Roughly 40% of the projects announced in the first year of the implementation of President Joe Biden ’s largest industrial and climate infrastructure spending bills have been put on hold, according to a new analysis that illustrates the difficulty of translating major subsidies into physical construction.
During the 117th Congress, Biden signed the Inflation Reduction Act and the CHIPS and Science Act, which together offered more than $400 billion in subsidies for clean technology and the domestic buildout of semiconductors.
For projects worth up to $100 million, however, $85 billion have been put on hold for several months or years or paused for an unspecified period of time, according to a Financial Times investigation . The total valuation of these projects was $227.9 billion.
This poses a complication for the Biden administration , which has said that its spending measures would reshore industries and bring back manufacturing jobs to the United States. The delays are also a setback for Vice President Kamala Harris’s presidential campaign as she looks to attract support from blue-collar workers.
It also highlights the failure of the Biden administration to enact permitting reform to facilitate the construction of major projects. As part of negotiations for the Inflation Reduction Act, Sen. Joe Manchin (I-WV) struck a deal with Senate Majority Leader Chuck Schumer (D-NY) to put a permitting reform proposal on the floor, arguing it was essential to realizing the potential of the law and its subsidies. Biden endorsed the reform measure, but it failed to advance thanks to opposition among Democrats. A new proposal from Manchin , along with Sen. John Barrasso (R-WY), has reignited hope that a bipartisan effort could gain traction in the upper chamber.
Industry players said poor economic conditions, slowed demand, and a lack of policy clarity during an election year have caused them to move in other directions.
The Financial Times conducted more than 100 interviews with companies and state and local authorities and reviewed press releases and filings to help determine the progress of the projects.
Some of the largest projects on hold are Enel’s $1 billion solar panel manufacturing facility in Oklahoma, LG Energy’s $2.3 billion battery storage facility in Arizona, and Albemarle’s $1.3 billion lithium refinery in South Carolina.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Within the first year of implementing the Inflation Reduction Act and the CHIPS Act, more than $220 billion in manufacturing investments were announced, and companies looked to locate operations in the U.S. in hopes of benefiting from the subsidies. But tough market conditions, along with competition from China, slowed demand for electric vehicles, and policy ambiguity has put progress on hold.
Furthermore, many companies often cannot receive funding until they achieve certain production milestones due to labor and supply chain requirements.
Most Popular
Comments / 0