The Inflation Reduction Act’s Uncertain Future

James West, The Midas Letter

Trump’s stance on renewable energy and climate change is clear: Climate change is a hoax and any barriers to growth at any cost of the US oil and gas industry will be eliminated.

But one has to wonder, with the recent nuptials of bros Trump and Musk now consecrated in victory, how does that jive with the electric car business of the First Laddie?

One might assume that, among the victims of Trump’s newly sharpened axe, would be the Inflation Reduction Act of 2022 – Joe Biden’s signature accomplishment in the clean energy sector.

Within the Act are numerous projects that are funded by the Energy Infrastructure Reinvestment Program, which has $5 billion earmarked for clean energy projects that re-vitalize existing energy facilities that have passed out of service, with a total zero percent loan guarantee program of $250 billion available.

Matthew Daly, in a comment to PBS stated, “Basically everything that President Biden has tried to do, President Trump is going to try to undo. And you mentioned the Inflation Reduction Act, which is a terribly named law, but it’s a very wide reaching law that basically tries to spend hundreds of billions of dollars to promote clean energy and has a lot of tax credits in there.”

Never a nation to dilly dally when the federal government is handing out free money, numerous projects have already been approved and are underway. Most of these are in Republican jurisdictions, so there will be significant internal resistance should Trump wish to unilaterally cancel the Act.

Trump is more likely to dismantle pieces of the Act that benefit Democratic sponsored projects while leaving the Republican beneficiaries unscathed. You might think there is no way to do that legislatively, but Trump has demonstrated a persistent ability to rewrite the rulebook when it comes to targeting his enemies.

The Economic Case for Preservation

The IRA has spurred significant investment and job growth in the clean energy sector, with over $500 billion in planned investments and a growth rate twice that of the overall US employment market ¹. Repealing the law would undermine private investments and halt ongoing development, ultimately costing taxpayers billions of dollars.

Harry Godfrey, head of Advanced Energy United’s federal investment and manufacturing working group, notes that the IRA’s tax incentives align with Trump’s goals of energy independence and onshoring manufacturing.

Arguments Against Repeal

Bipartisan Support: 18 House Republicans have expressed opposition to repealing the IRA’s clean energy and manufacturing tax credits, citing the law’s benefits in their districts ¹.
Economic Interests: The IRA has driven economic growth in states with significant Republican representation, making a full repeal politically challenging
Global Competition: The US needs to maintain its competitive edge in the clean energy sector to counter China’s dominance

Arguments For Repeal

Trump’s Campaign Promises: Trump has pledged to repeal the IRA and halt offshore wind development ;
Ideological Opposition: Some Republicans may seek to dismantle the law due to ideological differences ;
Alternative Priorities: The GOP may redirect funds allocated to clean energy toward other priorities, such as tax cuts ¹.

The Way Forward

While the IRA faces uncertainty, experts like Gina McCarthy, former national climate advisor, remain optimistic: “The shift to clean energy is unstoppable… Our coalition is bigger, more bipartisan, better organized, and fully prepared to deliver climate solutions”.

So its pretty clear that, despite Trump’s idealogical opposition to anything to do with clean energy, he may find more immediate gratification for his revenge porn fantasies tea-bagging on the foreheads of less popular policies. We will have to wait and see what happens on January 6th….if he even makes it to that date.

James West, The Midas Letter

Trump’s stance on renewable energy and climate change is clear: Climate change is a hoax and any barriers to growth at any cost of the US oil and gas industry will be eliminated.

But one has to wonder, with the recent nuptials of bros Trump and Musk now consecrated in victory, how does that jive with the electric car business of the First Laddie?

One might assume that, among the victims of Trump’s newly sharpened axe, would be the Inflation Reduction Act of 2022 – Joe Biden’s signature accomplishment in the clean energy sector.

The Economic Case for Preservation

Arguments Against Repeal

Bipartisan Support: 18 House Republicans have expressed opposition to repealing the IRA’s clean energy and manufacturing tax credits, citing the law’s benefits in their districts ¹.
Economic Interests: The IRA has driven economic growth in states with significant Republican representation, making a full repeal politically challenging
Global Competition: The US needs to maintain its competitive edge in the clean energy sector to counter China’s dominance

Arguments For Repeal

Trump’s Campaign Promises: Trump has pledged to repeal the IRA and halt offshore wind development ;
Ideological Opposition: Some Republicans may seek to dismantle the law due to ideological differences ;
Alternative Priorities: The GOP may redirect funds allocated to clean energy toward other priorities, such as tax cuts ¹.

The Way Forward

If you’re from New York—or know anyone there—you’ll probably agree: most New Yorkers are fed up with crime, the outrageous cost of living, government incompetence and corruption—and, yes, the rats.

But the fact that a hard-core socialist like Mamdani is their favorite pick to solve those problems tells you that most voters have no idea why any of it is happening.

Their hatred of Donald Trump—and a steady diet of MSNBC—has made them blind to the obvious: it’s the Left’s policies creating these problems. You have rent control shrinking supply by forcing landlords to pull units from the market, union giveaways jacking up the cost of transportation, zero-bail laws putting criminals back on the streets, and so on and so forth.

Markets are having themselves a moody little week.

The Dow’s off 1%, the S&P 500’s down 2%, and the Nasdaq — where the AI darlings dance — has stumbled nearly 4%.

Even the refuge assets are catching cold: gold glitters less, and bitcoin, ever the high-strung teenager of finance, is down nearly 8%.

At the moment, traders aren’t sure what to make of it all.

Trump’s tariffs are under review at the Supreme Court, Zohran Mamdani’s socialist experiment is about to begin in New York City, and the AI trade — Wall Street’s favorite bedtime story — is between plot twists.

It isn’t hard to see why young people are looking for an alternative.

This cohort came of age through financial crises, inflation, a pandemic, trillion-dollar federal debts, chronic political deceit, a rough job market, predatory credit, expensive degrees with dubious ROI, and rents that make homeownership a punchline.

The status quo clearly isn’t working for the young. In that vacuum, socialism seems “cool,” so why not try it?

Decline will be felt by the economy on a lag and could be what ends up torpedoing his second term, along with his tariffs and the greatest bubble in history way overdue to burst in the next few years.

I objectively expect the music to stop while Trump is still in office, and no president gets re-elected in a bad economy (or his VP Vance), and this should be the worst since 1930-33.

If this decline had occurred right after he entered office, he wouldn’t have been blamed for it, or not as much. But after a full year+ and his tariffs appearing as a trigger, he will very much end up being blamed.