Doing the math on the Inflation Reduction Act
Soon after he entered the White House, President Biden announced a $4 trillion domestic spending agenda. More than a year later, the chunk of that plan that appears most likely to pass — the result of an agreement struck last week between Senator Chuck Schumer of New York, the majority leader, and Senator Joe Manchin of West Virginia, a centrist Democrat — will be considerably smaller.
The bill, the Inflation Reduction Act of 2022, involves at least $260 billion in spending over 10 years, but it would also raise taxes by $326 billion in the same period. That’s according to an analysis by the Joint Committee on Taxation, a nonpartisan congressional commission. A separate analysis, released on Friday by the Wharton School, found that the bill would have almost no effect on G.D.P., and would slightly increase inflation for the next two years but then lead to lower prices.
Republicans have denounced the bill as a giant tax increase and a major expansion of government spending. But the new estimates suggest that it is neither of those things, reports The Times’s Jim Tankersley.
Here’s what’s in the bill (all of the figures are over 10 years, and most come from the Joint Committee’s study):
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Tax credits to increase production of electricity from renewable or non-carbon sources. Cost: $98 billion.
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New and expanded tax credits for electric vehicle purchases and for improving the energy efficiency of homes. Cost: $51 billion.
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