IRA Will Make the United States Poorer and China Richer
WASHINGTON, D.C. — Today, U.S. Senate Committee on Energy and Natural Resources Ranking Member John Barrasso (R-WY) and U.S. House Committee on Energy and Commerce Chair Cathy McMorris Rodgers (R-WA) released a report exposing the multiple levels of failure in the creation, implementation, and execution of the so-called “Inflation Reduction” Act.
“The ‘Inflation Reduction’ Act (IRA) is one of the most economically disastrous pieces of legislation ever enacted. Just about every Democrat claim made in defense of this costly and irresponsible bill, including its title, is false,” the report states.
In the year since this legislation was enacted, Americans have seen these claims unravel and reveal IRA for what it truly is – a law that plays political favorites while increasing the debt, harming American companies, wasting hard-earned taxpayer dollars, and sacrificing our national security.
Below are excerpts from the report:
IRA will further weaken the economy and enlarge the national debt
“Democrats sold the bill as reducing the deficit. A key to that promise was the cost of the energy and climate provisions which they pegged at $391 billion. Since its enactment, estimates now place the real cost of these IRA provisions at about $1.2 trillion (Figure ES1). That is $750 billion more spending than previously claimed. Such massive spending will aggravate already stressed supply chains and prolong inflation—just the opposite of what the Democrats said.
“It also will add to the mountain of debt President Biden has amassed. The $750 billion in additional spending Democrats didn’t count is three times greater than the $240 billion in deficit reduction the bill was supposed to produce. That will leave taxpayers on the hook for hundreds of billions of dollars in new borrowing. With the debt already at a frightening $33 trillion, we simply cannot afford IRA.”
Subsidies on Top of Subsidies
“Renewable subsidies were supposed to be a temporary measure until these energy types could compete. The first wind subsidy, for example, started in 1992. They have been around now for more than 30 years and show no signs of going away anytime soon. They are the perfect example of Ronald Reagan’s maxim that, “Government programs, once launched, never disappear.” IRA extends and increases already extravagant renewable subsidies well into the future. Tax credits under the statute, for example, could cover as much as 70 percent of the cost of a new solar project.”
Politically-Connected Make Out Well While Taxpayers Get the Shaft
“It has been revealed by the Washington Free Beacon that a private trade association founded and headed by Jigar Shah, Director of DOE’s Loan Programs Office, has become a “gatekeeper” for companies seeking loans and loan guarantees. According to the article, “The Cleantech Leaders Roundtable has seen a surge in its influence and revenue since its former president, Shah, was tapped to lead the powerful $400 billion Department of Energy Loan Programs Office (LPO) in 2021.”The group has not been shy about touting its connections:
“Hundreds of Billions $$$$$$,” wrote Cleantech Leaders’ executive director in a LinkedIn post about Loan Programs Office funding last year. “We love Jigar Shah for that and also for co-founding the Cleantech Leaders Roundtable.”
“The potential political conflicts of interest this reporting has uncovered could not be clearer.”
Handouts for China?
“Chinese domination of both the solar supply chain and the solar panel market are bad enough. But even worse, key parts of Chinese solar panels are manufactured in Xinjiang province, where China uses the Muslim Uyghur minority as forced labor. Though the Chinese government denies this, it has not permitted independent inspectors access to the manufacturing facilities. These claims raise a big red flag on an entire Chinese green industry.
“Where China cannot innovate advanced energy technologies, it is not above stealing them. As the February 2023 Annual Threat Assessment from the Office of the Director of National Intelligence warned:
“China will remain the top threat to U.S. technological competitiveness, as Beijing targets key sectors and proprietary commercial and military technology from U.S. and allied companies and institutions . . . Beijing uses a variety of tools, from public investment to espionage to try to advance its technological capabilities, protect domestic firms from foreign competition, and facilitate these firms’ global expansion. Beijing’s willingness to use espionage, subsidies, and trade policy . . . advances Beijing’s attempts to assume leadership of the world’s technological advancement and standards.”
“More and more we are seeing reports detailing how researchers connected to China’s military and intelligence services have penetrated our university system and research institutions, exploiting an atmosphere of open inquiry and free exchange of ideas to pilfer intellectual property. We need to wake up to the threat, not finance it. The IRA should not be used to fund America’s Chinese competitors. Unfortunately, it appears few real safeguards are in place to prevent this misuse of taxpayer dollars.”
The Electric Vehicle Mirage
“The EV subsidies in IRA will distort the American automobile market and deny many Americans the freedom to buy the vehicle that best suits their needs. The average electric car costs $62,000. That’s $16,000 more than a gasoline-powered vehicle. The steep price tag is a major reason dealers recently were sitting on a 92 day inventory of electric cars—almost twice that of conventional cars.
“Despite enormous taxpayer subsidies, dealers are having a hard time moving these costly cars off their lots. Even at these high prices, many manufacturers are losing money on every sale. It is estimated that Ford lost an average of more than $70,000 on each EV it sold in the second quarter of 2023 while Rivian is reportedly losing $33,000 on each vehicle it sells.”
Click here to read the report in full.