On Inflation Reduction Act Reform, Anything Short of Full Repeal Is Failure

Full Republican control of Washington creates an opportunity to repeal many of the previous administration's most costly laws and regulations. The misleadingly named Inflation Reduction Act (IRA) should be at the top of the list, not only because it is a disastrous environmental policy but also because it will be a necessary offset for a fiscally responsible extension of the expiring 2017 tax cuts. The energy and climate provisions of the IRA are already burning through taxpayer dollars at rates much higher than initially projected. These subsidies will likely cost over $1 trillion by 2032 and as much as $4 trillion by 2050, and some of the most lucrative tax credits have no expiration date. If Republicans are serious about ending federal intervention in energy markets, repealing the entire IRA energy subsidy framework--including for existing projects--is the only way forward. Full, retroactive repeal will make it harder for future federal subsidy schemes to take root. On the other hand, partial repeal will leave the IRA framework in place for a future Congress to pick up where the Biden administration left off.