Trump vows to pull back climate law’s unspent dollars

Donald Trump announced on Thursday that he would eliminate any "unspent" funds from the Inflation Reduction Act (IRA) if elected in November, a move that could significantly impact the climate law and its benefits to Republican-led communities.

Speaking before the Economic Club of New York, Trump criticized President Biden’s climate agenda, labeling it a “waste” and referring to the Green New Deal as the “Green New Scam.” He promised to “rescind all unspent funds under the misnamed Inflation Reduction Act.”

Trump’s commitment to dismantling the climate law heightens the pressure on the Biden administration to expedite the distribution of IRA funds. This move also intensifies the debate among Republicans about how to handle the law, which is currently channeling investment into GOP districts.

Trump did not detail which IRA programs he would target. While some Republicans have criticized the law’s funding for green initiatives, others support maintaining certain IRA tax credits for manufacturing. Robert Lighthizer, Trump’s former trade adviser, has suggested that some provisions supporting U.S. factories might remain under a second Trump term.

The Biden administration has announced billions in IRA funding for clean energy projects. However, the exact amount of funding already obligated or spent remains unclear, which could complicate Trump’s efforts to reclaim these funds.

A POLITICO analysis earlier this year highlighted the challenge for the Biden administration in managing these direct funding programs. As of April, out of $145 billion allocated for energy and climate programs under the IRA, roughly $60 billion had been tentatively allocated. While this figure has increased, many funding decisions still need to meet specific criteria before funds are formally disbursed.

On Thursday, former President Donald Trump unveiled a plan to establish a government efficiency commission, an idea proposed by Tesla’s Elon Musk, whom Trump has increasingly supported. Trump suggested that Musk could lead this new commission.

Trump also announced his intention to issue a national emergency declaration to boost domestic energy production and reiterated his criticism of Vice President Kamala Harris, accusing her of waging a “war” on U.S. energy despite record oil production under the Biden administration.

The Inflation Reduction Act (IRA) primarily achieves its emissions reductions through a broad array of new and expanded tax credits for clean energy technologies. Repealing these credits would require congressional action, separate from the direct spending for grants and loans provided by the law.

The IRA includes grant programs aimed at reducing methane emissions, improving energy efficiency, and establishing green banks nationwide, some of which have already faced criticism from Republicans. The law also increases funding for a loan office under the Energy Department, which has expanded under Biden but slowed during Trump's previous administration.

For Democrats, the stakes are high. If Trump is elected, his administration could significantly slow down or reallocate IRA spending. Trump has promised to reinstate presidential authority to withhold congressionally approved funds he deems wasteful.

Trump's proposed efficiency commission would conduct a “complete financial and performance audit” of the federal government and recommend “drastic reforms” to eliminate “fraud and improper payments” within six months. This could impact major IRA programs beyond just climate and energy initiatives. 

The IRA also includes provisions for health care and tax reform. A report from the U.S. Treasury Inspector General for Tax Administration in March revealed that the IRS had spent about 10 percent of its $57.8 billion IRA allocation.

Musk has reportedly agreed to lead the proposed task force, stating on X that he is willing to serve without pay, title, or recognition.

A Trump campaign spokesperson did not immediately provide further details. However, Trump has consistently criticized what he considers wasteful government spending under Biden, attributing rising inflation and energy costs to these expenditures. He has vowed to redirect unspent funds to essential infrastructure projects and eliminate “meaningless Green New Scam ideas.”

Trump claimed his plan would “cut energy prices in half or more within 12 months” and increase oil production fourfold. He also pledged to expedite approvals for new drilling, pipelines, refineries, and power plants, and to boost U.S. production of rare earth minerals critical for clean energy technologies. Additionally, Trump promised to eliminate “a minimum of 10 old regulations” for every new regulation introduced.

“This will be an economic revival like no one has ever seen before,” Trump declared.

In response, the Harris campaign issued a memo criticizing Trump’s proposals, arguing they would harm the economy, undermine job growth, increase inflation, expand the national debt, and raise taxes on the middle class.

Trump also emphasized his focus on restoring domestic manufacturing, which the IRA supports through tax credits and incentives. The law has already led to billions in planned U.S. manufacturing investments, mostly in GOP-held districts.

Repealing IRA tax credits would require congressional action. Republicans are considering renewing Trump’s 2017 tax law, with IRA provisions potentially serving as a funding source. Despite some Republicans seeking to repeal IRA credits and programs, others have advocated for protecting the investments in their districts.

Treasury Secretary Janet Yellen, speaking in Raleigh, North Carolina, on Thursday, warned that rolling back the IRA’s tax provisions would be “a historic mistake,” increasing costs for families and potentially giving China and other competitors an advantage in the clean energy sector.