Reimagined Article

The Case for Retaining the Inflation Reduction Act

Introduction

In February 2023, Rep. Andrew Ogles (R-Tenn.) and 20 of his Republican colleagues introduced a straightforward piece of legislation. The bill declared, “Public Law 117–169 (commonly referred to as the inflation reduction act of 2022) is repealed.”

Background

Six months earlier, in August 2022, President Joe Biden and the Democratic Congress had passed the Inflation Reduction Act (IRA). The bill faced criticism for being pushed through on a party-line vote and for containing provisions that some believed would increase inflation.

Policy Considerations

For both policy and political reasons, the conservative approach to the IRA should be reconsidered. The act adopted a market-based approach with tax credits that have historically enjoyed bipartisan support. Government support through tax credits is preferable to direct appropriations, as it promotes equity formation and capital expenditures.

Market Stability

Conservatism advocates for predictable and durable policies. The IRA’s 10-year timeframe for the tax credits provides businesses with the stability needed to make long-term investments. Changing the rules mid-game would be detrimental to economic growth and unfair to stakeholders.

Energy Security

The IRA aims to bolster America’s energy security by promoting domestic workforce growth, on-shoring manufacturing, and reducing foreign dependencies. These are policies that conservatives have historically supported and should continue to promote.

Political Impact

Although supported by Democrats, the economic benefits of the IRA disproportionately favor areas represented by Republicans. Studies show that a majority of project locations and new jobs are in red or purple states.

Implementation Challenges

While there are issues with the IRA’s implementation, conservatives should focus on refining the energy provisions rather than repealing them entirely. Changes should ensure technological neutrality, prevent political bias, and promote industry growth and innovation.

Conservative Approach

Conservatives should continue advocating for efficient regulation, streamlined permitting processes, and a focus on jump-starting the industry without creating long-term subsidy dependencies. Refining and improving the energy provisions is the conservative way forward.

Conclusion

The Inflation Reduction Act may have had a contentious start, but for the sake of policy stability and economic growth, conservatives should look to refine and improve its energy provisions rather than seeking full repeal.

Read More of this Story at thehill.com – 2024-03-18 20:00:00

Why Conservatives Should Support the Inflation Reduction Act