Republicans Fine With Leopards Eating Their Constituents' Faces First
In this case, it's a 'bye-bye clean energy jobs' leopard.
If there’s one thing that’s sacred to your free-enterprise capitalist types, it’s a contract between a buyer and a seller, or a borrower and a lender. You make a commitment to sell widgets, you’d better deliver those widgets, and if not, you will be banished from Libertarian Eden and condemned to peddle inferior socialist widgets in Latvia in 1955. That’s how we remember the excitable free enterprise Young Republicans in college at least, when they weren’t trying to bludgeon us with a copy of Atlas Shrugged.
Of course, if the party making a contract was Joe Biden’s federal government, and that agreement was a loan for building an EV battery factory, well then the private companies, workers, and suppliers who thought those contracts were binding should have known better than to make any plans, especially not after Donald Trump was elected in November. America HATES the environment now, anyway.
As The New York Times reports (gift link), that may come as a really unpleasant surprise to many in the red states that Trump relied on to win election, because now he’s decided to illegally block federal spending on anything related to clean energy, energy conservation, environmental protection, or people and geographic locations with the word “green” in their names. And as Yr Wonkette pointed out several times while Trump was preparing … OK, waiting, at least — to take office, a whole heck of a lot of the clean energy and manufacturing money from Joe Biden’s Inflation Reduction Act ended up going to companies in red states. About 80 percent of it, as a recent analysis determined.
Update: Just a reminder that this wasn’t by design: The tax incentives for manufacturers were agnostic as to location, and the siting location was up to the companies that took the deals. The south has cheaper labor because because of “right to work” (with no rights), so that was a big factor, as were other state-level incentives aimed at attracting bidniss.
Now, when we pointed that out shortly after the election, back in our callow youth, we naively thought that, as with Pentagon contracts that send a little bit of every weapons system’s components to the home districts of key Congress members’ districts, that widely distributed IRA funding might mean support for keeping the legislation going. After all, local and federal electeds, and the companies getting the tax credits, would lobby hard to keep the money and jobs flowing.
Thing is, even if those interests do want that to happen, Trump and Musk instead decided to bypass the Constitution and have Elon run the federal government.
Boy, did we ever blow that guess!
Red State Blues
But even if red states haven’t squawked about it much, they’re definitely feeling the pinch. Since the IRA passed in 2022,
private companies chasing the law’s tax breaks have announced plans to spend $165.8 billion to build factories that make solar panels, wind turbines, electric vehicles and more, according to new data from Atlas Public Policy, a research firm.
On top of the tax incentives, the IRA and the earlier Bipartisan Infrastructure Law have been the sources for tens of billions of dollars in grant money to businesses, state and local governments, and nonprofits. Those grants aren’t just a free bucket of money, they’re binding contracts that have spurred investments, led companies to buy land, hire people, and contract for services, all based on the contractual obligation that the government would reimburse them. That was the deal, right there on paper or PDF, probably both. Now, along comes Trump:
Since the federal spending freeze was announced January 27, federal courts have placed a hold on it, several times in fact. The most recent decision came Tuesday when an appeals court denied the administration’s request to pretty please let Trump withhold billions and billions of dollars in grants and congressional allocations. That hasn’t actually resulted in any of the funds being restored, however, and that’s been leading to layoffs and furloughs and smaller contractors closing up shop, far beyond the clean energy and tech fields we’re talking about in our story here.
Prosperity On Pause
For red parts of the country, the freeze on energy and climate spending is already taking a toll, per the Times:
In Montana, a biofuels plant did not receive on time a $782 million payment it was owed, the first part of a $1.67 billion federal loan guarantee. In Georgia, $1 billion in projects to modernize the power grid are on hold. In Nevada, a half-dozen large solar projects on federal lands are caught in a permitting freeze
That’s also going to mean trouble for clean manufacturing companies set to open in 2025, valued at roughly $30 billion. While some already faced delays or even cancellation due to factors other than the Trump freeze, the funding cutoff will kill a lot more if it remains in place.
Here’s one such example that the Times didn’t cover: EV maker Rivian paused construction of a planned battery and EV factory in Georgia last year due to uncertainty about the market for its nifty electric pickups, SUVs, and those bulbous electric Amazon delivery vans. Business has since picked up, and in January, Rivian announced the factory was back on schedule, thanks to a new $6.6 billion loan from the US Department under the IRA. Hooray! Jobs! Prosperity! A factory to build the company’s new, more affordable (but let’s be honest, still luxury-market) R2 and R3 midsized models! And then, right on the tail of the happy news, the spending freeze slammed down. So far, Rivian hasn’t commented on whether its loan specifically was affected, but the timing of the loan and subsequent freeze certainly suggests Rivian will be feel the chill.
Green New Schlemiels
Democrats are already sounding the alarm and fighting for clean energy investment to go forward even if it is happening outside their districts, because it’s good for America and the planet. And Republicans are being Republicans.
Here’s how Rep. Michael Rulli (R-Ohio) bravely defended the $415 million in federal funding for his district, some of which will create 650 new jobs in an auto parts plant, but only if the plant opens: “There might be some things in there that are worth saving,” Ruli admits, possibly looking around furtively for one of Elon’s Dogboys. “That’s going to take a little time to figure out.”
And then there are the Republicans who are delighted to see their constituents screwed, although they don’t say that openly; they just deflect. Rep. Rick Allen, whose Georgia district has seen $1.6 billion in private investments driven by the IRA, grumbled — with zero evidence of course — that maybe the federal grant process under Biden was improper, and shouldn’t we all be overjoyed that now everything is on hold, just to be sure? No, he didn’t have any proof, but it was Biden, it had to be corrupt. Binding contracts? Free enterprise? Well not if the contracts were corrupt! No, stop asking me for proof, I’m just asking questions. Please go bother a Democrat now
We were amused that the Times says the freeze has put Republicans in a “tricky position” where they must defend Trump at all costs (must they?), even as they’re “working behind the scenes to protect their towns from the loss of new manufacturing jobs.” Not that any Republicans the Times talked to would go on the record and admit they’re making such “behind the scenes” efforts, of course.
Instead, the accounts of quiet moves to protect jobs in Republican districts came from clean energy industry lobbyists who have been meeting with those politician, and say the Republicans definitely know how bad ending federal clean energy spending will by for their districts. One lobbyist, Bob Keefe of the nonpartisan business group E2, told the Times,
“We just met with more than a dozen key Republican offices, and I can tell you nobody wants to kill jobs. They don’t want to have to go back and face constituents and tell them that the factory I just cut the ribbon on might not be coming. That’s going to put them in a hard place.”
Just don’t say who those Republicans are, please, OK?
[NYT (gift link) / ABC News / CNN / GovTech / Capitol Beat / WSB-TV]
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Just added an update pointing out that the IRA tax incentives weren't designed or directed to go to red states; the incentives were agnostic on location, but companies building factories tended to site in red states because of lower ("right to work" with no rights) labor costs and other factors.
By illegally bypassing Congress altogether, Trump might save Republicans the trouble of voting to kill jobs in their districts. Wasn't that nice of him? And all it takes is a constitutional crisis!