The return of newly elected President Donald Trump gives him the opportunity to make good on his promise to cut unused funding in the Democrats’ climate bill.
The big mystery is how much money is left on the table.
Federal agencies and departments have announced preliminary allocations for roughly two-thirds of the $145.4 billion dedicated to climate efforts through the Inflation Reduction Act, according to information maintained by the White House. But the Biden administration has not accounted for how much of that money it has formally committed or obligated — a number that could be crucial to the coming GOP debate over how much of the law should be repealed.
The Environmental Protection Agency previously told POLITICO’s E&E News that as of Oct. 22, it has obligated $33.5 billion, or 80 percent of the $42.1 billion in IRA credits. The Interior Department’s Bureau of Reclamation has obligated $1.1 billion of its $4.6 billion share of climate law money, according to data it posts online.
But few other agencies have provided a comprehensive overview of the IRA dollars that could be safe from Trump’s promised efforts to recover them.
On the same day that Trump won a second term, the two federal agencies that have received the most funding under the IRA declined to share new information about their obligations to taxpayer money. Instead, they referred questions to the White House, which also did not provide figures on obligations under the law.
No government agency offers data that provides an easy way to break down all mandatory IRA dollars. Instead, the White House is providing figures for how much of the spending the administration has announced — a broader category that includes money that a future regime could easily pause or change.
The White House said this week that $98 billion in award announcements has gone to recipients.
In the months leading up to last week’s election, POLITICO contacted every agency that received appropriations from the climate law. Only some of these were able to provide a partial or full breakdown of their expenses and liabilities.
But administration officials say they are working hard to announce and mandate funding before President Joe Biden’s term ends.
“Of the grants and other dollars in different parts of our investment agenda, about 9 of every 10 dollars have been injected into the economy or competed to make an impact,” White House national climate adviser Ali Zaidi told reporters. last month. “We will review the tape to ensure that impact reaches as many American people as possible.”
The leader of a clean energy policy group also expressed optimism about Biden’s prospects of committing the rest of the money before Inauguration Day.
“The momentum is on the side of continuing to spend money,” said Lindsey Baxter Griffith, the founder and CEO of Clean Tomorrow.
Trump, meanwhile, has vowed to withdraw all “unspent” funds from the IRA, denouncing the law as a “scam” that would send American jobs to China. He did not specify which programs he would focus on.
The law is one of four major Biden-era spending packages that approved an estimated $1.6 trillion in tax credits and credits for infrastructure, technology and clean energy projects in the United States — with the IRA alone expected to provide about 160,000 will create jobs by encouraging private investment. investments in the manufacturing sector.
Now Republicans could use portions of the IRA’s unspent money to help pay for a fraction of the trillions of dollars in tax cuts Trump is proposing.
Biden’s agencies and departments have announced preliminary allocations for about 67 percent of the IRA’s $145.4 billion in total climate credits, or 88 percent of the credits the administration is tracking. The latter figure excludes some funds that became available after the previous fiscal year ended on September 30, certain loan programs and internal government spending, the White House said. These announcements include money that the government says it wants to spend.
Funding experts previously told POLITICO that obligated money — dollars that agencies have legally committed to disbursing — would likely be safer from interference if Trump’s appointees tried to cut off cash flow.
White House officials argue that as long as the IRA is the law of the land, Trump would be legally obligated to continue spending its funding in the manner Congress directs. However, Trump has claimed that a 1974 law requiring presidents to spend appropriated money is unconstitutional.
The question of how Biden’s spending programs can be tested by Trump has become urgent for Democrats.
“Everyone is concerned about that,” Kate Gordon, a former senior adviser to Energy Secretary Jennifer Granholm, said last month. “I don’t worry about it once it’s contracted, but I definitely worry about it before it’s contracted. Getting money out the door is critical.”
Gordon, who is now CEO of California Forward, a nonprofit statewide economic development organization, said companies rely on the contracts to make investment decisions, making it an important step in the award process.
“Once you start relying on these contracts and they’re in print, it’s extremely difficult from a legal perspective to go back on them,” she said.
Some of the money has a limited shelf life even without Trump’s intervention: At least $51.5 billion, or more than a third of IRA credits, will expire under the next administration, according to a POLITICO analysis of the law guide from the White House.
Other funding, such as the EPA’s $27 billion Greenhouse Gas Reduction Fund, had to be mandated into law by September 30.
The majority of the EPA’s obligations under the IRA come from this fund, which is intended to finance green projects across the country. Republicans in the House of Representatives have derided that pot of money as a “slush fund” and accused it of funneling taxpayer money to radical environmental groups.
The agency has committed roughly 43 percent of the remaining remaining appropriations to programs largely intended to reduce air pollution and increase climate resilience.
“All we can say at this time is that EPA plans to mandate nearly all IRA investments by the end of the calendar year,” Nate Hitchings, the agency’s strategic communications advisor for implementation, said in an e-mail mail.
In August, on the second anniversary of the signing of the IRA, the EPA said it was on track to enforce nearly $38.3 billion in obligations by the end of 2024.
Others have moved more slowly. One program under the Department of the Interior, intended to improve access to water in underserved communities, has obligated less than 0.1 percent of its $550 million in IRA appropriations, according to Bureau of Reclamation data. Another program, intended to provide $12.5 million in drought relief for tribes, has mandated $0.
In addition to the climate law’s funding for grants and loans, the IRA also provides an estimated $527 billion in tax breaks, largely aimed at promoting clean energy technologies, according to a 2023 analysis by the Committee for a Responsible Federal Budget.
These credits have helped fuel billions in announced investments in the industry since the IRA passed, most of which will end up in districts represented by Republicans, according to a POLITICO analysis of data from policy research firm Atlas Public Policy. But even the future of tax credits under a Republican administration remains unclear.
Republican lawmakers have voted more than 50 times to repeal all or part of the IRA, although some Republican lawmakers argue in favor of keeping some of the appropriations.
Should some of Biden’s funding be withdrawn, it could significantly impact projects planning to build in the US, including projects aimed at making advanced batteries and electric vehicles.
“If Trump is successful in fully repealing the IRA, it can and will halt massive factory and EV factory projects,” Alex Kosyakov, co-founder and CEO of solid-state battery startup Natrion, said in an email.
Kosyakov pointed to companies that had announced plans to build large production capacity with support from the Energy Department, which would have no viable business case if the IRA were to disappear.
“The risk is very real for companies like this,” Kosyakov said.
Jean Chemnick contributed to this report.
