broader economic stability.