Trump vows to pull back climate law’s unspent dollars

Donald Trump pledged Thursday to rescind any “unspent” funds under the Inflation Reduction Act should he be elected in November — potentially upending key parts of the Democrats’ climate law and its benefits to Republican-led communities.

“To further defeat inflation, my plan will terminate the Green New Deal, which I call the Green New Scam,” the former president said before the Economic Club of New York in wide-ranging remarks focused on the economy, likening Biden's agenda to a “waste” of money.

“It actually sets us back, as opposed to moves us forward. And [I will] rescind all unspent funds under the misnamed Inflation Reduction Act,” Trump added.

Trump’s formal threat to the climate law will likely only underscore the urgency for the Biden administration to get money from the law out the door. And it ups the ante in the ongoing debate among Republicans over how to address the law that is already bringing projects and investment dollars to GOP districts, should they gain control of both houses of Congress.

Trump did not specify which IRA programs he would target. Some Republicans in Congress have criticized the law’s funding for green banks and other programs while other GOP leaders have expressed support for maintaining some IRA tax credits that support manufacturing. And Trump’s former trade adviser Robert Lighthizer has suggested that some of the law’s provisions, like those that support U.S. factories, could be kept in place under a second Trump administration.

The administration has announced billions of dollars in IRA funding to support clean energy projects. But it is unclear exactly how much of that funding has been obligated or spent, which would offer them some legal protection against an effort by Trump to claw it back.

POLITICO’s analysis earlier this year showcased the enormity of the challenge for the Biden administration to spend those direct funding programs. The analysis from April found that of the $145 billion in direct spending on energy and climate programs in the IRA, the administration had announced roughly $60 billion in tentative funding decisions. That number has only grown since April, but many of the funding decisions will need to meet certain metrics before the money is formally spent.

The former president outlined a plan Thursday to establish a government efficiency commission floated by Tesla’s Elon Musk, who Trump has increasingly embraced and who he suggested could lead the new commission.

The former president also said he plans to issue a national emergency declaration to increase domestic energy supply and reiterated arguments that Vice President Kamala Harris is waging a “war” on U.S. energy — despite record U.S. oil production under the Biden administration.

The majority of the IRA’s emissions reductions come via a wide swath of new and expanded tax credits for clean energy technologies, which is separate from the direct spending under the law for grant programs and loans and would take congressional action to repeal.

The law includes grant programs, including those to reduce methane emissions, increase energy efficiency and create green banks across the country — some of which have already drawn Republicans’ ire . It also boosts funding for a loan office under the Energy Department that has grown under Biden but that slowed down under the previous Trump administration .

And the stakes are high for Democrats: Should Trump get elected, his administration would have wide latitude to slow down or reelevate direct spending under the law, as POLITICO has also reported — particularly as the former president has promised to restore a presidential authority to withhold congressionally approved spending that he considers wasteful.

The efficiency commission floated by Trump would be tasked with “a complete financial and performance audit” of the entire federal government and make “recommendations for drastic reforms.” The Wall Street Journal was first to report on Trump's plans on Thursday.

The goal would be to identify ways to eliminate “fraud and improper payments” within six months — which could potentially target other major programs under the IRA beyond those focused on climate and energy.

The IRA also included major health care and tax provisions. A March report from the U.S. Treasury Inspector General for Tax Administration found the IRS, for example, had expended roughly 10 percent of its $57.8 billion in IRA funding.

Musk “has agreed to head that task force,” Trump said Thursday. Musk posted on X earlier Thursday that: “I look forward to serving America if the opportunity arises. No pay, no title, no recognition is needed.”

A Trump campaign spokesperson did not immediately respond to a request seeking further specifics. But Trump has repeatedly derided what he deems as wasteful spending of taxpayer dollars under Biden that is driving inflation and energy costs. He’s previously pledged to redirect unspent money for “important projects like roads, bridges, dams” and to ensure money is not spent on “meaningless Green New Scam ideas.”

Trump said Thursday his plan would “cut energy prices in half or more than that within 12 months of taking office” and said that oil production would be four times higher than today should he enter office.

Trump also said his administration would “blast through every bureaucratic hurdle” to issue rapid approvals for new drilling, pipelines, refineries, power plants and reactors, as well as make the U.S. a major producer of rare earth minerals that are crucial for clean energy technologies. And Trump pledged to eliminate a “minimum of 10 old regulations” for every one new regulation.

“It will be an economic revival of our country like no one has ever seen before,” Trump said.

The Harris campaign issued a memo Thursday touting her economic agenda and panning Trump’s plan for a second term.

“Trump may try to distort objective reality on his dangerous plans, but mainstream experts agree on the devastating results of his agenda: shrinking the economy, undermining job growth, driving up inflation, exploding the national debt, and raising taxes on the middle class,” the Harris campaign memo said.

Trump also emphasized a focus on restoring domestic manufacturing — something the IRA aims to do through its tax credits and other incentives. The law has already spurred billions of dollars in planned U.S. manufacturing facilities across the country — the majority of which are in GOP-held congressional districts.

While repealing tax credits under the IRA would require congressional action, Republicans are already looking at renewing Trump’s 2017 tax law and provisions under the IRA have emerged as potential pay-fors for that endeavor. House Republicans have also sought to repeal tax credits and other programs under the IRA — despite several House Republicans who’ve urged protecting the investments in their districts stemming from the law.

Treasury Secretary Janet Yellen, speaking in Raleigh, North Carolina, Thursday morning, underscored the economic case for protecting the law’s tax provisions — the rolling back of which she said would be “a historic mistake” that would raise costs for families and could give China and other countries, which are also investing to compete in clean energy industries, “a leg-up.”