Congress is expert at legislative nomenclature. Bills often get colloquial names to appeal to various interests. But few are as creative as 2022’s “To provide for reconciliation pursuant to title II of S. Con. Res. 14.”, passed April 16 last year and better known as President Joe Biden’s “Inflation Reduction Act,” or IRA.
Inflation is under control. Jobs are up and unemployment is down. The U.S. economy is strong and the long-predicted recession appears to have been a bad dream.
The IRA had little to do with all of that because it really wasn’t about inflation at the core. It was about funding government efforts to reduce greenhouse gas emissions and promote renewable energy technologies and carbon dioxide reduction. Hundreds of billions of dollars of government funding, in the form of grants, loans, and tax incentives.
It seems to be working, at least in terms of directing a lot of federal dollars in directions the Biden administration favors. Today, President Biden is scheduled to make a White House address, accompanied by key legislators, touting the act and the progress his administration has made. His appearance will be accompanied by a video on invest.com, featuring testimonials from beneficiaries of the IRA.
It’s a necessary move, according to Reuters: “Twelve months after it passed, the law commonly referred to as the IRA, like most major U.S. legislation, is drawing mixed reviews. Meanwhile, many Americans, even those who support Biden, don’t know much about it, according to Reuters opinion polls.”
Yesterday, Advanced Energy United (AEU), a Washington broad-based energy lobbying group, commented, “A year after its signing, the Inflation Reduction Act (IRA) is working as intended, fueling a new era of investment in domestic advanced energy manufacturing and empowering the growth of the technologies and services America needs to secure a 100% clean energy future.”
A study by AEU found, “Combined with the Infrastructure Investment and Jobs Act (IIJA) of 2021, the IRA is expected to lead to roughly $444 billion in federal investment and $1.2 trillion in private investment, resulting in $2.8 trillion in total GDP, 23 million jobs, and $60 billion in annual consumer savings – all told, a six-fold return in investment in federal dollars in advanced energy growth.”
Greg Wetstone, head of the American Council on Renewable Energy, commented, “With a year under our belt, we can say with confidence that the new law is working to accelerate the nation’s energy transition, spur national economic growth, and launch a renaissance in American manufacturing. Hundreds of billions of dollars have been committed to new clean energy investments over the past year. This investment will lead to dozens of new manufacturing facilities across the U.S., thousands of megawatts of additional wind and solar power capacity, hundreds of thousands of good-paying jobs, significant cost savings for American electricity consumers, cleaner air, and progress toward a more stable climate.”
Reuters noted that Moody’s on Tuesday offered a positive view of the IRA: “Over the past year, there have been signs that the legislation is contributing to a surge in clean energy manufacturing and related industries such as semiconductors, and factoring into companies’ investment decisions, including in the auto, utilities and oil and gas sectors.”
Predictably, Fox News, playing off the inapposite name, greeted the anniversary with a raspberry: “It has been one year since Joe Biden and Congressional Democrats passed their signature Inflation Reduction Act (IRA) – a disastrous law that did nothing to address inflation and is now confirmed to have added hundreds of billions to the deficit.”
The IRA got its name from a lengthy, messy Senate wrangle, starting with the Biden “Build Back Better Act” proposal. It emerged as the Senate majority Democrats were trying to fashion a budget reconciliation bill, an omnibus measure that wrapped up spending for the entire year. The Biden proposal ran afoul of Sen. Joe Manchin (D-W.Va.), the energy conservative who is chairman of the Senate Energy and Natural Resources Committee.
Manchin and Senate Majority Leader Chuck Schumer (D-N.Y.) worked out a compromise, replacine the original Biden proposal with a somewhat altered bill that Manchin could support. They called it the IRA. It passed the Senate on an entirely partisan vote, 51-50, with Vice President Kamala Harris providing the tie-breaker. It then passed the House, still in Democratic control, by 220-207 on Aug. 12 and Biden signed it into law on Aug. 16, 2022.
The name was created to make the big spending more palatable to voters concerned by what was then rapid inflation. Biden has said he regrets the name. Reuters reported that Biden said last week that the name doesn’t fit “because it has less to do with reducing inflation than it has to do with providing alternatives that generate economic growth.”
–Kennedy Maize