The Best Investment Strategy to Navigate the Implications of Trump’s Threat to Cancel Unspent Funds from Biden’s Climate Law
Former President Donald Trump has made a bold statement that he would cancel all unspent funds from President Joe Biden’s signature climate law if he wins the presidential election on Nov. 5. However, the reality is that the vast majority of grants will be spent by the time a new president takes office in January, posing a significant legal challenge for such a move, according to Biden administration officials.
Under the 2022 Inflation Reduction Act, the Biden administration has already awarded $90 billion in grants for climate, clean energy, and other projects. This amounts to 70% of the law’s total climate-focused grant money and over 80% of what was available before 2025. An additional $15 billion could be awarded in the near future.
The administration is committed to distributing the funds quickly and fairly, with White House Deputy Chief of Staff Natalie Quillian emphasizing that unspent funds and tax credits for initiatives like electric vehicles and renewable energy would be challenging to freeze if Trump were to regain office.
Despite Trump’s intentions to rescind unspent funds under the Inflation Reduction Act, the law is clear that the executive branch cannot withhold appropriated funds based on policy disagreements. The Act, valued at over $400 billion, is the largest U.S. climate law to date, encompassing grants, tax incentives, and credits to promote clean energy deployment.
While the Republican Party has expressed opposition to the Inflation Reduction Act, attempts to repeal it have been unsuccessful in the past. House Republicans have made 42 attempts to dismantle the law, but have not garnered enough support. The upcoming election will determine whether the Act will face further scrutiny.
Agencies responsible for implementing climate-related funding under the Inflation Reduction Act are moving swiftly to allocate resources. The Department of Energy, Environmental Protection Agency, Interior Department, and Treasury Department have already obligated a significant portion of their funding.
Trump’s ability to repurpose these funds is limited by the protections outlined in the 1974 Impoundment Control Act. These measures restrict the authority of presidents to withhold funds for federal spending based on policy preferences, ensuring that allocated funds are used as intended.