Biden’s $1.6 Trillion Investment In Green Energy Sector Has Hit Stonewall In The Form Of Unspent Cash
President Joe Biden announced a new $1.6 trillion investment initiative that he plans to use to transform the U.S. However, the plan has encountered a hurdle in the form of unspent funds. Here’s everything you need to know about these green energy initiatives: Biden’s plan, which aims to rebuild infrastructure and bring more environmentally friendly manufacturing back to the country, involves a significant investment of $1.6 trillion. This plan not only aims to make the country’s economy greener but also to outcompete China. It comes with tax breaks, which will be awarded for initiatives such as electric vehicles, home energy updates, and the manufacturing of clean energy.
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After accounting for tax breaks, which make up about one-third, the remaining money from the $1.6 trillion has been earmarked for various government initiatives, including building new infrastructure such as highways, reducing greenhouse gas emissions, and investing in semiconductor manufacturing.
Four bills make up $1.1 trillion: the Bipartisan Infrastructure Law of 2021 (BIL), the Inflation Reduction Act of 2022 (IRA), Creating Helpful Incentives to Produce Semiconductors (CHIPS), and the American Rescue Plan (ARP). However, $331 billion of that $1.1 trillion will not be available until the next two fiscal years.
This means Biden has less money and even less time to use the unspent cash.
In April 2024, President Biden and Vice President Kamala Harris announced several historic milestones for clean energy, including a plan to create a carbon pollution-free power sector by 2025. One milestone included permitting 25 gigawatts by 2025, which would be enough clean energy to power at least 12 million homes across the U.S.
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While these plans and milestones are ambitious and have prompted private companies and federal agencies to announce plans to invest billions in green energy initiatives, Biden faces a significant challenge. How is he going to spend all that money by the November elections?
Despite initiating spending efforts, Biden has only spent a small portion — about $125 billion — of the $1.6 trillion budget. Another $89 billion was allocated to two laws: The IRA and the CHIPS Act. However, it’s unclear how much of that money has been spent.
A reason why Biden has so much unspent cash left is because of a lack of distribution of funding. For example, the government has only awarded less than $700 million of the $54 billion that Congress approved for the CHIPS Act.
The unspent cash could potentially pose a significant challenge for Biden as the election draws near, which is less than six months from now. His political rival, Donald Trump, has made it clear that if he wins the election, he plans to dismantle Biden’s climate law. In April, Trump met with top oil CEOs to discuss campaign funding and plans to reverse drilling restrictions under the Biden administration.
This means that Biden has less than six months to spend as much of the cash as he can, especially if he hopes this will secure more votes for him in November. Whether this is achievable or not is still unclear. In total, spending announcements made by Biden and the Department of Commerce have totaled $543, but it is unclear how much of that amount has been distributed.
“Well, there’s a lot left to do. First of all, that money needs to be deployed,” White House senior clean energy advisor John Podesta revealed at a policy forum in Washington.
If Trump wins the election, any remaining unspent funds will be reviewed, and a statement from Trump’s campaign spokesperson, Karoline Leavitt, said, “President Trump will repeal Joe Biden’s radical EV mandates to save America’s auto industry.”
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