When former President Joe Biden’s signature Inflation Reduction Act (IRA) passed in 2022, it did so along party lines with not a single Republican voting for it. At the time, a Senate one-pager summarized the law as costing taxpayers $369 billion, based on Congressional Budget Review (CBO) estimates.
A new study from the Cato Institute finds that the law could cost as much as $4.67 trillion by 2050. That’s roughly 12 times the stated cost. The study also concludes that the subsidies are undermining innovation and driving investments toward subsidy farming rather than satisfying consumer demand.
“The government should not have a hold on the economy in such a way that it can truly distort entire markets, and that’s what the Inflation Reduction Act is,” Joshua Loucks, research associate with Cato Institute and co-author of the analysis, said in a video explaining the study.
The Trump administration has been executing a series of reviews of regulations that federal agencies passed during the Biden years. Repealing some agency decisions may require congressional action. Due to the massive costs and market-impacting effects of the IRA, the study’s authors argue Congress should take a hard look at it. The law, they say, should be fully repealed, or Congress should place limitations on the subsidies, which the IRA mostly lacks.
Fact-finding endeavor
Loucks and his co-author Travis Fisher, director of energy and environmental policy studies at the Cato Institute, explained that the impetus for doing the study was the wildly varying estimates of the costs of the IRA that came out since its passage. While the CBO pegged the figure at $369 billion, Goldman Sachs estimated in May 2023 that it would be closer to $1.2 trillion. There were other estimates as well, all coming to different conclusions. […]
— Read More: justthenews.com
