Red states will be hurt most in coming 'collision' between Republicans and manufacturing: report

13 May

A crowd of attendees at the 2025 Conservative Political Action Conference. Photo: REUTERS / Nathan Howard

A draft bill from the House Ways and Means Committee published Monday "would effectively end most of the Inflation Reduction Act’s tax incentives,” the New York Times reports.

According to the Times, The 2022 Inflation Reduction Act offered “lucrative tax credits for clean energy” and spurred companies “to invest more than $843 billion across the United States in projects aimed at reducing planet-warming emissions.”

“About $522 billion” of that remains unspent, according to the Times. And if Republicans in Congress have their way, it will remain so.

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“Now, much of the rest, about $522 billion, will depend on action playing out on Capitol Hill,” the Times reports. “Starting on Tuesday, Republicans in Congress will begin a contentious debate over proposals to roll back tax credits for low-carbon energy as they search for ways to pay for a roughly $4 trillion tax cut package favored by President [Donald] Trump."

“While shrinking those tax credits could help Republicans save hundreds of billions of dollars, it could also cause companies to abandon plans for new nuclear reactors or battery factories,” the report adds. “More than three-quarters of pending investments were planned in Republican-held congressional districts.”

“It’s jobs, it’s tax revenue into local communities,” Ben King, associate director at the research firm the Rhodium Group, told the Times. “It does represent a meaningful economic change in some of these places.”

Chief executive of the American Clean Power Association Jason Grumet noted while contracts aren't yet being cancelled, companies are “not breaking ground” on new projects.

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“There is a remarkable tension right now, between probably the best fundamentals for investment in the energy sector that we’ve seen in a generation and the greatest amount of uncertainty that we’ve seen in the generation,” Grumet told the Times. “That is a collision that all manufacturing now is trying to navigate.”

Read the full report at the New York Times.

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