Hello Substack!
I’m excited to be here with you and help make sense of the barrage of news you’re facing each week. When I was serving on the Biden White House Council of Economic Advisers and as chief economist to the president’s Invest in America cabinet, I shared a weekly update on the progress that we were making to build an economy from the middle out. Now, I’m bringing you updates from Substack, where I’ll share my thoughts on what’s happening in our country and talk directly to everyone who still believes that the economy should work for all of us.
I decided to launch today because we’re seeing President Trump and Congressional Republicans on the verge of passing One Big, Bad Bill that will secure tax cuts for the wealthy— while stripping millions of Americans of their healthcare, slashing nutrition assistance, and gutting the Biden-era clean energy agenda. Instead of delivering lower costs as he promised, President Trump will increase health care, grocery, and utility bills through this tax plan. With an aim to vote on the bill early Wednesday, it’s poised to ruin Fourth of July barbecues all across the country.
After overseeing the historic expansion of clean energy through the Inflation Reduction Act that President Biden signed into law, I’m particularly outraged that the latest text in the bill significantly accelerates phaseouts and cuts of clean energy tax credits and is coupled with new excise taxes and increased Treasury discretion over FEOC restrictions, slashing opportunities for new wind and solar projects and abruptly increasing market uncertainty. Whereas earlier versions based phaseouts on beginning of construction dates, the newest version cuts them off unless the projects are placed in service by 2027. This legislation sends a clear message to investors and our international competitors that we are conceding the clean energy race.
This makes no sense, given how far clean energy has come in just a few years. The Invest in America agenda has been propelling a U.S. manufacturing revival, triggering over $1 trillion in announced private investment by the time President Biden left office and the Bureau of Economic Analysis showing a more-than-doubling of private investment in new manufacturing facilities (see below). This has been money well spent: for every $1 of public investment, private investors have pumped in $6, catalyzing over 300,000 clean energy jobs since its passage, and has a projected generation of 9 million jobs over the next decade.
With this Big Bad Bill, communities stand to lose that hope of a new industry and jobs. And Republican areas that will be hardest hit as they disproportionately benefited from the IRA—a law that not one Republican supported—and, as a result, the places most likely to lose private investment and jobs due to the clean energy cuts.
On top of these steps that will de-grow the economy, this legislation puts the United States on a more unsustainable path, even as Republicans seek to obscure this fact. By assuming that the 2017 Trump tax won’t expire, the White House claims the Big Bad Bill will reduce the deficit by over $2 trillion. In absence of this outrageous assumption and others, the legislation is likely to increase the federal deficit by at least $3.3 trillion, accelerating America’s debt crisis so that the wealthy can get an ever big piece of the economic pie.
Chart of the Week
From the research community
Buried in the proposed legislation is a revision of Section 889, an international tax provision, that raises the compliance risk for clean energy projects financed by foreign investors or lenders from targeted nations. The provision could take effect as early as 2027, creating near-term hurdles for inherently long-term projects.
Nearly $450 million was spent by oil and gas companies on Trump’s 2024 election campaign, lobbying, GOP campaigns, and other expenses, deepening concerns that the bill’s nod to these companies would concurrently trigger a scramble to beat the 60-day IRA eligibility deadline.
The latest CBO projections estimate 17 million Americans could lose their healthcare coverage over the next 10 years as a result of the proposed bill’s $600 billion in cuts to Medicaid. The bill tightens eligibility requirements for SNAP, or the “food stamp” program, which helped roughly 42 million low-income people buy groceries per month in 2024.
ICYMI
Kentucky has attracted $9.12 billion in new private-led investment across 11 domestic energy and manufacturing facilities, with major factories for manufacturing batteries and their components for the EV and utility industries in Bowling Green, Shelbyville, Hardin County, and Hopkinsville, all of which are now likely to be derailed by the bill. Reports project an increase in the annual energy bill by $480 million across Kentucky households in 2030 if the legislation passes.
Michigan reports the second-worst unemployment rate among the 50 states for the third straight month in a row, as the auto industry-reliant economy reacts to uncertainty posed by increased tariffs on vehicle imports and auto parts.
In Arizona's 6th District, solar projects across rural areas that hinge on Inflation Reduction Act tax credits have controlled rising utility costs and stabilized grids amid extreme heat. The district has also been transformed by a rapidly growing Lucid Motors plant, spurred by clean energy investment.
Stay cool this week out there—even if you're getting mad. I look forward to sharing more updates on Substack in the days and weeks to come.
Best,
Heather
Thanks for your discussion with Jess Craven on the implications of the Tax Bill. The estimated increase in the National Debt would be $3.3 Trillion (over 10 years) which as you mentioned is a big number and hard to visualize. If the US population (330 million people) share this debt increase, we would each owe $10,000 (or $1000 per year for 10 years)! Ouch! Even more depressing is the fact that this Debt increase is about 10% of our total national debt. So each of us owes $100,000 to pay off the total debt.