Former US military leaders are lobbying Congress to oppose a Republican initiative aimed at repealing billions in tax credits for critical minerals, arguing this move would leave the nation vulnerable to China.
A group of 23 retired four-star generals and admirals approached Jason Smith, chair of the House Ways and Means Committee, urging the protection of five tax breaks related to advanced manufacturing, clean vehicles, and electricity production. The committee plans to vote on the credits’ future next week.
These former military leaders, affiliated with Safe—a group focused on critical minerals and energy security funded by charitable foundations, industry, and the US government—include Admiral Dennis Blair, former director of national intelligence, and General Joseph Dunford, the 19th chairman of the joint chiefs of staff.
The ongoing debate highlights the unusual political alliances formed around the Biden-era Inflation Reduction Act (IRA), which offers significant incentives for green energy and critical minerals projects.
Support for the legislation extends to industries and some Republicans, particularly where district benefits are evident. In contrast, environmental groups have raised concerns about the impacts of mineral extraction on wildlife and ecosystems.
Businesses have launched a multimillion-dollar lobbying effort to preserve the IRA following Donald Trump’s victory in the recent presidential election. Trump has criticized the legislation, describing it as a “green new scam” and aims to repeal it to fund proposed tax cuts.
Repealing the IRA tax breaks could impact several critical minerals projects accelerated by the Trump administration, including lithium initiatives in Arkansas and Nevada. Essential minerals such as cobalt, nickel, and lithium play crucial roles in electronic equipment, renewable energy technologies, and military hardware.
Some Republican lawmakers advocate for a complete repeal of the act, arguing it could burden taxpayers with a $1 trillion cost over ten years while supporting renewable energy at the expense of fossil fuels.
The lobbying effort follows earlier concerns from the Department of Defense regarding China’s potential to disrupt US supply chains by limiting rare earth and processing equipment exports.
In a letter to Smith and congressional leaders, the generals warned that eliminating the credits might endanger $125 billion in critical mineral investments vital to defense industries, risking 100,000 direct jobs across 15 states, and allowing Chinese companies to gain a larger global market share.
“Repealing or weakening these provisions would not only stall the growth of critical industries — it would leave the United States vulnerable to supply chain manipulation by hostile regimes and further delay efforts to rebuild the nation’s defense industrial base,” the letter stated.
Trump has ordered all federal agencies to pause the disbursement of IRA funds, but the law’s future relies on a Congressional vote. A simple majority in both houses, passed under a budget resolution, is required to repeal it, with no filibuster opportunities.
Although Republicans hold majorities in Congress, IRA supporters hope some party members will resist repealing the tax breaks, which create jobs in their districts.
Recently, a group of Republican lawmakers wrote to Smith, emphasizing the importance of IRA tax credits for states with large clean electricity projects. They acknowledged the possibility of phasing out the credits.
“The IRA will almost certainly survive but not in its current form,” noted Frank Maisano, a partner in Bracewell, a law and lobbying firm, suggesting changes like sunset provisions to end certain tax credits sooner than planned.
