Mandates, Meddling, and Mismanagement: The IRA’s Threat to Energy and Medicine
Commerce, Consumer, and Monetary Affairs
2025-05-20
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Source: Congress.gov
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The joint hearing of the Subcommittee on Economic Growth, Energy Policy and Regulatory Affairs and the Subcommittee on Healthcare and Financial Services will come to order. Welcome everyone to this hearing and thank you for your patience. It turns out when you're in the room with the president, you're not allowed to leave and security won't let you. So I wanna recognize myself for the purpose of an opening statement, but first I'm gonna say without objection, the chair may declare a recess at any time. Today, we are here to provide critical oversight of the policies and subsidies instituted through the Inflation Reduction Act, or the IRA. Signed into law under the Biden administration in 2022, this misleadingly named legislation passed with zero Republican votes. Three years later, the projected costs continue to balloon. with rounding errors in the billions, all while creating a runway, runaway subsidies and unnecessary distortions within energy and the healthcare markets. In January of this year, the Director of the Congressional Budget Office estimated that the IRA's energy subsidies would increase U.S. budget deficits by $825 billion over the next 10 years. That is more than three times the initial 10 year estimate, which was roughly about 270 billion that was determined by CBO when the bill was passed. How did the CBO and the JCT get these numbers so wrong? Other estimates show an even grimmer picture of the IRA's long-term economic impacts on the federal budget. Recent analysis by the Cato Institute shows that energy subsidies included in the IRA may cost between $936 billion and $1.9 trillion over the next 10 years, and between $2 trillion and $4.7 trillion by 2050. These are chilling estimates that extend far beyond what was previously projected.
And I would like to enter this report into the record entitled The Budgetary Costs of the Inflation Reduction Act's Energy Subsidies from the Cato Institute into the hearing record so that others may review these findings. Without objection, so ordered. These subsidies didn't just happen to create distortions in the energy markets, they distorted markets by design. The IRA funnels money to so-called clean energy organizations that would not be able to compete on their own without these subsidies. The Biden administration was blatantly picking winners and losers in the economy. The federal government slammed a fist on the economic scale to stifle free market competition that allows for the most reliable cost-effective sources to compete on an open playing field, all in the name of unproven hyperbolic and extreme climate alarmism. The kicker, these IRA subsidies coming from the party that purports to be against the oligarchy and fighting the billionaires created tax loopholes that carved out $11,000 on average for the top 1% through tax credits, while failing to demonstrate tax savings of more than 100 for the bottom line quintile of the American taxpayers. The IRA paid out the rich, all under the guise of climate change. There are also implications for the future of our tax code and prescription drug costs. The IRA has already led to a more convoluted web of tax subsidies, creating additional burdens for compliance. For healthcare under the IRA, the Biden administration's pill penalty will ultimately increase drug costs and federal expenditures on Medicare. We have an opportunity to take a hard look at these provisions to carefully evaluate whether these tax credits and programs are achieving their intended results and whether taxpayer dollars would be better spent elsewhere. Doing so has the potential to save taxpayers over $1 trillion, ease inflation, stimulate economic growth by allowing for free market competition, and make energy affordable again.
Thank you so much, Chairman Burleson, and thank you so much to the witnesses for being here this morning. The Inflation Reduction Act, or IRA, was a historic investment in battling the climate crisis and creating good-paying American jobs. And it was designed to achieve these goals by investing in our communities and in our families. The IRA provided a score of tax credits that lowered energy costs for working families by allowing them to make their homes more energy efficient and invest in clean energy. Shifting to clean energy and reducing emissions means reduced air pollution for all of us for all of our communities, which protects us from illnesses and early death. IRA tax credits include $14,000 in direct consumer rebates for families to buy heat pumps and other energy-efficient home appliances, providing families with savings of at least $350 per year. These tax credits also include a 30% tax credit for solar panels that will allow 7.5 million more families to install solar panels on their roofs by saving at least $300 per year. In my district, in Florida, affordable access to solar panels, thanks to the IRA, has helped thousands of my constituents lower their energy bills and reduce their reliance on fossil fuels. This has actually helped many folks during hurricane season. The IRA has not just been good for families and individuals' pocketbooks, it has also created economic growth in communities across the nation. Since the passage of the IRA, we've seen a domestic manufacturing renaissance and boom, with 340 major clean energy projects announced in 41 states and Puerto Rico, including many of my Republican colleagues' districts. More than $522 billion is planned for investments in these clean energy projects. In fact, the top 10 congressional districts with the highest investments in clean energy technologies during the first 10 months of the IRA
Eight of them were Republican districts. This includes $1.9 billion in Representative Andy Biggs' district in Arizona. As of last summer, the IRA had created more than 300,000 good-paying clean energy jobs, many of which do not require four-year degrees.
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