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

Sunday night, Powell addressed the probe head-on in a video post — a rarity. He accused the White House of using cost overruns in the Fed’s HQ renovation as a pretext for political interference.

The White House denied involvement. But few in Washington believed it.

What followed was bipartisan condemnation of the investigation. Greenspan, Bernanke, and Yellen co-signed a blistering rebuke, warning the U.S. was starting to resemble “emerging markets with weak institutions.”

Estimates now indicate that the average consumer will default on a minimum payment at about a 15% rate – the highest level since a spike during the pandemic lockdown of the economy.

President Trump’s proposal over the weekend to cap credit card interest at 10% for a year won’t arrive in time to help consumers who are already missing minimum payments.

Not to fret, the other 85% of borrowers continue to spend on borrowed time. Total U.S. household debt, including mortgages, auto loans, student loans, and credit cards, reached record highs in late 2025, exceeding $18.5 trillion. This surge was driven partly by rising credit card balances, which neared their own all-time peaks due to inflation and higher interest rates.

There’s an old Wall Street maxim: “Don’t fight the Fed.”

This year, you could add a Trump corollary.

A wise capital allocator doesn’t fight that storm. He doesn’t argue with it. He respects it the way sailors respect the sea: with preparation, with humility, and with a sharp eye for what breaks first.

In 2026, the things that break first are the stories. The narratives. The comfortable assumptions.

Total municipal, state and federal debt service costs soared to nearly $1.5 trillion in the third quarter of 2025. Debt’s easy to accumulate when rates are low. Trouble is, you are obligated to refinance them even after rates go up.

It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.