Francis Chung/POLITICO via AP Images
Rep. Randy Weber (R-TX) holds a document entitled “THE ONE, BIG, BEAUTIFUL BILL” during a House Energy and Commerce Committee markup on Capitol Hill, May 13, 2025.
One of the ironies of Joe Biden’s green industrial policy, as enacted through the CHIPS Act, the bipartisan infrastructure law, and especially the Inflation Reduction Act (IRA), was that about three-quarters of the benefits have accrued to Republican congressional districts. The point of these laws, which set out a giant array of subsidies for clean energy, infrastructure, and advanced manufacturing, was to get America back on the cutting economic edge. Advanced technological products and inputs like solar panels, batteries, and semiconductors, which very obviously are going to drive global economic growth through the rest of the century, would be brought back to the U.S. Future technologies like advanced geothermal, a new generation of nuclear reactors, and green hydrogen production would be brought online.
Despite some teething problems, it was working well. Investment in solar panels and battery storage skyrocketed under Biden’s term, and factories were going up all across the country. In just one presidential term, America became almost self-sufficient in solar panel production.
But perhaps not for long. Just $321 billion of IRA spending has gone out the door, with an estimated $522 billion still at stake. Republicans in the various House committees have begun marking up their sections of the GOP reconciliation bill containing their whole legislative agenda, and this week the Ways and Means and Energy and Commerce Committees released their proposals. As Brad Plumer and Harry Stevens write at The New York Times, they amount to a near-gutting of the IRA, and hence a devastating blow to the economies of GOP districts, to pay for tax cuts for the rich.
The electric-vehicle consumer credit and the hydrogen power credit would be mostly ended this year, while the clean-energy and battery factory subsidies would be made much harder to access and formally ended in 2031, rather than 2035. What’s more, as Emily Pontecorvo details at Heatmap News, the ability to “transfer” green tax credits (making them much more valuable) would be ended, and subsidies for household rooftop solar, heat pumps, efficient appliances, and home insulation would be ended this year, along with other cuts.
In short, America’s manufacturing renaissance would be taken out behind the woodshed and summarily dispatched, so that Elon Musk and his fellow billionaires can get even richer.
Red states benefited from Bidenomics partly on purpose and partly by accident. The political theory of the law was that if a whole bunch of politically diverse regions benefited, the new factories and such would naturally develop a bipartisan constituency. This is entirely rational and arguably would have worked perfectly at most times in American history. It’s the same reason why defense contractors spread out their construction of projects like the F-35 over as many congressional districts as possible. For decades, conservative Republicans, who at all other times espouse penny-pinching austerity for the welfare state, have suddenly became New Deal Keynesians regarding weapons manufacturers in their districts.
Republican voters elected a president and Congress who are on the verge of shipping all these factories and jobs back to China.
But even more IRA investment flowed to red states than anticipated, because wages are lower in those states, and especially because land is much cheaper in depopulated regions than it is in urban areas where a chronic housing shortage has driven prices through the roof. Blue cities’ inability (or unwillingness) to build housing not only has led to skyrocketing home prices, population outflows, and a disastrous erosion in Democrats’ Electoral College prospects, but now is also strangling green investment.
As of now, before the entire Republican House delegation has decided what it wants to cut, the political strategy behind the IRA is still in play. Earlier this month, 26 House Republicans sent a letter calling for much of the law to be preserved. In response, 38 other Republican members sent their own letter demanding a complete repeal. As my colleague David Dayen points out, the GOP’s only-partly-crazed caucus and its stark-raving-mad counterpart are at daggers drawn over this and a dozen other priorities. If anything saves the IRA, it might be Republican extremists’ inability to accept a half-a-loaf compromise rather than the fact that the law benefited conservative voters.
It’s a remarkable development given the traditional narratives around Trump and trade. He came to political power and eventually the presidency against a background of decades of deindustrialization caused by neoliberal trade policy. Voting data from 2016 showed that Trump had swung many traditionally Democratic regions in states like Pennsylvania and Michigan where factories had been closed and jobs had been shipped to foreign countries. His promise of “America First” and attacks on unfair trade practices seemed to win over voters harmed by NAFTA and the China shock. Four years earlier, Barack Obama won re-election with a blisteringly populist campaign attacking Mitt Romney as a financial assassin of Missouri steel factories. The Biden administration, reasonably enough, concluded that it was high time to revitalize these regions with industrial policy.
In response, Republican voters elected a president and Congress who are on the verge of shipping all these factories and jobs back to China, if not just destroying them outright, to make budget headroom for tax cuts for the rich. In effect, these voters responded to the most comprehensive attempt to provide concrete benefits to them since the New Deal by loading an economic shotgun and pointing it directly at themselves. The proposed cuts coming out of the House committees has them groping for the trigger.
It would be an overstatement to say this proves it’s now impossible to win support with economic policy. As noted, some Republicans have at least partly come around. The benefits of the IRA were just starting to flow in 2024, and what’s more, most of the factories it had funded are still under construction. If the law had another couple of years to entrench itself, it would probably be harder to repeal.
But we can say that the Biden administration’s theory that economic benefits will automatically produce large political changes, at least at this moment in history, is wrong. As I have previously written, with the decline of local journalism and the rise of social media brain-poisoning, a large fraction of voters have never heard about IRA projects even in their own neighborhood. For their part, the Democrats are crying out for a media apparatus that can consistently deliver their messaging to voters, rather than an all-out advertising blitz for a few months every four years.
New Dealers were absolutely shameless about this kind of messaging, by the way, slapping big boasting plaques on every public works project and hiring Woody Guthrie to drive around the Pacific Northwest to write songs praising public hydropower.
Even if Dems do eventually stand up something that can rival Fox News, any policy to benefit deep-red regions should be regarded with suspicion in future. Rather than allowing ingrates like Rep. Marjorie Taylor Greene (R-GA) to boast about supporting IRA projects in her district and then turn around and vote to throw them in the garbage, investment should be directed, where possible, to blue and swing districts where it is likeliest to pay political dividends. Sometimes siting projects in red regions may be unavoidable, but in general, at least until they revive some fact-based media, these places can’t be trusted to behave rationally. They had their chance and squandered it.
