By Liam Denning. Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.
House Republicans’ doughty opposition to green spending has cracked in the face of a devious opponent: green spending.
Speaker Mike Johnson just received a letter signed by 18 members of his caucus urging him not to mess with the clean technology subsidies embedded in the Inflation Reduction Act, a law that half of them voted against (the other nine are freshmen elected a few months after it passed). While the signatories deplore the “partisan process” by which the IRA passed — under budget reconciliation — they also say they “hear from industry and our constituents who fear the energy tax regime will once again be turned on its head,” if Republicans win big in November and decide to dismantle the law. The result could be a loss of promised jobs and investment and perhaps abandoned, half-built factories left as a permanent reminder in their districts.
Two months ago, I published an exhaustive analysis of where cleantech manufacturing projects were being built or planned, down to the House district level, in conjunction with my Bloomberg Opinion colleagues and Jeff Davies, founder of EnerWrap, which specializes in data-driven insights on the US energy system. You can read it and interact with the data here. The bottom line is that the overwhelming majority of the more than $200 billion of planned investment and about 195,000 expected jobs — benefiting from subsidies embedded in the IRA and the bipartisan infrastructure and jobs act — are slated for Republican districts. We concluded: “As billions of dollars flow into red districts, the probability of a clash between ideological purity and economic pragmatism is growing.”
It hasn’t taken long for the first tangible evidence of that clash to show up.
The signatories are an interesting bunch seemingly motivated by different objectives. The easiest to understand are the 10 representing districts where projects are slated to be built or have companies headquartered there which have announced such plans. As of June, when we published our analysis, those districts accounted for about $23 billion of investment and 18,000 jobs, or roughly 10% of the national total. Two districts account for much of that: Rep. Buddy Carter’s 1st district in Georgia and Rep. Mark Amodei’s 2nd in Nevada, which rank second and third for planned cleantech manufacturing investment in the entire country.
Another factor at play, however, is relative moderation, both in terms of behavior and positioning. “On average, the signatories skew moderate and represent purpler districts than House Republicans as a whole,” says Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based analysis firm.
The signatories also tend to vote more moderately than the Republican caucus as a whole, with a few notable exceptions like Carter and Rep. Erin Houchin of Indiana’s 9th district.1 Notably, two of the signatories, Rep. Andrew Garbarino of New York’s 2nd district and Rep. Don Bacon of Nebraska’s 2nd, have no planned cleantech manufacturing projects in their districts but were among the 13 House Republicans who voted for the bipartisan infrastructure and jobs act.
The other element of moderation likely at play here is a desire to be perceived as such. As the chart shows, there’s a purple theme running through this letter. A dozen of the signatories represent districts classed as competitive by the Cook Political Report, with seven of those outright tossups. Strikingly, five of the signatories hail from districts in New York, with four of those being freshmen in districts that voted for President Joe Biden four years ago.2
When you’re the red representative of a purple place, it is common sense to advertise your reasonableness. Another thing that’s common sense: Not voting away a slew of money and jobs for your own constituents. This week marks the first sign of this realization dawning ahead of November.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.