The Inflation Reduction Act (IRA) was passed by Congress and signed into law by President Joe Biden on August 16, 2022. The bill was badly mistitled and intentionally so.

The Biden administration and Democrats in Congress took advantage of Americans’ desire for a response to high and rising prices for food, fuel, and other basic consumer goods. The people of the United States wanted federal leadership to take steps to alleviate inflation. Of course, the inflation itself was an artifact of federal overspending coming out of the pandemic at a time when supply chain issues and various federal and international policies were hampering supply. When demand outpaces supply, prices rise.

The IRA, in fact, contributed to higher inflation. Its provisions—the massive spending on projects no one was demanding, and policies limiting products people wanted—drove prices higher.

In truth, the IRA was nothing more nor less than a backdoor effort to impose the Green New Deal scam that Biden and company had tried and failed to pass through Congress previously. Biden promised an all-of-government approach to fighting climate change, and the IRA was the vehicle. They repackaged the Green New Deal as Inflation Reduction and brought it up for a vote. It passed without a single Republican voting in favor of it.

Critics of the law warned of its inflationary effects at the time of its passage, but the mainstream media chose to ignore their claims.

Since its passage, as critics feared, the IRA resulted in billions of dollars being wasted on various green boondoggles, including companies that were given huge infusions of taxpayer dollars in IRA spending but still went bankrupt because of poor technology and lack of consumer demand. Billions more taxpayer dollars have been shipped, without accountability or transparency, to environmental startups with no track history but with strong connections to Biden, Biden administration bureaucrats, and powerful Democratic Congress swamp creatures.

More than a year after he signed the IRA into law, when confronted with the fact that it wasn’t doing anything to curb inflation, Biden admitted the truth, saying at a fundraiser the IRA “has nothing to do with inflation; it has to do with … $368 billion, the single-largest investment in climate change anywhere in the world—no one has ever, ever spent that.”

The White House estimated the total cost of the IRA, not just the climate program portions, would be $392 billion over ten years, with the Congressional Budget Office (CBO) estimating it would add $270 billion to the federal debt.

These estimates, as federal program estimates commonly are, were laughably low. Based on spending that is already out the door, the costs of the climate portions of the bill alone exceed Biden’s estimate for the entire bill.

As detailed in a new study by The Heartland Institute’s Tim Benson, “The High Costs of Climate Scams: Assessing the Green Giveaways in the Inflation Reduction Act,” most of the costs come in the form of tax credits given to various green energy programs.

As Benson explains, the initial federal allocation for just three tax credits tops $182 billion: the investment and production tax credit, tax credits for individual energy efficiency improvements, and the zero emissions vehicle tax credit. In addition to tax credits, there are direct federal spending, both directed and discretionary; various subsidies for the adoption of selected technologies or industrial and agricultural practices approved by the government; other subsidies; and low-interest loans and loan guarantees.

Under Environmental Protection Agency guidance issued after the IRA was passed, many of the programs are open-ended, with no caps on enrollment or claims of tax credits, so the cost estimates have ballooned. Benson examines the myriad estimates from different groups, writing,

In November 2022, Credit Suisse, the Swiss global investment bank and financial services firm, estimated total federal spending on these “green” provisions in the IRA would [because of their uncapped nature] exceed $800 billion, double the Biden administration’s claims, and possibly reaching as high as $1.7 trillion.

In April 2023, the U.S. Congressional Joint Committee on Taxation (JCT), … put the spending figure at $570 billion from 2023 to 2033.18 In June of 2023, the JCT increased its estimate to $633 billion.

Also in April 2023, Goldman Sachs, the American multinational investment bank and financial services company, estimated the IRA’s spending incentives at $1.2 trillion through 2032.

In a March 2023 report, the Brookings Institution, a left-wing think tank, produced a cost estimate for the IRA’s green subsides that ranged from $900 billion to $1.2 trillion through 2031.

A February 2024 analysis from the Committee for a Responsible Federal Budget (CRFB), a nonpartisan think tank co-chaired by the former Republican governor of Indiana, Mitch Daniels, and Leon Panetta, Secretary of Defense during the Barack Obama administration and former Chief of Staff to President Bill Clinton, put the cost estimate of IRA at $870 billion through 2031 and $1.1 trillion through 2033. An estimate from the Cato Institute in March 2024 found the cost of the IRA’s green subsidies could be north of $1.8 trillion over a decade.

In January 2025, CBO director Philip Swagel announced that the green subsidies in the IRA would increase budget deficits by $825 billion from 2025 to 2035, far above the original $270 billion estimate from 2022 to 2031.

President Donald Trump and his appointees are well aware of the IRA scam, its detrimental interference in consumer choice, its skewing of capital investment, and its undermining of sound energy policy. Trump directed his agencies to look for unspent IRA funds, block new spending, and claw back what they could. Lee Zeldin, Trump’s Environmental Protection Agency director, has already identified more than $20 billion dollars held in a private bank to be shipped to Biden/Democrat crony nongovernmental organizations, has directed the bank not to disperse the funds, and is working on getting the money returned to the government. But administrative action is not enough. The law was approved, narrowly, by Congress. As a result, some of the green spending can only be blocked or clawed back if Congress rescinds it.

With this in mind, a coalition of groups, led by our allies at the Competitive Enterprise Institute, sent a letter to the Republican-controlled Congress requesting they stand by their earlier stance on the IRA and get back as much of the money as legally possible. The letter, signed by 53 leaders of research institutes and state-based think tanks across the country, including James Taylor, president of The Heartland Institute, and Cameron Sholty, executive director of Heartland Impact, states in part,

The undersigned organization urge all legislators, regardless of party, to make it a priority to get rid of the IRA’s Green New Deal provisions. Many conservative policymakers have made undoing the Green New Deal a priority. This is impossible without undoing the IRA “green” subsidies, which are the heart of the Green New Deal.

The spotlight will be on Republicans and more specifically on whether they can come through for the American people by getting rid of these IRA subsidies. If the subsidies are not repealed in reconciliation, this will be a devastating result. It will be characterized as a major failure and an ominous sign for the 119th Congress, as well as a failure to advance President Donald Trump’s Unleashing American Energy agenda. Those characterizations would be fair. . . .

The IRA is filled with numerous subsidies that were designed to shift our country away from reliable electricity generation (coal and natural gas) to unreliable electricity sources (e.g. wind and solar). This comes at a time of concern about the reliability of the nation’s electricity grid, in large part because of misguided corporate welfare policies that undermine reliable baseload generation.

There are also IRA subsidies that work in conjunction with other policies, such as the Environmental Protection Agency’s de facto electric vehicle mandate, to kill off gas-powered vehicles—undermining the freedom of Americans to choose their cars.

These examples capture just some of the problems with the IRA “green” subsidies.

The letter is worth reading in its entirety, and I encourage you to do so.

Sources: The Heartland Institute; Competitive Enterprise Institute

This article first appeared in The Heartland Institute’s Climate Change Weekly and is reprinted here by permission.