President Joe Biden on Wednesday visited Colorado to talk up how last year’s Inflation Reduction Act has helped the U.S. wind-power industry and the overall economy, but analysts are assessing whether his big climate and healthcare package’s days are numbered.
“Our theory of the case is that if Republicans win a trifecta in next year’s elections (House, Senate, and White House), there is a roughly 50-50 chance that they will end up partially repealing the clean-energy subsidies in the IRA as part of a larger, party-line reconciliation bill centered on extending the expiring portions of the 2017 Trump tax cuts (TCJA),” Tobin Marcus, head of politics and policy at Wolfe Research, said in a note.
Reconciliation refers to an optional budget process that allows for some types of legislation to be filibuster-proof in the Senate and thus easier to pass.
Markets SPX look set to “be slow to take this risk seriously,” Marcus added, referring to the repeal of some IRA subsidies. Investors will give it more weight next year if former President Donald Trump looks poised to win the presidential race, and if he heavily emphasizes rolling back the IRA, the Wolfe Research analyst said. Trump already has criticized the law repeatedly, and his allies indicated in a Financial Times interview last week that he plans to gut it.
One reason for expecting a repeal is the dynamics around a GOP reconciliation bill that addresses a wide range of party priorities, according to Marcus. Using that legislative vehicle would mean there isn’t an up-or-down vote on just the IRA, but rather a big package that all congressional Republicans would feel pressure to vote for.
On the other hand, the reasons for being skeptical about any substantial rollback, according to Marcus, include the possibility that Republican majorities in Congress could end up being too narrow to get it done, just as the GOP’s slim margin in the Senate prevented a 2017 repeal of Obamacare. Another hurdle comes from the fact that clean-energy ICLN money in the IRA is going mostly into red states and districts, the analyst said.
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In a speech at a CS Wind 112610, -0.39% facility in Pueblo, Colo., that manufactures towers for wind turbines FAN, Biden said the South Korean company is expanding its operations and hiring for 850 jobs as a result of the IRA. He also criticized Republican Rep. Lauren Boebert, who represents Pueblo and opposes the IRA.
“She, along with every single Republican colleague, voted against the law that made these investments and jobs possible,” the president said. “Then she voted to repeal key parts of this law, and she called this law a ‘massive failure.’ You all know you’re part of a massive failure? Tell that to the 850 Coloradans who get new jobs in Pueblo at CS Wind thanks to this law.”
Boebert offered her own criticism on social media, saying Biden should be dealing with issues like inflation, the national debt and the southern border, but instead is “out campaigning on spending hundreds of billions of taxpayer dollars to prop up renewables and Green New Deal policies.”
“The great people of Colorado’s Third District will not fall for Joe’s lies and deceit. They know the damage he’s done to our country and can feel it in their pocketbooks,” she said.
Biden had been scheduled to make this Colorado trip in mid-October, but he postponed it and traveled instead to Israel, as his administration worked to prevent that country’s war with Hamas from igniting a broader conflict.
U.S. stocks DJIA COMP closed mostly lower Wednesday, but still were poised for their biggest month of gains this year, as Treasury yields have retreated and investors hope for Federal Reserve rate cuts next year.
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