Former President Donald Trump announced his plan to rescind any unspent funds under the Inflation Reduction Act (IRA) if he were to be elected in November. Speaking before the Economic Club of New York, Trump criticized the Democrats' climate law, referring to it as the "Green New Scam," and pledged to terminate the Green New Deal.

Trump's threat to the climate law intensifies the urgency for the Biden administration to promptly utilize the funds from the law. This move also escalates the ongoing debate among Republicans on how to address the law, which has already benefited GOP-led communities through project investments and funding.

Although Trump did not specify which IRA programs he would target, some Republican leaders have criticized the law's funding for green banks and other programs. However, other Republicans support keeping certain IRA tax credits that support manufacturing. Trump's former trade adviser, Robert Lighthizer, has even suggested that some provisions of the law, particularly those supporting U.S. factories, could be retained under a potential second Trump administration.

The Biden administration has already announced billions of dollars in IRA funding for clean energy projects. However, the exact amount of funding that has been obligated or spent remains unclear, thereby leaving the possibility for Trump to claw back the unspent funds.

Earlier this year, POLITICO's analysis revealed the significant challenge faced by the Biden administration in efficiently spending the direct funding programs outlined in the IRA. As of April, around $60 billion in tentative funding decisions had been announced out of the $145 billion allocated for energy and climate programs. Many of these funding decisions still need to meet specific criteria before they can be formally allocated.

In addition to his plan to rescind unspent funds, Trump discussed the establishment of a government efficiency commission, proposed by Tesla CEO Elon Musk, whom Trump has increasingly embraced. Trump suggested that Musk could potentially lead the commission, which would conduct a comprehensive audit of the federal government's financial operations and recommend substantial reforms to eliminate fraud and improper payments.

Furthermore, Trump reiterated his belief that Vice President Kamala Harris is waging a "war" on U.S. energy, despite the record-high oil production during the Biden administration. To address this, Trump pledged to declare a national emergency to boost domestic energy supply.

The majority of the emissions reductions in the IRA come from tax credits for clean energy technologies, which would require congressional action to repeal. The law also encompasses grant programs for methane emissions reduction, energy efficiency enhancement, and the creation of green banks across the country, some of which have already faced criticism from Republicans. The law also provides increased funding for an Energy Department loan office that saw a decrease in activity during the previous Trump administration.

Democrats face high stakes as a potential Trump administration would have significant influence over the pace of direct spending under the law. Trump has promised to restore presidential authority to withhold congressionally approved spending that he deems wasteful.

The Harris campaign issued a memo responding to Trump's announcement, highlighting her economic agenda and criticizing his plans for a second term. The campaign memo stated that mainstream experts agree on the negative consequences of Trump's agenda, including a shrinking economy, decreased job growth, increased inflation, a higher national debt, and mounting taxes on the middle class.

While repealing tax credits under the IRA would necessitate congressional action, Republicans are already considering renewing Trump's 2017 tax law, with provisions from the IRA potentially serving as a source of funding. Despite some House Republicans advocating for the protection of investments in their districts resulting from the law, others have sought to repeal tax credits and other programs under the IRA.

Treasury Secretary Janet Yellen emphasized the economic benefits of preserving the tax provisions within the IRA during a speech in Raleigh, North Carolina. Yellen warned against rolling back these provisions, stating that it would be a historic mistake, increase costs for families, and potentially give countries like China a competitive advantage in clean energy industries.

As the upcoming election approaches, Trump's pledge to rescind unspent funds under the IRA signifies a potential reversal of key aspects of the Democrats' climate law and its impact on Republican-led communities. The effects of his proposed actions will undoubtedly impact the ongoing conversation among Republicans and further intensify efforts to utilize the funds allocated by the climate law.