Senate tax bill will raise costs, cut jobs, and cede U.S. leadership in critical industries

Ceres issued the following statement following the release of the Senate Finance Committee legislative text for the U.S. budget reconciliation bill, which makes minor improvements upon the House version but would still greatly curtail federal energy and advanced manufacturing incentives. 

“Businesses need long-term policy certainty to confidently invest in American manufacturing, energy dominance, and global competitiveness,” said Zach Friedman, senior director of federal policy, Ceres. “While the Senate bill makes minor improvements upon the House version—such as eliminating some red tape and restoring transferability—it still pulls the rug out from American energy producers, innovators, and manufacturers. By failing to support shared national goals to win the race for 21^st century industries, this legislation will send hard-fought manufacturing jobs from every corner of the U.S. to China and other countries.”  

“To meet surging energy demands affordably and reliably, America must build all the power it can as quickly and cheaply as possible,” Friedman continued. “This legislation picks winners and losers by raising taxes on the most cost-effective options, making energy more expensive and harder to build. Instead of strengthening U.S. manufacturing, restoring jobs, and lowering costs for American businesses and families, it would reduce investment in key cost-saving technologies the world increasingly needs. It would also cede the jobs and technology advantage to China by removing both supply- and demand-side policies that drive U.S. investment and innovation across strategic sectors like energy, autos, AI, critical mineral supply chains, and heavy manufacturing.” 

“As the reconciliation process moves forward, Ceres and the businesses we work with will continue to engage with lawmakers to emphasize the profound economic, energy, and geopolitical consequences of curtailing these tax credits. We urge the Senate to rework this legislation to maintain a pro-growth policy environment that unleashes American energy affordability, manufacturing jobs, and competitiveness,” added Friedman.  

The Senate text comes after the House passed a reconciliation bill that all but eliminated clean economy incentives. In the weeks since the House passed its version, Ceres and the companies it works with strongly advocated for improvements and held meetings with key GOP Senate offices last week. In addition to calling for longer timelines before the tax credits expire, Ceres urged four major changes:  

• Allow projects to continue the long-standing practice of qualifying for tax credits based on when they commence construction rather than when they are placed in service;  

• Make foreign sourcing rules realistic, clear, and strategic for reshoring jobs from China;  

• Keep tax credits fully transferable to ensure market efficiency that benefits taxpayers; and  

• Maintain consumer-facing tax credits to provide more certainty to manufacturers across the economy while reducing costs for middle-class families.  

Ceres has long worked with businesses and investors across the economy in support of the tax credits and other federal clean energy programs, with an active advocacy role in this year’s budget reconciliation negotiations. In March, 80 leading businesses and investors joined Ceres’ flagship advocacy event LEAD on a Clean Economy 2025, including Carrier, Danone, DHL, dsm-firmenich, Ecolab, Ford Motor Co., Heirloom Carbon, HASI, Holcim, IKEA US, Lucid, Lutron, Michelin, Schneider Electric, and Siemens. They took to Capitol Hill to showcase the economic, energy, and geopolitical benefits of the tax credits in 100 meetings with GOP lawmakers and the White House. Companies returned to Capitol Hill for follow-up meetings in April, May, and June.  

Amid the advocacy meetings, many key Republican lawmakers have publicly indicated support for maintaining clean energy tax credits. In April, four GOP members of the U.S. Senate issued a letter cautioning against repealing tax credits that boost U.S. manufacturing, reduce energy prices, and provide policy certainty for businesses. And in early June, more than a dozen GOP members of the House called on the Senate to improve upon the legislation its chamber passed in May. 

Clean energy tax credits have a long history of bipartisan support. Since they were extended and expanded by Congress in 2022, the private sector has capitalized on the long-term policy certainty by investing more than $420 billion into about 750 clean energy projects in the U.S., creating more than 400,000 jobs. Most of the benefits – including new factories, jobs, restored domestic supply chains, and affordable domestically produced electricity – are accruing in states and districts represented by Republicans in Congress.  

Ceres is a nonprofit advocacy organization working to accelerate the transition to a cleaner, more just, and resilient economy. With data-driven research and expert analysis, we inspire investors and companies to act on the world's sustainability challenges and advocate for market and policy solutions. Together, our efforts transform industries, unlock new business opportunities, and foster innovation and job growth – proving that sustainability is the bottom line. For more information, visit ceres.org.