In signing the Orwellian-named Inflation Reduction Act, President Biden declared, “We’re cutting [the] deficit to fight inflation by having the wealthy and big corporations finally begin to pay part of their fair share.”
We already knew the law wasn’t going to do anything about inflation, and now the Wall Street Journal reports that it’s looking like it will actually add to deficits, too, due to higher-than-projected costs for the green subsidies:
To environmental advocates and the Biden administration, more people using the tax credits could mean faster-than-expected results: Reductions in carbon emissions, higher wages for workers on clean-energy projects and supply chains that are less reliant on China.
But the tax-credit boom could undermine another administration talking point about the law: The claim that it will reduce long-run budget deficits. The Goldman and Brookings analyses contend that the tax credits could cost American taxpayers three times as much as the $271 billion forecast when Congress passed the law. The [White House Office of Management and Budget] figure points in the same direction, though its estimates about revenue from tougher tax enforcement—which are larger than congressional projections—turn the law from deficit-increasing to deficit-reducing.