Biden Admin’s Inflation Reduction Act Impacts Environmental Programs
TL/DR –
The Biden Administration is attempting to cement key provisions of the Inflation Reduction Act (IRA), a legislation focusing on clean energy, climate, and domestic manufacturing before the November elections. Problems in implementing several IRA provisions have been criticized by industry, independent groups, and Republicans, including Senator Joe Manchin. Looking ahead, IRA implementation is anticipated to speed up over the summer as the Biden Administration looks to put the funding into action and guard against future challenges to the IRA’s provisions.
November Elections Impact on Biden’s Domestic Policy Achievements
As November elections approach, the Biden Administration is striving to solidify domestic policies, particularly the Inflation Reduction Act (IRA) – a major federal initiative focused on clean energy, climate and domestic manufacturing. With vital IRA provisions yet to be implemented, potential delays or repeal are possible if Republicans regain Congress or the White House control.
The Status of IRA Implementation
Since late 2022, the Biden Administration has begun implementing IRA programs and releasing guidance, funding notices, and regulatory proposals to define program parameters. The administration’s goal is to accelerate IRA implementation over the summer to counteract potential future challenges to the IRA’s provisions. However, the implementation has faced criticism, with industry and independent groups expressing concern about delays and low demand for clean energy technologies.
IRA Implementation Milestones
IRA implementation through 2022 and 2023 included guidance on over 50 IRA provisions from the IRS and the Treasury Department. Early 2024 saw the commencement of Phase 3 of IRA implementation, addressing previous phases’ issues and providing final guidance on clean vehicles credit and clean electricity production. Federal agencies have issued funding announcements for IRA funding programs like the EPA’s Greenhouse Gas Reduction Fund (GGRF) and the DoE’s Domestic Manufacturing Conversion Grant.
IRA Implementation Uncertainty
Former US House Speaker John Boehner expressed that the uncertainty surrounding the IRA is due to major policy changes enacted without opposition party buy-in. As legislative and executive changes loom, industry stakeholders are trying to determine what the future holds for these developments.
What if IRA Implementation Stretches into 2025?
If Republicans regain the White House and Congress’s control, they might use the Congressional Review Act (CRA) to overturn IRA rules issued by the Biden Administration. Leveraging CRA to rescind rules essentially requires one-party control of the White House and Congress. Members of Congress have already introduced CRA challenges to major IRA provisions, like S. J. Res. 87 and H. J. Res. 148.
Legislative Changes and Executive Action
If Republicans control Congress and the White House in 2025, they may seek IRA repeal. Conversely, a Republican president may use agency rulemaking to suspend or delay IRA-related rules. Furthermore, a future Republican administration may amend existing IRA rules or delay federal funding under IRA programs.
Risks to Other Biden’s Legislative Achievements
Apart from the IRA, the Biden Administration is also focusing on implementing the Infrastructure Investment and Jobs Act (IIJA) and CHIPS and Science Act. While these acts enjoyed bipartisan support, aspects of IIJA and CHIPS programs may be at risk under a Republican-led Administration. Unfinished regulations are likely to be halted and significant final rules may face changes.
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