Nuclear energy experts are fighting to preserve crucial federal funding programs as the industry faces potentially devastating budget cuts that could undermine America’s ability to compete with China in deploying advanced reactor technologies.
At a Glance
- The Department of Energy’s Loan Programs Office (LPO) faces a potential 58.5% staffing cut with 123 out of 210 employees opting for retirement buyouts
- Nuclear advocates warn these cuts could cripple America’s ability to finance and develop next-generation nuclear technologies
- President Trump’s executive orders aim to “reinvigorate” the nuclear sector, but industry experts say more regulatory reform and funding are needed
- Without proper federal support, experts warn China could outpace the U.S. in developing small modular reactors crucial for powering AI data centers
- House Republicans’ proposed budget cuts could eliminate key financial support mechanisms for advanced nuclear development
LPO Staffing Crisis Threatens Nuclear Development
The U.S. Department of Energy’s Loan Programs Office, critical for financing major energy infrastructure projects, faces a potential staffing crisis that could severely impact America’s nuclear future. According to reports, 123 out of 210 LPO employees have opted for retirement buyouts under President Trump’s deferred resignation program, potentially resulting in a 58.5% reduction in staff. While employees over 40 have a 45-day reconsideration period, the potential exodus has alarmed nuclear industry advocates who view the LPO as essential to America’s energy security.
A coalition of organizations led by Thomas Hochman from the Foundation for American Innovation has sent an urgent letter to Energy Secretary Chris Wright highlighting the danger. The letter emphasizes that the LPO’s specialized technical staff provides crucial expertise for underwriting and monitoring large-scale energy projects, particularly new nuclear developments. Without this support, advocates warn that America risks falling behind global competitors in next-generation nuclear technology deployment.
— Kimberly Forsytheđź––e/Atomiquarchy (@NewWrldOptimist) May 28, 2025
Critical Funding Mechanism for Nuclear Projects
The LPO has proven essential for major nuclear projects, providing loans for Georgia’s Plant Vogtle AP1000 reactors and a $1.56 billion loan guarantee for Michigan’s Palisades nuclear power plant. Emmet Penney from the Foundation for American Innovation expressed serious concerns about potential Department of Government Efficiency (DOGE) cuts, noting that the LPO is already “lean and highly efficient” compared to private-sector equivalents. Industry experts stress that without federal backing, private capital will not take on the substantial risks of developing new nuclear projects.
“If we can’t leverage the LPO to de-risk these projects so that private capital wants to lend for new nuclear, so that utilities want to buy new nuclear, and so that people want to build new nuclear, then new nuclear won’t happen. The private sector cannot bear the risk. They will not bear the risk alone. This is especially true in an environment with ongoing ambiguity about supply chains and tariffs.”, said Emmet Penney.
Tyler Norris from Duke University emphasized the LPO’s irreplaceable role, noting that nuclear projects require substantial upfront capital investments that make federal backing crucial to attract private investors. Without this support, nuclear advocates warn that America’s energy independence and technological leadership face serious threats from international competitors, particularly China, which is aggressively developing and deploying advanced nuclear technologies.
Broader Budget Concerns and Industry Impact
Beyond the LPO staffing issues, the U.S. House of Representatives’ proposed fiscal year 2025 budget resolution has raised additional concerns for the nuclear industry. The reconciliation package includes significant cuts to tax credits and loan programs critical for advanced nuclear reactor development. These reductions come despite President Trump’s May executive orders aimed at reinvigorating the nuclear sector and the bipartisan ADVANCE Act of 2024, which sought to strengthen America’s nuclear capabilities.
“Despite the White House and the secretary of energy’s strong pronouncements supporting nuclear energy expansion as a key domestic energy resource, draft reconciliation language from the House Ways and Means and Energy and Commerce Committees all but eliminates federal support for new nuclear”, said Leslie Abrahams.
Industry experts warn these cuts could severely hamper America’s ability to develop and deploy small modular reactors and other advanced nuclear technologies essential for meeting growing energy demands, particularly from AI data centers. Reactor developers and operators have emphasized that this is a race America “cannot afford to lose” as global competition intensifies. Without sufficient regulatory reform and financial support, the U.S. risks surrendering its nuclear leadership position to foreign competitors at a critical moment in the global energy transition.
