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The Significance of the Inflation Reduction Act
This week marked the first anniversary of the Inflation Reduction Act (IRA), President Joe Biden’s signature piece of legislation. The Biden administration had planned to celebrate the occasion by dispatching officials for appearances across the country, culminating with a major speech by Biden at the White House. However, these events were overshadowed by the latest Donald Trump indictment, and the efforts to promote the law went largely unnoticed.
Efforts to tout legislation rarely break through the political noise and move the needle on public opinion. However, major changes in policy can eventually affect the political conversation and change expectations of how laws should work. The Affordable Care Act, for example, faced initial backlash but went on to create a new reality, such as coverage of preexisting conditions, that has proved politically impossible to dislodge. The IRA could have a similar impact on American life.
The IRA and Climate Change
One significant aspect of the IRA is its impact on climate change. The United States has long been a major emitter of carbon, and its federal government has often flip-flopped on its stance on the crisis. The IRA codifies the requirement that the federal government regulate carbon under the Clean Air Act, which is a significant step forward. The law also includes a range of subsidies and tax credits for renewable energy and clean technology, which has led to increased investment in these sectors. However, the success of the IRA in reducing U.S. emissions will depend on state and local policies, which currently suggest resistance to change.
The IRA and Economics
The IRA challenges the conventional wisdom of the past four decades by aiming to crowd in private investment through government-directed industrial policy. So far, it appears to be working. Private companies have announced over $200 billion in manufacturing commitments in clean energy, electric vehicles, and batteries since Biden took office. This level of business investment is higher than previous economic recoveries and is expected to increase further as the IRS writes the rules and guidance for the tax credits authorized by the law. The IRA aims to reinvigorate domestic manufacturing and provide jobs in economically disadvantaged areas.
Overall, the Inflation Reduction Act has the potential to be a significant piece of legislation that could shape American life in deep, enduring ways. Its impact on climate change and the economy could be substantial, but its success will depend on various factors, including state and local policies and the willingness to go even further in addressing these issues.
This Article The IRA: A Deep Dive into Biden’s Landmark Legislation and Its Impact on Climate and Economics was first Published on World Weekly News
Source: The IRA: A Deep Dive into Biden’s Landmark Legislation and Its Impact on Climate and Economics
