Search anytime by typing below

Thanks for joining the AEA efforts to help combat rising energy prices. We don’t want to bug you that often, so let us know what energy issues interest you, and we’ll keep your inbox happy.

*Please fill in all items

Federal EV tax credit: unnecessary, inefficient, unpopular, costly, and unfair

October 9, 2019 by 19 Comments

In April, Senator Debbie Stabenow (D-MI) introduced the Drive America Forward Act, a bill that would expand the tax credit for new plug-in electric vehicles (EVs) by allowing an additional 400,000 vehicles per manufacturer to be eligible for a credit of up to $7,000. Currently, the tax credit is worth up to$7,500 until a manufacturer sells more than 200,000 vehicles. In late September, groups that stand to benefit from the extension of the federal tax credits wrote to Senator McConnell and other leaders in Congress, encouraging them to support on the Drive America Forward Act. As IER has documented in the past, lawmakers should not extend the EV tax credit as the policy is unnecessary, inefficient, unpopular, costly, and unfair.

Unnecessary and inefficient

The EV tax credit is not necessary to support an electric vehicle market in the U.S. as one group estimates that 70 percent of EV owners would have purchased their vehicle without receiving a subsidy, which is reasonable seeing as 78 percent of credits go to households making more than $100,000 a year.  Furthermore, the federal tax credit overlaps with a number of other government privileges for EVs, including:

  • State rebates and/or other favors (reduced registration fees, carpool-lane access, etc.) in California, as well as in 44 other states and the District of Columbia.
  • Tax credits for infrastructure investment, a federal program that began in 2005 and, after six extensions, expired in 2017.
  • Federal R&D for “sustainable transportation,” mainly to reduce battery costs, averaging almost $700 million per year.
  • Credit for EV sales for automakers to meet their corporate fuel economy (CAFE) obligations.
  • Mandates in California and a dozen other states for automakers to sell Zero-Emission Vehicles—a quota in addition to subsidies.

Even if the federal tax credits were needed to support demand for EVs, the extension of the tax credit would be an absurdly inefficient means of achieving the stated goal of the policy, which is ostensibly to lower carbon emissions. The Manhattan Institute found that electric vehicles will reduce energy-related U.S. carbon dioxide emissions by less than 1 percent by 2050.

Unpopular

Lawmakers should be aware that the vast majority of people do not support subsidizing electric vehicle purchases. The American Energy Alliance recently released the results of surveys that examine the sentiments of likely voters about tax credits for electric vehicles. The surveys were administered to 800 likely voters statewide in each of three states (ME, MI and ND). The margin of error for the results in each state is 3.5 percent.

The findings include:

  • Voters don’t think they should pay for other people’s car purchases. In every state, overwhelming majorities (70 percent or more) said that while electric cars might be a good choice for some, those purchases should not be paid for by other consumers.
  • As always, few voters (less than 1/5 in all three states) trust the federal government to make decisions about what kinds of cars should be subsidized or mandated.
  • Voters’ sentiments about paying for others’ electric vehicles are especially sharp when they learn that those who purchase electric vehicles are, for the most part, wealthy and/or from California.
  • There is almost no willingness to pay for electric vehicle car purchases. When asked how much they would be willing to pay each year to support the purchase of electric vehicles by other consumers, the most popular answer in each state (by 70 percent or more) was “nothing.”

The full details of the survey can be found here.

Costly and unfair

Most importantly, an extension of the federal EV tax credit is unfair as the policy concentrates and directs benefits to wealthy individuals that are predominantly located in one geographic area, namely California. A breakdown of each state’s share of the EV tax credit is displayed in the map below:

In 2018, over 46 percent of new electric vehicle sales were made in California alone. Given that California represents only about 12 percent of the U.S. car market, this disparity means that the other 49 states are subsidizing expensive cars for Californians.  However, in order to understand the full extent of the benefits that people in California are receiving, some further explanation is in order.

When governments enact tax credit programs that favor special businesses without reducing spending, the overall impact is parallel to a direct subsidy as the costs of covering the tax liability shift to the American taxpayer or are subsumed in the national debt (future taxpayers). California offers a number of additional incentives on top of the federal tax credit for electric vehicles that are also driving demand for EVs in the state. These incentives include an additional purchase rebate of up to $7,000 through the Clean Vehicle Rebate Project, privileged access to high-occupancy vehicle lanes, and significant public spending on the infrastructure needed to support EVs. Therefore, the additional incentives that California (and other states) offer to promote EVs have broader impacts as these policies incentivize more people to make use of the federal tax credit, passing their costs on to American taxpayers. In other words, you’re not avoiding the costs of California’s EV policies by not living in California.

This problem is made even worse when we consider the impact of zero-emission vehicle (ZEV) regulations, which require manufacturers to offer for sale specific numbers of zero-emission vehicles. As recently as 2017, auto producers have been producing EVs at a loss in order to meet these standards, and they have been passing the costs on to their other consumers. This was made apparent in 2015 by Bob Lutz, the former Executive Vice President of Chrysler and former Vice-Chairman of GM, said:

“I don’t know if anybody noticed, but full-size sport-utilities used to be — just a few years ago used to be $42,000, all in, fully equipped. You can’t touch a Chevy Tahoe for under about $65,000 now. Yukons are in the $70,000. The Escalade comfortably hits $100,000. Three or four years ago they were about $60,000. What this is, is companies trying to recover what they’re losing at the other end with what I call compliance vehicles, which are Chevy Volts, Bolts, plug-in Cadillacs and fuel cell vehicles.”

Fiat Chrysler paid $600 million for ZEV compliance credits in 2015 (plus an unknown amount of losses on their EV sales), and sold 2.2 million vehicles, indicating Fiat Chrysler internal combustion engine (ICE) buyers paid a hidden tax of approximately $272 per vehicle to subsidize wealthy EV byers. ICE buyers were 99.3 percent of U.S. vehicle purchases in 2015. So, even if half the credits purchased were for hybrids, each EV sold in 2015 was subsidized by more than $13,000 in ZEV credit sales, in addition to all of the other federal, state, and local subsidies.

As is typical with most policies that benefit a politically privileged group, the plan to extend the federal tax credit program comes with tremendous costs, which are likely being compounded by people abusing the policy.  One estimate found that the overall costs of the Drive America Forward Act would be roughly $15.7 billion over 10 years and would range from $23,000 to $33,900 for each additional EV purchase under the expanded tax credit. Seeing as the costs of monitoring and enforcing the eligibility requirements of the EV tax credit program are not zero, it should surprise no one that the program has been abused as it has recently come to light that thousands of auto buyers may have improperly claimed more than $70 million in tax credits for purchases of new plug-in EVs. Finally, additional concerns arise over the equity of the federal EV tax credit due to the fact that half of EV tax credits are claimed by corporations, not individuals. 

End this charade

When the tax credit was first adopted, politicians assured us that the purpose of the program was to help launch the EV market in the U.S. and that the tax credit would remain capped at the current limit of 200,000 vehicles. At that time, we warned that once this program was in place, politicians would continue to extend the cap in order to appease the demands of manufacturers and other political constituencies that were created by the program. A decade later, we find ourselves in that exact situation. At this point, it should be clear that Congress should not expand the federal EV tax credit as the program is nothing more than an extension of special privileges to wealthy individuals and corporations that are mostly located in California. If Congress can’t find the courage to put an end to such an unfair and inefficient policy, President Trump should not hesitate to veto any legislation that extends the federal EV tax credit, as doing so would be consistent with his approach to other energy issues such as CAFE reform.

Filed Under: Blog, Electric Vehicles Tagged With: , , , , , , , ,

AEA to Senate: Highway Bill is Highway Robbery

July 30, 2019 by Leave a Comment

WASHINGTON DC (July 30, 2019) – Today, Thomas Pyle, President of the American Energy Alliance, issued a letter to Senate Environment and Public Works Committee Chairman John Barrasso highlighting concerns about the recently introduced America’s Transportation Infrastructure Act. Included in the legislation is an unjustified, $1 billion handout to special interests in the form of charging stations for electric vehicles.  AEA maintains that provisions like this are nearly impossible to reverse in the future and create a regressive, unnecessary, and duplicative giveaway program to the wealthiest vehicle owners in the United States. 
 
Read the text of the letter below:
 

Chairman Barrasso,

The Senate Committee on Environment and Public Works is scheduled to consider the reauthorization of the highway bill and the Highway Trust Fund today.  At least some part of this consideration will include provisions that provide for $1 billion in federal grants for electric vehicle charging infrastructure.  This is among $10 billion in new spending included in a “climate change” subtitle.  All of this new spending is to be siphoned away from the Highway Trust Fund (HTF), meant to provide funding for the construction and maintenance of our nation’s roads and bridges.  The HTF already consistently runs out of money, a situation that will only be exacerbated by these new spending programs.

We oppose this new federal program for EV infrastructure for a number of reasons, including, but not limited to the following:

  • The grant program, once established in the HTF, will never be removed.  Our experience with other, non-highway spending in the trust fund (transit, bicycles, etc.) is that once it is given access to the trust fund, the access is never revoked.  Our nation’s highway infrastructure already rates poorly in significant part due to the diversion of highway funds to non-highway spending.
  • As we have noted elsewhere, federal support for electric vehicles provides economic advantages to upper income individuals at the expense of those in middle and lower income quintiles.  This grant program would exacerbate that problem.
  • This program will result in taxpayers in States with few electric vehicles or little desire for electric vehicles having their tax dollars redirected from the roads they actually use to subsidize electric vehicle owners in States like California and New York.
  • This program is duplicative.  There is already a loan program within DOE that allows companies and States to get taxpayer dollars to subsidize wealthy electric vehicle owners.

For these and other reasons, we oppose the provisions that would create a regressive, unnecessary, and duplicative giveaway program to wealthy, mostly coastal electric vehicle owners.  This giveaway not only redirects taxpayer money from the many States to the few, in looting the Highway Trust Fund it also leaves those many States, including Wyoming, with less money to maintain their own extensive road networks.


Sincerely,

Thomas J. Pyle

Filed Under: Press Releases Tagged With: , , , , , , ,

What’s In The Senate Version Of The Big Beautiful Bill?

July 3, 2025 by Leave a Comment

The Senate has passed its version of President Trump’s big beautiful bill (BBB), which maintains tax credits for hydrogen, carbon capture, nuclear energy, and geothermal, boosts onshore and offshore drilling, weakens fuel economy regulations, delays a methane emissions fee, and speeds up environmental reviews for paying companies, but makes less funds available for refilling the Strategic Petroleum Reserve than the House version. The Senate removed a proposed excise tax on wind and solar projects, which was to be levied based on their compliance with strict sourcing requirements. It also phases out wind and solar tax credits that the Inflation Reduction Act of 2022 (IRA) had expanded. Wind and solar projects would still be eligible for tax credits as long as they begin construction by June 2026 or are placed in service by the end of 2027. The “start construction” language was added when it passed on July 1 and provides the subsidy to projects that have gone through planning, finance or other early “construction” steps, but may not be ready to produce power by the end of 2027.

The House provision that requires energy facilities to be placed in service by 2027 to qualify for wind and solar subsidies would have meant the end of Biden’s Green New Scam during Trump’s term, but the “start construction” clause that was added allows any facility that meets the lax “in construction” standard to receive an extra four years to qualify for 10 years of subsidies. If the Senate version passes, the Treasury Department could provide language that reduces the four-year safe harbor and makes the “in construction” requirement stricter by, for instance, requiring continuous construction rather than just beginning construction.

Other Energy Provisions in the Senate Version of the BBB

Electric vehicle tax credits would end at the end of September, which would have allowed car owners to lower the purchase price of electric vehicles by as much as $7,500. Credits for charging infrastructure would end in June 2026. A tax incentive for metallurgical coal and a credit for nuclear energy facilities built in areas with large nuclear power employment would be created. The Senate legislation would also mandate more onshore and offshore drilling, zero out penalties for fuel economy standards, and delay the fee on methane leaks from oil and gas production that was in Biden’s IRA for 10 years. It would also accelerate National Environmental Policy Act reviews for companies that pay a fee, but other permitting provisions in the House version were cut from the bill.

The Senate bill cut the amount of money for oil purchases to replenish the Strategic Petroleum Reserve (SPR) to $171 million from $1.3 billion in the House bill, which is only enough to buy about 3 million barrels instead of 20 million barrels at today’s prices. Former President Joe Biden conducted several sales from the SPR, including 180 million barrels, the most ever, to keep oil and thus gasoline prices low during the mid-term election in 2022. Those sales left the SPR at its lowest level in 40 years. Biden had scheduled 15.8 million barrels of deliveries to the SPR from January through May, but only 8.8 million of that has been delivered due to maintenance on the reserve that the Biden administration knew was needed. The Senate kept a House measure to cancel seven million barrels in congressionally-mandated SPR sales. The SPR has almost 403 million barrels, 45% less than the 727 million barrels it held in 2009.

One of the Senate’s versions of the BBB would have imposed an excise tax on wind and solar projects completed after December 31, 2027, if they could not prove that they do not contain any Chinese components. It targeted projects that use rare earth minerals from “Foreign Entities of Concern” — countries or companies deemed problematic. This provision primarily affects rare earths from China, which has a near monopoly on these minerals. Global supply chains for wind and solar components rely almost entirely on Chinese rare earth minerals. Thus, to avoid the tax, developers would have had to demonstrate that their solar and wind projects do not violate material assistance rules, which is likely to have been impossible to demonstrate.

An amendment to the bill was offered by Iowa Senator Joni Ernst that would allow projects that begin construction over the next few years to receive at least a partial tax credit, rather than allowing the credit for only projects that begin producing electricity in the next few years. The Ernst amendment also removed the excise tax on future solar and wind projects if they contain Chinese components. According to the Energy Information Administration, Iowa ranks first in generating the largest share of power from wind among U.S. states.

Conclusion

The Senate has passed a version of the Big Beautiful Bill that maintains tax credits for hydrogen, carbon capture, nuclear energy, and geothermal, boosts onshore and offshore drilling, weakens fuel economy regulations, delays a methane emissions fee, and speeds up environmental reviews for paying companies, but makes less funds available for refilling the Strategic Petroleum Reserve than the House version. The Senate bill phases out wind and solar tax credits that had been broadened by Biden’s Inflation Reduction Act of 2022, but it is less stringent than the House bill. Wind and solar projects would still be able to get tax credits as long as they start construction by June 2026 or are placed in service by the end of 2027. The Senate bill removed a proposed excise tax on wind and solar projects, which was to be levied based on their compliance with strict sourcing requirements, affecting rare earths obtained from “Foreign Entities of Concern,” such as China.

*This article was adapted from content originally published by the Institute for Energy Research.

Filed Under: Blog Tagged With: , , , , , , , ,

Big Beautiful Bill Headed to President’s Desk

July 3, 2025 by Leave a Comment

WASHINGTON DC (7/3/25) – The U.S. House of Representatives gave final passage to H.R.1, the One Big Beautiful Bill Act, today. This legislation now heads to the President’s desk for his signature.

Significant provisions of the bill include:

  • Permanently extends the Tax Cuts and Jobs Act
  • Repeals the electric vehicle tax credit
  • Places significant restrictions on the energy subsidies embedded in the Inflation Reduction Act
  • Rescinds unobligated Inflation Reduction Act funds
  • Repeals the Greenhouse Gas Reduction Fund
  • Pauses the IRA natural gas tax for a decade
  • Requires the Bureau of Land Management to hold quarterly leases
  • Reduces royalty rates to pre-Inflation Reduction Act levels

American Energy Alliance President Tom Pyle released the following statement:

“We commend Congress for passing this legislation and look forward to President Trump’s signature. With this bill’s passage, Congress is delivering much-needed tax relief to millions of working families and goes a long way towards putting an end to the misguided Biden-era IRA, which has made our energy more expensive and less reliable.  

“Eliminating the EV tax credit marks a major win for those of us who have been advocating for years that consumer choice—not government mandates—should shape the American auto market. Congress deserves praise for ending these subsidies, which were largely out of step with the priorities of the American people. The measure also creates new opportunities for energy production on federal lands and stops the flow of federal dollars to green special interest groups.  

“And while the bill fell short of fully repealing the IRA, it does end solar and wind subsidies after a 2027 ‘placed in service’ cutoff. Unfortunately, the bill includes a loophole as projects committing 5% of costs within 12 months qualify as ‘under construction’ and get a 4-year extension. This enables projects started by July 2026 to receive subsidies through July 2030, and many lasting an additional 10 years. The Trump administration should limit this by tightening Treasury rules—shortening the safe harbor and requiring continuous construction, not just initial construction–to ensure the solar and wind lobby don’t continue to game the system at taxpayer expense.”

AEA Experts Available For Interview On This Topic:

Additional Background Resources From AEA:

For media inquiries please contact:
[email protected]

Filed Under: Press Releases Tagged With: , , , , , ,

The Unregulated Podcast #236: I’ll Handle the Finances 

July 2, 2025 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna cover the latest news from President Trump’s One Big Beautiful Bill and what it means for the future of Biden’s Green New Scam.

Links:

Stay Connected With The Show:

Filed Under: Podcast Tagged With: ,

AEA Calls on House of Representatives to Remain Firm on Ending the Green New Deal

July 1, 2025 by Leave a Comment

WASHINGTON DC (07/01/2025) – This morning, the U.S. Senate passed H.R.1, the One Big Beautiful Bill Act. The vote was 51-50, with Vice President J.D. Vance casting the tie-breaking vote. The bill will now return to the House of Representatives where a vote is expected on Wednesday.

Notably, the final Senate version of the bill grants a full tax credit to wind and solar projects that start construction within one year of the law’s enactment, without setting a deadline for when they must be connected to the grid. Projects that begin construction after that one-year window must be placed in service by the end of 2027 to qualify for the credit.

American Energy Alliance President Tom Pyle released the following statement:

“We recognize and commend Congress for taking the initial steps to scale back excessive government support for costly and unreliable energy sources. The Senate’s version of H.R. 1 reins in some of the more damaging energy provisions from the Inflation Reduction Act (IRA). However, serious concerns remain about the bill’s structure—especially the risk of loopholes that could undermine the promised phaseout of wind and solar subsidy programs.

“We urge the House not to rush this process to meet an arbitrary July 4th deadline as lawmakers have a crucial opportunity to reinforce America’s commitment to free markets and dependable energy. Before this bill reaches the president’s desk, it must fully dismantle the framework of the Green New Deal.”

AEA Experts Available For Interview On This Topic:

Additional Background Resources From AEA:

For media inquiries please contact:
[email protected]

Filed Under: Press Releases Tagged With: , , , , , , ,

AEA and CEI Joint Letter to the Senate on Passing IRA Subsidy Reform Through the One Big Beautiful Bill

July 1, 2025 by Leave a Comment

On Monday, June 30th the American Energy Alliance, along with the Competitive Enterprise Institute, sent a joint letter to the Senate urging senators to uphold President Trump’s campaign commitment to eliminate all remaining energy subsidies from the Inflation Reduction Act (IRA), which he aptly has called the “Green New Scam.” The text of the letter is available below.

Dear Senator:

In 2022, Democrats passed a radical plan to change how Americans use and consume energy. This plan was contained in the Inflation Reduction Act (IRA), a reconciliation bill that did not get a single Republican vote in the House or Senate.

Republicans and other lawmakers concerned about energy affordability and reliability now have a chance to undo the numerous IRA provisions that advance this radical Green New Deal agenda. Quite simply, the only way to undo the Green New Deal is to dismantle the “green” subsidies within the IRA.

Our organizations sought stronger language to undo the IRA subsidies than what is in the current Senate reconciliation bill (H.R. 1). However, we recognize that the existing language reflects compromise to get the One Big Beautiful Bill across the finish line. It may not be ideal, but the language is a strong effort to undo what President Trump rightly calls the “Green New Scam,” and for that, lawmakers should be commended.

Unfortunately, some Senators want to weaken the text in the Senate bill by undermining efforts to dismantle the IRA subsidies such as the requirement that projects be “placed in service” by the end of 2027 in order to qualify for certain tax credits. This is unacceptable and we strongly encourage you to reject any amendment that weakens the existing IRA related language in the most recent Senate draft.

These subsidies, among other problems, would continue to force our country towards a mix of unreliable sources of electricity (e.g. wind and solar) that would severely threaten our nation’s electricity grid. Americans need reliable and affordable electricity, not handouts to special interests at the expense of the electricity needs of Americans.

For once, the interests of Americans appear to be taking priority over the interests of the swamp. We encourage you to ensure that this does not change. This can only happen if Senators reject amendments that weaken the current language in H.R. 1.

Sincerely,

Daren Bakst
Director, Center for Energy and Environment
Competitive Enterprise Institute

Thomas Pyle
President
American Energy Alliance

View Full Letter as a PDF
Filed Under: Blog Tagged With: , , , , , ,

Senate’s Version of Big Beautiful Bill Vastly Improved, Needs Some Clarity

June 28, 2025 by Leave a Comment

WASHINGTON, DC (6/28/25) – The Senate may begin voting as soon as today on a revised version of H.R.1, the One Big Beautiful Bill Act. In May, the House passed this legislation, prioritizing energy security and affordability by eliminating most of the costly green energy subsidies and wasteful green grants to outside organizations.

American Energy Alliance President Tom Pyle released the following statement:

“The Senate version of the Big Beautiful Bill released today, while falling short of the House-passed bill, is vastly improved from a previously released version. Compared to the House, the Senate version extends the sunset timelines on wind and solar subsidies and leaves some questions with respect to the foreign entity and transferability provisions. These will still need to be answered. Nonetheless, we applaud the Senate for moving in the right direction, especially for terminating the electric vehicle tax credits.

“If, as supporters of the IRA are complaining, repealing these subsidies will ‘kill’ their industry, then maybe it shouldn’t exist in the first place. Extending green giveaways on the backs of American taxpayers is shortsighted and neglectful. It’s time for Congress to deliver both energy reliability and the largest tax cut in history to President Trump and the American people.”

AEA Experts Available for Interview on This Topic:

Additional Background Resources:

For media inquiries please contact:
[email protected]

Filed Under: Press Releases Tagged With: , , , , , , ,

AEA Launches Six-Figure Advocacy Initiative: End the IRA Credits in the One Big Beautiful Bill

June 24, 2025 by Leave a Comment

WASHINGTON DC (6/24/25) – Today, the American Energy Alliance launched a six-figure advocacy initiative in Utah, Alaska, Idaho, and the District of Columbia. The ads target key Senators in the debate over eliminating the Inflation Reduction Act’s (IRA) energy subsidies in the reconciliation bill.

In May, the House passed the “Big, Beautiful” reconciliation bill, prioritizing energy security and affordability by eliminating most of the costly green energy subsidies and wasteful green grants to outside organizations. While it falls short of full repeal of the egregious IRA subsidies, it does dismantle numerous Biden-era climate and energy programs. These programs are projected to cost taxpayers between $936 billion and $1.97 trillion over the next decade, with potential liabilities reaching up to $4.7 trillion by 2050.

As the Senate takes up this legislation, Senators John Curtis (R-Utah) and Lisa Murkowski (R-Alaska) are working to maintain these subsidy programs despite their initial opposition to the Inflation Reduction Act in 2022.

Additional ads praise Senator Mike Lee (R-Utah) for his leadership in fully eliminating the subsidies and urge Senator Mike Crapo (R-Idaho), the Chairman of the Senate Finance Committee, to use his leadership role to fight to eliminate these costly subsidy programs.

AEA President Tom Pyle issued the following statement:

“The American people were sold a bill of goods with the Inflation Reduction Act — a trillion-dollar boondoggle of subsidies and handouts for special interests under the guise of climate policy.

“We applaud the House for taking a stand and urge the Senate to finish the job. Lawmakers like Senators Lee and Crapo understand that real energy security means ending reckless spending and restoring market-driven solutions to our nation’s energy challenges.

“Senators Curtis and Murkowski both opposed the original IRA because they knew it would lead to higher energy prices and compromise the reliability of the energy grid in their state. So why are they now working so hard to preserve these costly and unnecessary programs? 

“It’s time for the Senate to put taxpayers first and dismantle the IRA’s green subsidy machine.”

AEA Experts Available For Interview On This Topic:

Additional Background Resources From AEA:

For media inquiries please contact:
[email protected]

Filed Under: Press Releases Tagged With: , , , , , , , , , , ,

Coalition Letter to President Trump: Don’t Let Congress Preserve the Green New Scam

June 23, 2025 by Leave a Comment

On Monday, June 23rd a coalition of twenty-six individuals and organizations dedicated to preserving free markets and putting taxpayers and consumers first, led by the American Energy Alliance, sent a letter to President Trump urging him to encourage Congress to uphold his campaign commitment to eliminate all remaining energy subsidies from the Inflation Reduction Act (IRA), which he aptly has called the “Green New Scam.” The text of the letter and list of signers is available below.

June 23, 2025

The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear President Trump:

As part of your commitment to achieving American energy dominance, you promised to eliminate burdensome regulations and put an end to the Inflation Reduction Act (IRA), which you aptly identified as the “Green New Scam.” While your administration has made significant progress toward this goal, much of the work necessary to fulfill your campaign promise involves eliminating ALL of the Biden-era energy subsidies in the One Big Beautiful Bill.

The House of Representatives has gone a long way. While not completely phasing out the entire IRA, the recently passed H.R. 1 significantly amends most of the credits by accelerating the phase-outs to completely expire before you leave office, places tighter restrictions on prohibited foreign entities, and repeals the transferability of many of the credits. 

Unfortunately, the working draft of the Senate bill falls considerably short. While the overall structure aligns with the House, several energy-related provisions represent notable setbacks. Unlike the House version – which imposed strict deadlines for green energy projects – the Senate draft extends eligibility. Projects that commence construction by 2027 now benefit from a four-year “safe harbor,” making them eligible for tax credits through 2031. Because the Production Tax Credit (PTC) lasts for 10 years, wind and solar projects could receive federal subsidies through 2040 – well beyond your term in office. It also alters the House’s strong definition of prohibited foreign entities, essentially allowing for more foreign ownership by those involved in projects. Finally, it retains the electric vehicle tax credit for certain manufacturers. 

More troublesome, we have seen reports that some senators would like to weaken the House provisions even further than what is already in the working draft.

History shows long phase-outs are really extensions of bad policies that raise electricity prices and threaten to destabilize the grid. Take the wind production tax credit (PTC), for example. Originally set to expire in 1999, it has been extended repeatedly—in 1999, 2002, 2004, 2005, 2006, 2008, 2009, 2012, 2014, 2015, 2016, 2019, and again in 2021. A phase-down was introduced in 2016, reducing the credit’s value gradually over five years, yet the IRA revived and expanded the PTC once more. This clearly demonstrates that phasing down subsidies often leads to repeated extensions rather than true elimination.

We urge you to call on your Republican colleagues in Congress, particularly in the Senate, to repeal all of the IRA’s energy tax credits immediately—not rely on slow and uncertain phase-outs that history shows are unlikely to succeed. At the very least, the Senate should not weaken the strong language that has already passed the House of Representatives. It’s time for Congress to pass the One Big Beautiful bill to create jobs and grow the economy for American families and deliver on your promise to end former President Biden’s Green New Scam.

Sincerely,

Thomas Pyle
President
American Energy Alliance

Phil Kerpen
President
American Commitment

Carla Sands
U.S. Ambassador to the Kingdom of Denmark (ret.)

Daren Bakst
Director, Center for Energy and Environment
Competitive Enterprise Institute

Marlo Lewis
Senior Fellow, Energy and Environmental Policy
Competitive Enterprise Institute

David Stevenson
Director, Center for Energy and Environment
Caesar Rodney Institute

Paul Gessing
President
Rio Grande Foundation

Seton Motley
President
Less Government

Andre Beliveau
Senior Manager of Energy Policy
Commonwealth Foundation

Diana Furchtgott-Roth
Director, Center for Energy, Climate, and Environment
Heritage Foundation

Derrick Max
President and CEO
Thomas Jefferson Institute for Public Policy

Cameron Sholty
Government Relations Director
Heartland Impact

Paul Craney
President
Massachusetts Fiscal Alliance

John Droz
Physicist
Alliance for Wise Energy Decisions

Craig Richardson
President
Energy & Environment Legal Institute

Daniel C. Turner
Founder & Executive Director
Power The Future

Frank Lasee
President
Truth in Energy and Climate

Rea S. Hederman Jr.
Vice President of Policy
Buckeye Institute

James Taylor
President
The Heartland Institute

E. Calvin Beisner, Ph.D.
President
Cornwall Alliance for the Stewardship of Creation

Myron Ebell
Chairman
American Lands Council

Sarah Montalbano
Policy Fellow
Center of the American Experiment

Jenny Beth Martin
Honorary Chairman
Tea Party Patriots Action

Amy O. Cooke
President and Chairman of the Board
Always On Energy Research

Jason Hayes
Director of Energy & Environmental Policy
The Mackinac Center for Public Policy

Benjamin Zycher
Senior Fellow
American Enterprise Institute
(Affiliation for identification purposes only)

CC:

Senate Majority Leader John Thune
United States Senate SD-511
Washington, DC 20510

Senate Majority Whip John Barrasso
307 Dirksen Senate Office Building
Washington, DC 20510

Chair of the Senate Republican Conference Tom Cotton
326 Russell Senate Office Building
Washington, DC 20510

Chair of the Senate Republican Policy Committee Shelley Moore Capito
170 Russell Senate Office Building
Washington, DC 20510

Speaker Mike Johnson
521 Cannon House Office Building
Washington, DC 20515

House Majority Leader Steve Scalise
266 Cannon HOB
Washington, DC 20515

House Majority Whip Tom Emmer
326 Cannon House Office Building
Washington, DC 20515

Chair of the House Republican Conference Lisa McClain
562 Cannon House Office Building
Washington, DC 20515

Chairman of the House Republican Policy Committee Kevin Hern
171 Cannon HOB
Washington, DC 20515

Filed Under: Blog Tagged With: , , , , , , , , ,

AEA-Led Coalition to President Trump: Don’t Let Congress Preserve the Green New Scam

June 23, 2025 by Leave a Comment

WASHINGTON DC (6/23/25) – Today, a coalition of twenty-six individuals and organizations dedicated to preserving free markets and putting taxpayers and consumers first sent a letter to President Trump urging him to encourage Congress to uphold his campaign commitment to eliminate all remaining energy subsidies from the Inflation Reduction Act (IRA), which he aptly has called the “Green New Scam.”

The coalition, led by the American Energy Alliance, commends the progress made by the House of Representatives through the passage of H.R. 1, which significantly curtails many IRA-related tax credits and imposes tighter restrictions on foreign entities. However, the coalition is deeply concerned that the Senate’s working draft falls short, potentially extending key green energy tax credits into the next decade and beyond.

AEA President Tom Pyle issued the following statement:

“We are urging President Trump to ensure Senate Republicans match or exceed the House’s reforms and push for the full elimination of all Biden-era energy subsidies in the One Big Beautiful Bill.”

AEA Experts Available For Interview On This Topic:

Additional Background Resources From AEA:

For media inquiries please contact:
[email protected]

Filed Under: Press Releases Tagged With: , , , ,

The Unregulated Podcast #234: Two Weeks Notice

June 23, 2025 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss developments in Iran, plummeting solar stocks, the state of climate alarmism, and take a look at the most tax friendly state in the U.S.

Links:

Stay Connected With The Show:

Filed Under: Podcast Tagged With: , ,
Next