The Biden administration was a disaster. But it’s way worse than anyone previously thought.
That’s why President Trump was floored by how Joe Biden is destroying America from the grave.
Biden’s Inflation Reduction Act Found To Be Way Worse Than Initially Expected
When former President Joe Biden signed the Inflation Reduction Act (IRA) into law in 2022, it marked a significant legislative victory for his administration. Passed strictly along party lines, with no Republican support in Congress, the law was initially framed as a $369 billion investment, according to a Senate one-pager citing Congressional Budget Office (CBO) estimates. The IRA aimed to tackle inflation, boost green energy, and reshape the economy. However, a recent study from the Cato Institute paints a starkly different picture, estimating that the law’s true cost could balloon to $4.67 trillion by 2050—more than 12 times the original figure. This revelation has sparked renewed debate about the law’s merits, its unintended consequences, and whether it warrants a full repeal.
The Cato Institute’s analysis, co-authored by research associate Joshua Loucks and Travis Fisher, director of energy and environmental policy studies, dives into the financial implications of the IRA’s sprawling subsidies. The study suggests that over the next decade, the law could cost taxpayers between $936 billion and $1.97 trillion. Looking further ahead to 2050, that range climbs to $2.04 trillion to $4.67 trillion. These figures stand in sharp contrast to the CBO’s initial $369 billion estimate and even outpace a May 2023 Goldman Sachs projection of $1.2 trillion.
“We decided to go on our own fact-finding endeavor here, and that’s what resulted in this paper,” Loucks said, explaining that the wide range of cost estimates since the IRA’s passage prompted their investigation. The authors turned to models from the U.S. Energy Information Administration to assess the law’s long-term trajectory, focusing on its two primary subsidy mechanisms: production tax credits (PTCs) and investment tax credits (ITCs). PTCs reward energy producers with credits per unit of carbon-free energy generated, while ITCs offer upfront tax breaks for investments in green energy projects like nuclear, wind, solar, geothermal, energy storage, green manufacturing, and hydrogen.
What makes these subsidies particularly expensive, the study argues, is their open-ended nature. Some lack caps entirely, while others phase out only when specific greenhouse gas emission reductions are achieved—targets the authors deem unlikely to be met within the next 25 years. This absence of firm expiration dates transforms the IRA into a potentially limitless taxpayer commitment.
The IRA’s structure allows subsidies to pile up in ways that amplify costs. A notable example is the 45X manufacturing tax credit, designed to bolster domestic supply chains for the green energy transition. This credit includes a provision for mining critical minerals—like lithium for batteries or materials for solar panels and wind turbines—that carries no end date. Even if emission goals were met, these production credits would persist as long as the mines operate.
“The real nightmare scenario for taxpayers is that these credits are stackable,” Loucks explained. He and Fisher illustrate this with a hypothetical lithium mining company. The company earns PTCs for its mineral output. That lithium then powers a battery storage facility, which qualifies for an ITC. If the battery supports a solar farm, the farm secures its own PTCs or ITCs. Should that solar farm produce green hydrogen, yet another PTC kicks in. “There’s just endless ways to stack this, and that’s going to result in taxpayers paying massive amounts of the burden,” Loucks said.
This stacking effect, the authors contend, warps market incentives. “The options for entrepreneurs are unlimited, which is part of the problem in terms of the incentive structure that this law builds,” Fisher said. “I think it takes the entrepreneurial spirit, the entrepreneurial spirit of Americans, and essentially turns them towards chasing subsidies instead of satisfying consumer demand.” Instead of fostering innovation to meet real-world needs, the IRA encourages businesses to chase government handouts—a phenomenon critics call “subsidy farming.”
Perverse Incentives and Premature Upgrades
The IRA’s design also creates questionable incentives for specific industries. For instance, wind farms qualify for PTCs for the first 10 years of operation. But if a wind farm is refurbished—or “repowered”—the IRS treats it as a new project, restarting the 10-year clock. This rule, the Cato study argues, pushes companies to overhaul turbines well before their useful life ends, locking in more subsidies at taxpayer expense.
Mitch Rolling and Isaac Orr, founders of Always On Energy Research, explored this dynamic in Minnesota wind farms. In an article on their “Energy Badboys” Substack, they analyzed Department of Energy data and found that repowered turbines ranged from 9 to 16 years old, with a median age of 10 years. “In essence, the lucrative federal subsidies paid to wind turbine operators are creating a perverse incentive to prematurely refurbish or replace wind projects long before the end of their useful lifetimes,” the analysts wrote. Such practices inflate costs without delivering proportional environmental benefits.
Another critique leveled by Loucks and Fisher is that the IRA disproportionately favors large corporations over small businesses. Navigating the law’s complex tax credits often requires deciphering dense, 100-page regulatory guidelines that shift multiple times a year—a task manageable only for companies with robust legal teams. “This is 600 pages of dense legal regulatory code that no average or small business could ever understand, comply with or take advantage of,” Loucks said.
This complexity has given rise to firms that exist solely to exploit these subsidies. Loucks pointed to green hydrogen producers as an example: “Consumers don’t have a demand for their product,” he said, “and they wouldn’t exist without the tax credits. But they get enough money from the government to keep afloat, and basically they just profit off taxpayers.”
Economic and Environmental Fallout
The Cato study argues that the IRA’s flaws extend beyond its price tag. “The government should not have a hold on the economy in such a way that it can truly distort entire markets, and that’s what the Inflation Reduction Act is,” Loucks said in a video accompanying the report. He ties the law to broader economic woes, noting that inflation— a top voter concern in pre-election polls—helped propel President Donald Trump back into office. “The reason inflation has been so bad, plain and simple, is because of government spending,” Loucks said.
Moreover, the authors question the IRA’s environmental impact. “It just funnels money to special interest groups and does nothing to really address how we’re going to transform our economy in a way that is equitable and beneficial for all Americans,” Loucks said. With costs soaring and markets skewed toward subsidy-chasing, the law’s promise of a green revolution appears increasingly hollow.
Calls for Repeal or Reform
The Trump administration has launched reviews of Biden-era regulations, including the IRA, though undoing major legislation may require congressional action. Loucks and Fisher urge lawmakers to act decisively. They advocate for a full repeal of the IRA’s energy subsidies, arguing that the law’s fiscal and economic toll outweighs its benefits. Short of that, they propose capping the subsidies’ dollar value and tying them to firm expiration dates rather than emission targets.
“Delaying action only strengthens the political and economic interests tied to its subsidies, making reform even more difficult as the web of government handouts expands,” the authors warn in an article on Fisher’s Substack, “The Fishtank.” As the debate unfolds, the IRA’s legacy—once touted as a cornerstone of Biden’s agenda—now faces intense scrutiny, with its future hanging in the balance.
