Republicans Are Rejoicing as They Gut a Bill That Benefits Red States

Top Republicans seem to have wagered that talking points about ending “handouts to Democrats’ climate activist cronies,” as Guthrie put it, could unite the caucus—and, importantly, inspire them to pass the bill quickly. Repealing the IRA—a rallying cry within the GOP—would serve as cover for huge and deeply unpopular cuts to Medicaid and other programs. Some Republicans have said they want to preserve IRA funds that have helped court billions of dollars’ worth of investments to their district. Others have argued that those cuts should go much further.

On Friday, the House Budget Committee voted against advancing the party’s tax-and-spend proposal. Republican hard-liners were demanding that even steeper cuts be made across the board before they were ready to vote for it, cuts that included a fuller, more immediate rollback of the Inflation Reduction Act. Late Sunday night, that bloc eventually relented, voting “present” so that the package could move forward. Still, the group signaled that they’d continue fighting to extract more concessions. It’s not clear exactly what those lawmakers got out of this weekend’s deal or what else they’ll demand, but Republicans appear poised to deal an even more critical hit to IRA incentives than those they’d proposed last week.

The original package would eliminate most of the Inflation Reduction Act’s $7,500 tax credit to purchase certain electric vehicles at the end of this year and phase out incentives for wind, solar, nuclear, and geothermal power years ahead of schedule. A preliminary analysis from the Rhodium Group projects that the Working Families Over Elites proposal could raise household energy costs by as much as 7 percent in 2035. Repealing the Inflation Reduction Act also stands to put at risk $388 billion worth of investments in Republican-controlled House districts, as investors wary of Trump’s tariff chaos, a potential recession, and the prospective end of IRA tax incentives continue to walk away from previously announced projects. Republicans have tried to suggest otherwise, but much of the $880 billion in cuts the Energy and Commerce Committee hopes to extract would come out of Medicaid. As of last week, the Congressional Budget Office estimated that the GOP’s proposed Medicaid cuts would suck $625 billion out of that program.