Will the U.S. Senate End the Green New Scam?
Provisions in the House Budget Reconciliation Bill Rolling Back Renewable Energy Subsidies Face Pushback in the Senate
With Congress preparing its summer budget reconciliation bill, a high-stakes showdown is unfolding over the future of federal green energy subsidies.
At the center of the debate are provisions in Sen. Mike Lee’s Energy Freedom Act, which seek to repeal large portions of the Inflation Reduction Act’s (IRA) clean-energy tax credits that have gained momentum among fiscal conservatives who argue that the subsidies inflate energy prices, distort markets, and put grid reliability at risk—while Democrats warn repeal would derail long-term climate goals and job growth.
Former President Donald Trump has branded the IRA subsidies the “green new scam,” and elements of Lee’s proposal have now been folded into House’s version of the reconciliation effort that many GOP leaders describe as a return to fiscal sanity. However, it is uncertain whether Senate Republicans will follow the House’s lead.
Passed in 2022, the IRA offered a sweeping set of incentives for wind, solar, electric vehicles, and battery storage—measures that Republicans increasingly view as costly market interference. “The Biden Administration's green energy subsidies have rigged the market, driven up costs, and left our grid more vulnerable,” said Lee, who chairs the Senate Energy and Natural Resources Committee. “America's energy policy should be about keeping the lights on and costs low—not lining the pockets of special interests.”
The reconciliation process allows a budget bill to advance with a simple Senate majority—making it a strategic vehicle for policy changes that would otherwise face filibuster. Conservatives like Lee see it as the best chance to roll back an estimated $1 trillion in energy tax credits. “We’re cutting billions in unused Biden-era climate slush funds, opening up energy and resource development, turning federal liabilities into taxpayer value,” Lee said. “This is how we make government smaller, freer, and work for Americans.”
Democrats counter that the repeal would set back grid modernization and domestic manufacturing. Senate Budget Committee Chairman Sheldon Whitehouse (D-RI) called the GOP-led effort “a direct attack on clean energy jobs and U.S. climate leadership,” arguing that clean energy investment has already generated thousands of jobs and revitalized rural economies. Clean energy groups also warn that scrapping the subsidies could destabilize project financing and jeopardize infrastructure buildouts currently underway.
Rep. Chip Roy (R-TX), a leading fiscal hawk in the House, has been blunt in his opposition to the IRA. “The Inflation Reduction Act, better known as the Green New Scam, is providing massive unlimited subsidies to billion-dollar corporations and Chinese manufacturers to the detriment of American energy freedom and dominance,” Roy said. “It is responsible for building ineffective, unattractive, and unwanted energy projects enriching paper investors over the objections of the people living in Texas communities I represent.”
Policy experts at free-market think tanks are also pressing Congress to repeal the IRA’s credits. Daren Bakst of the Competitive Enterprise Institute warns that the subsidies are steering the U.S. toward energy unreliability. “The tax credits form a radical central plan to shift our nation to unreliable electricity and to change how Americans use energy, including what cars we drive,” Bakst said. “Such efforts will devastate Americans, especially the poor.”
Mario Loyola, a senior research fellow at the Heritage Foundation, echoed those concerns. “Electricity prices for most Americans have gone up 30% since the beginning of the Biden administration,” he said in a recent podcast. “And the problems with the power grid are not going away; they are getting worse. The biggest problem we’ve identified for that is the so-called Inflation Reduction Act.”
Additional criticism has come from the Cato Institute, which argues that subsidies for mature industries like wind and solar crowd out innovation and misallocate capital. Instead of supporting emerging technologies, the subsidies are disproportionately benefiting established firms with strong lobbying arms.
Still, the utility sector is not united in its views. Rudy Garza, CEO of San Antonio-based CPS Energy, warned that eliminating solar and battery tax breaks could increase customer bills and compromise grid resilience. “We want to lead the world in artificial intelligence growth and capabilities,” Garza said. “That means we need to embrace every source of energy that’s out there.”
But others in the utility industry support the repeal. Jacob Williams, CEO of Florida Municipal Power, backed Sen. Lee’s proposal, writing that eliminating the subsidies is “critical to keeping electricity reliable and affordable in the United States.” He warned that federal tax credits for wind and solar are undermining stable, lower-cost energy sources such as natural gas, nuclear, and coal.
Senate Republican leaders are expected to unveil their formal reconciliation package in the next few weeks, with energy subsidy repeal playing a central role in negotiations. However, the road to passage is far from guaranteed. The Senate will require near-total Republican unity to move the bill forward. Some Senate Republicans are pressing for a more incremental approach, hoping to avoid potential political fallout from eliminating subsidies.
Rep. Roy has made it clear he won’t support any compromise. “You backslide one inch on those IRA subsidies and I’m voting against this bill,” he said. “So you do what you want to do in the Senate, House of Lords, have your fun. But if you mess up the Inflation Reduction Act, Green New Scam subsidies, I ain’t voting for that bill.”
Where the reconciliation process goes from here remains uncertain. Budget committee leaders are aiming to craft a bill that balances spending restraint with political viability. While full repeal of the IRA tax credits remains a top priority for fiscal conservatives, the final outcome will likely reflect a mix of cuts, caps, and compromises—setting the tone for the next phase of U.S. energy and fiscal policy.