The House omnibus spending package includes a substantial increase in funding for green energy subsidies the Trump administration and Republicans believe should be eliminated.
The spending bill provides the Energy Efficiency and Renewable Energy (EERE) $2.3 billion, a level $1.7 billion above President Donald Trump’s budget request and $232 million above the 2017 enacted level. It also nearly doubles the House-passed level.
“Not only does this allow the federal government to pick winners and losers, but also it limits research to a small sector of the energy economy—renewables. The U.S. should pursue a market-based, all-of-the-above energy policy,” the Republican Senatorial Committee stated in its 2018 budget proposal.
The bill was released to the media Wednesday night and provides $34.5 billion for the Department of Energy, the department that houses the EERE. DOE’s funding level is $3.8 billion above the fiscal year 2017 level and $6.6 billion above Trump’s budget request. EERE is the agency that provides research and development for solar power and other types of green energy projects.
The bill would provide nearly $13 billion in energy subsidies, or $5.4 billion above the president’s budget, and $1.6 billion above the fiscal year 2017 enacted level. It’s 72 percent above Trump’s budget proposal. The president and Republicans sought to ding subsidies and tax credits for electric vehicle earlier this year to help pay down Trump’s tax cuts.
Republicans called for the immediate repeal of the $7,500-per-vehicle credit in November to help balance out the party’s tax bill, which sought to slash the corporate tax rate to 20 percent from 35 percent and to reduce the number of tax brackets for individuals. The tax bill passed in December with the tax credit included.
Analysts argue the tax credit drives most of the sales for the electric car industry. Electric car sales slumped badly in Georgia, going from 1,400 a month to just 100 a month, after the state shuttered its $5,000 credit. Other countries have eliminated electric vehicle credits with similar results.
Data show that the elimination of the tax credit could be a death knell for companies like Tesla, especially considering the Silicon Valley automaker’s inability to mass produce vehicles at the scale of its larger competitors. The company relies heavily on the credit for survival.
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