In Washington – ACMA Insider – May 4, 2023

GOP Aims to Remove Composites Market Tax Incentives in Debt Ceiling Bill Wind, hydrogen, electric vehicle and more markets will …

GOP Aims to Remove Composites Market Tax Incentives in Debt Ceiling Bill

Wind, hydrogen, electric vehicle and more markets will lose federal tax credits included in the Inflation Reduction Act under a House Republican plan to raise the debt ceiling. These cuts would undo almost all of the tax credits passed under last year’s Inflation Reduction Act.

The Limit, Save, Grow Act narrowly passed by House Republicans on April 26, would raise the federal debt ceiling but repeal or substantially limit most core provisions of the IRA, including the green energy tax credit, solar and wind power incentives, electric vehicle incentives, clean hydrogen tax credits, as well as clean energy production and investment credits. Adding urgency to this negotiation, the Treasury Department announced on May 1 that the government will hit its debt ceiling on or about June 1, 2023.

Speaker of the House Kevin McCarthy (R-CA) pushed the bill as a starting point for negotiations with the Biden Administration and the Democratic-controlled Senate to raise the federal debt ceiling.  Congress controls the federal budget, so must affirmatively act via legislation in order to raise the federal debt ceiling.  Failing to do so would mean the federal government would default on its debts, potentially. Previous debt ceiling negotiations have involved similar levels of political theater before the two parties reach an agreement. However, this cycle’s path to an agreement is unclear, so the future of these proposed cuts is highly uncertain.   

Speaker McCarthy held the Republican caucus together to pass this package but needed to remove some cuts after Iowa Republicans threatened to oppose the bill over cuts to ethanol fuel programs. Even with that change, four Republican (the maximum allowed that would still allow passage) voted against the McCarthy bill. Conservatives in the House Freedom Caucus have said they will not accept any watering down of this bill, while Senate Majority Leader Chuck Schumer (D-NY) has already declared the House bill as “dead on arrival” in the Senate.   

We work for the composites industry. Contact V.P. of Government Relations, Dan Neumann, if there are specific provisions of interest to your company, or with any questions or comments. 

Composites in Aerospace Receives New Attention From NASA, ACMA Members

NASA’s High-Rate Composite Aircraft Manufacturing (HICAM) program provides an opportunity to expand the role of composites in aerospace applications, paving the way for future applications that could expand a growing market segment. This program follows successful efforts by ACMA to expand NASA R&D on composites.

ACMA secured language specific to composites in last year’s NASA reauthorization package, legislation that ultimately passed Congress as part of the CHIPS & Science Act.  By increasing the speed of production of composites, the HICAM program will foster further adoption of lightweight durable composites. The goal of the program is to reduce fuel consumption to lower costs, reduce greenhouse gas emissions, and to maintain U.S. aerospace competitive advantage. More information on the HICAM program can be found here 

In last year’s NASA reauthorization, ACMA fought for language that called on NASA to maintain “large-scale flight test experimentation and validation” programs aimed at transitioning “new technologies and materials, including associated manufacturing processes.” The bill specifically notes the need for “advanced materials and manufacturing processes” and “high-temperature structures and materials.”  

ACMA specifically fought for language, included in the bill, that calls for NASA to establish an advanced materials and manufacturing technology program to develop “new materials including composite and high temperature materials, from base material formulation through full-scale structural validation and manufacturing” as well as developing “noninvasive and nondestructive” testing, a crucial hurdle for wider adoption of composites in the sector.