BOISE, Idaho (DTN) -- The federal debt-limit bill dropped Wednesday by House Speaker Kevin McCarthy would repeal several tax credits for the biofuels industry, including tax credits for biodiesel, second-generation biofuels and sustainable aviation.
McCarthy, R-Calif., introduced a bill, the "Limit, Save and Grow Act," with a long list of GOP demands to raise the national debt limit by $1.5 trillion. Among the provisions, the bill lists a section to "repeal market distorting green tax credits." In that section, the bill would repeal several green-energy tax credits that were extended or created last year in the Inflation Reduction Act.
Beyond going after the tax provisions for electric vehicles, the bill also repeals an extension of the $1-per-gallon Biodiesel Tax Credit and Renewable Diesel Tax Credit. The $1.01-a-gallon Second Generation Biofuel Producer Tax Credit would also be repealed.
Another tax credit meant to help spark biofuel development in aviation fuel, the $1.25-a-gallon Sustainable Aviation Fuels Tax Credit would also be repealed under the bill.
The bill also would dramatically restrict the Clean Fuels Production Credit, which is set to start in 2025. Under the bill, the tax credit would only be available for fuel production started before the end of 2024.
The debt-limit bill also includes the entire House energy bill passed last month, the "Lower Energy Costs Act," or H.R. 1. That bill makes it easier to increase drilling, export and get pipeline permits for oil and natural gas, as well as get mining permits for critical minerals, including those minerals key for electric vehicles.
The bill also has provisions to tighten eligibility for the Supplemental Nutrition Assistance Program (SNAP) and Medicaid.
In a speech Wednesday, President Joe Biden spared no criticism of the GOP debt-limit proposal, which he said would lead to the risk of the U.S. defaulting on its debt. Biden said "MAGA Republicans" are threatening to default on sovereign debt payments in order to get their way on budget cuts, and he warned of "massive cuts in programs you count on."
"We've never ever defaulted on a debt. It would destroy the economy."
He told McCarthy to pass a debt ceiling without tying it to "wacko" demands from his caucus.
McCarthy, in his own floor speech introducing his bill, also tweeted out, "President Biden's reckless spending created record inflation, made us more dependent on China, and undermined Social Security and Medicare. Since he's been in hiding, House Republicans will take action by passing a responsible debt limit increase."
Rep. Glenn "GT" Thompson, R-Pa., chairman of the House Committee on Agriculture, praised McCarthy's bill as a "sensible proposal for raising the debt ceiling," though Thompson's comments did not mention specific details on the legislation.
"The Biden Administration's reckless spending has caused inflation and the national debt to climb to unimaginable heights, and American families continue to feel pain from the gas pump to the grocery store," Thompson said. "The Limit, Save, Grow Act is a sensible proposal for raising the debt ceiling, which reins in federal spending and invests taxpayer dollars more wisely. I appreciate Speaker McCarthy's willingness to bring varying perspectives to the table and for his leadership in the face of unwarranted partisan hysteria."
Rep. David Scott, D-Ga., ranking member of the House Agriculture Committee, earlier this week had criticized any attempts to restrict SNAP, calling it a "non-starter."
"The ransom note that Speaker McCarthy unveiled in front of a crowd of Wall Street bankers today is dead on arrival," Scott said.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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