GOP leaders unleash on Janet Yellen over $110B energy tax hike

FIRST ON FOX: A group of 24 Senate Republicans are calling out the Biden administration for “weaponizing” the tax code to stifle domestic energy production in the president’s proposed 2025 budget.

In a letter Thursday to Treasury Secretary Janet Yellen, the GOP lawmakers — led by Sen. John Barrasso, R-Wyo. — highlighted the more than $110 billion in tax hikes targeting domestic production of oil, gas and coal proposed in the budget. They said such an action would only lead to higher prices for Americans and allies worldwide.

“The administration has once again doubled down on weaponizing the tax code against U.S. energy producers,” Barrasso and the other senators wrote. “It is alarming that the administration believes utilizing our nation’s abundant natural resources will be detrimental to long-term energy security.”

“Sadly, the administration would willingly suppress energy production knowing it means fewer jobs and higher prices for the American people,” they continued. “America is fortunate to have abundant energy resources. Our nation needs to be focused on unleashing American energy and innovation instead of throwing away one of our biggest economic and geopolitical advantages.”

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Sen. John Barrasso, R-Wyo., speaks during a news conference at the U.S. Capitol on Sept. 19, 2023. (Anna Moneymaker/Getty Images)

Earlier this month, Biden released his fiscal year 2025 budget, a behemoth $7.3 trillion government spending package that Republicans quickly condemned and characterized as a non-starter. As part of the proposal, the Treasury Department released a green book detailing the mechanisms for raising government revenue, a report which listed tax hikes on energy production.

The Republicans noted that in the green book, the Treasury Department explained that it would strip tax incentives worth $110 billion from the energy industry because “oil, gas, and coal tax preferences distort markets by encouraging more investment in the fossil fuel sector than would occur under a neutral system.” 

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“This market distortion is detrimental to long-term energy security and is also inconsistent with the administration’s policy of supporting a clean energy economy, reducing our reliance on oil and reducing greenhouse gas emissions,” the Treasury Department added.

President Biden has repeatedly taken aim at the fossil fuel industry as part of his sweeping climate agenda. (Getty Images)

Among the tax incentives the budget would strip are the intangible drilling costs incentive, which allows independent producers to deduct expenses related to drilling, and the percentage depletion incentive, which, according to the lawmakers, allows producers to have a deduction of taxable income to reflect the declining production of reserves over time.

In their letter, the Senate Republicans said the administration’s explanation in the green book is “troubling” and “acknowledges its intention to chill investment in conventional energy production.”

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“It is alarming that the administration believes utilizing our nation’s abundant natural resources will be detrimental to long-term energy security,” they wrote to Yellen. “Sadly, the administration would willingly suppress energy production knowing it means fewer jobs and higher prices for the American people.”

Treasury Secretary Janet Yellen speaks during a press conference in Mexico City on Dec. 6, 2023. (RODRIGO OROPEZA/AFP via Getty Images)

Meanwhile, the budget comes months after the Department of Energy’s Energy Information Administration (EIA) published a 59-page report showing that the renewable energy sector enjoys significantly larger taxpayer backing than the fossil fuel industry. 

According to the EIA report, while renewable energy sources like wind and solar power account for about 21% of domestic electricity production, such sources received a staggering $83.8 billion in subsidies, by far the largest share compared to any other category. 

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In addition to Barrasso, Senate Minority Whip John Thune, R-S.D., Sen. Shelley Moore Capito, R-W. Va., Sen. Tim Scott, R-S.C., and Sens. Mike Crapo and James Risch of Idaho also signed the letter.

The Treasury Department did not immediately respond to a request for comment.