U.S. President Joe Biden will commemorate the one-year anniversary of signing the Inflation Reduction Act, his landmark clean energy legislation, by launching a campaign to clarify its purpose to the American people. The bill, which focuses on combating climate change, offers tax credits to support the purchase of electric vehicles and the production of renewable energy. It also includes provisions to assist seniors with prescription drug costs and expands certain aspects of Obamacare, while requiring wealthier individuals and corporations to contribute financially. Despite its passage, the IRA has received mixed reviews, and many Americans, including Biden supporters, remain unfamiliar with its contents.
To address this lack of awareness, President Biden will deliver a speech at the White House, joined by lawmakers who played a role in passing the legislation. The administration has also shared online testimonials from Americans who have benefited from the IRA. Wall Street analysts have praised the economic potential of the bill, predicting significant investments and job creation in the coming years. Since its enactment, over 270 clean energy projects have been announced, with a total investment of $132 billion. Approximately half of these investments are directed towards electric vehicles and batteries, while the remainder supports renewable energy sources such as solar, wind, and nuclear power. These investments are expected to generate more than 86,000 jobs, including 50,000 related to electric vehicles. Moody’s, in a recent report, highlighted the positive impact of the legislation on GDP growth, productivity, and innovation.
However, some countries, particularly in Asia and Europe, are grappling with protectionist economic policies embedded in the IRA. While the bill was intended to reduce the U.S. budget deficit by $300 billion over a decade through measures such as a minimum corporate tax and drug price negotiations, its impact on deficit reduction has fallen short of expectations. Tax credits provided by the legislation have been well-received by companies, leading to job growth and environmental benefits, but also increasing costs. Republicans have used budget negotiations to scale back Biden’s efforts to increase tax revenue from wealthy individuals, and pharmaceutical companies have taken legal action against the administration’s drug pricing plans. As a result, financial projections now anticipate budget deficits ranging from $700 billion to $1.1 trillion over the next ten years.
The name of the legislation, the Inflation Reduction Act, was chosen to address concerns about rising prices ahead of the 2022 congressional elections. However, President Biden has expressed regret over the name, as it does not accurately reflect the bill’s focus on generating economic growth. While inflation rates have decreased over the past year, economists attribute this decline to factors unrelated to the IRA. In recent weeks, President Biden and his administration have embarked on a nationwide campaign to educate the public about the strength of the economy and the positive impact of his legislative agenda. However, many Americans who voted for Biden in 2020 believe that the economy has performed poorly under his leadership, and some are uncertain about supporting him in the 2024 election. A significant portion of Biden’s 2020 supporters are unaware of his major policy initiatives to address inflation and invest in infrastructure. Only 27% of Americans claim to have a good understanding of the IRA, according to a recent poll.
Critics argue that the White House missed an opportunity in naming the legislation, as the name does not align with the public’s perception of its impact on inflation. Despite the positive provisions within the bill, the Democratic administration has struggled to receive credit for its accomplishments. Moving forward, President Biden and his team will continue their efforts to inform the public about the benefits of the IRA and the administration’s broader economic agenda.
