The U.S. debt ceiling is about to be reached, and Treasury Secretary Janet Yellen revised her estimate of the debt ceiling date from June 1 to 5 days, buying more time for negotiations between U.S. President Joe Biden and House Speaker Kevin McCarthy. Biden announced on Sunday (28th) that he had reached an agreement, but the content still needs to be submitted to Congress for a vote.
In April, Republicans exploited the U.S. debt crisis to demand significant cuts to green energy subsidies under the Inflation Reduction Act, citing the bill's strong investment in the economy, which resulted in higher-than-expected government subsidies. According to Reuters on the 28th, Biden ultimately defended key provisions of the climate bill.
Biden's climate law exceeds expectations in both effectiveness and spending
The passage of the US Federal Reserve's Inflation Reduction Act last August massively subsidized green energy investment, attracting unexpectedly strong investment in the US manufacturing sector. In the eight months following the bill's signing, announced green energy investments in new or expanded facilities exceeded $150 billion. Qcells, the solar division of South Korea's Hanwha Group, has decided to invest $2.5 billion to establish a complete solar manufacturing supply chain in the United States. The European Union, also concerned about the potential for investment in the bill, is now considering green energy subsidy policies.
According to a New York Times report in early May, Congress originally estimated last August that the bill would provide $391 billion in tax credits for climate and clean energy between 2022 and 2031. However, a recent recalculation found that the actual amount would increase by another $180 billion, increasing the burden on the government and taxpayers.
Other experts and investment bank Goldman Sachs estimate that the bill's energy subsidies will cost $1.2 trillion over the next decade, while the Brookings Institution puts the figure at between $240 billion and $1.2 trillion.
"Investment is moving five times faster than it has in the past," said Jason Grumet, CEO of the American Clean Power Association.
Republican states welcome investment, but oppose climate laws
As subsidy costs continue to rise, the bill is facing renewed challenges. Democratic Senator Joe Manchin, a key vote, threatened to repeal the law if the government doesn't take steps to reduce costs. Amid the US debt crisis, Republicans introduced the "Limit, Save, Grow Act" in April, calling for cuts to the Inflation Reduction Act's tax breaks and accusing it of costing three times as much to promote green investment as originally anticipated. The bill never became law due to opposition from the White House and the Senate.
The "Inflation Reduction Act" was strongly promoted by Biden's Democratic Party, with no Republicans voting in favor. However, its passage has resulted in a significant influx of investment into Republican states, particularly in the Southeast, South, and Midwest, where land is vast and costs are low. The New York Times wrote, "Republicans have criticized the law while welcoming the investment." The Guardian reported that Republicans are exploiting the U.S. debt crisis to target Biden's key climate policy, demanding the repeal of most of the legislation's subsidies.
However, clean energy subsidies remained a key issue in the negotiations. Reuters reported on the 28th that Biden ultimately defended a key provision of the climate law.
An analysis report from a domestic bank indicates that the debt crisis will eventually resolve; the challenge lies in the strategic and strategic adjustments to spending cuts during the negotiation process. While fiscal spending cuts could lead to a decline in consumption momentum, changes in new energy subsidies could impact future industry trends.
Source: Environmental Information Center (https://e-info.org.tw/node/236858)
