President Joe Biden has attracted attention for utilizing a Cold War-era law to allocate taxpayer funds for the manufacturing of electric heat pumps, in an attempt to reduce the use of gas-powered furnaces. Some experts argue that this move is a form of “corporate welfare” and that using wartime policies for policy agendas is inappropriate.
This initiative is presented as part of the Biden administration’s “Investing in America Agenda.” The Department of Energy (DOE) recently announced that $169 million will be distributed among nine projects, aiming to accelerate electric heat pump manufacturing across 15 sites nationwide.
By employing the 1950 Defense Production Act (DPA), Biden leverages a broad range of authorities enabling influence over domestic industries in the interest of national defense. The DOE touts this as a historic announcement, emphasizing Biden’s use of “emergency authority” on the basis of climate change.
They argue that the funding aligns with national security objectives by reducing reliance on energy from foreign adversaries. A significant portion of taxpayer dollars will be allocated to large multinational corporations such as Copeland, Honeywell International, Mitsubishi Electric, and York International Corporation.
DOE Secretary Jennifer Granholm stated that having more American-made electric heat pumps available would enable families and businesses to save money through efficient heating and cooling technology. She added that these investments would generate high-quality manufacturing jobs, strengthen America’s energy supply chain, and promote healthier indoor spaces using locally-developed clean energy technologies.
John Podesta, Biden’s senior advisor for Clean Energy Innovation and Implementation, praised the Defense Production Act funds allocated for heat pump manufacturing, stating that they reflect the president’s recognition of climate change as a genuine crisis. Podesta believes these funds will promote domestic manufacturing, job creation, and American competitiveness in future industries.
Biden’s national climate advisor, Ali Zaidi, explained that the president is leveraging his emergency powers under the Defense Production Act to accelerate the manufacturing of clean technologies and enhance energy security. Critics from outside of Biden’s inner circle have voiced concerns, particularly as this move follows the issuance of new regulations targeting traditional gas-powered furnaces less than two months ago.
Ben Lieberman, a senior fellow at the Competitive Enterprise Institute, criticized the decision as shameful corporate welfare, emphasizing that it is unnecessary as there is no shortage of heat pumps. According to Lieberman, consumer choice should prevail, and the government should not favor one energy source over another.
Karen Harbert, President and CEO of the American Gas Association (AGA), criticized the use of the Defense Production Act, stating that it is meant to protect national security against external threats, not serve as a tool to advance agendas contradictory to the country’s strong energy position.
Harbert highlighted that increased natural gas usage has been responsible for 60% of the electrical grid’s CO2 emissions reductions, underscoring the importance of not undermining the Defense Production Act through its misuse.
Congressional lawmakers, including Rep. Erin Houchin (R-IN), have also expressed their concerns, referring to Biden’s actions as “irresponsible and dangerous.” Houchin criticized the decision, stating that the president is allocating $169 million to electric heat pumps for climate change purposes while Israel is at war and China and Russia remain as threats.