The dishonestly named Inflation Reduction Act of 2022 officially solidifies the Democrat majority’s anti-prosperity agenda to the detriment of Americans facing increased financial strain. No Republicans are signing on to this tax and spend boondoggle cementing its partisan status. It will worsen inflation and exacerbate our recessionary economy, which has led political analysts to label the bill a “sick joke.” Raising taxes during a recession is a bad idea that even progressives used to admit. 

Advocates of the bill are attempting to justify the bill by touting its climate and energy provisions. Digging into the details reveals the promises to cut energy costs, improve security, and lower emissions are not true. Raising taxes on energy producers while subsidizing the lifestyle of liberal elites will do very little to address high cost energy or improve the environment. 

The Manchin-Schumer Plan Will Increase Energy Costs

The bill increases taxes (disguised as “fees”, “rates”, and “charges”) that will be passed onto consumers. It also discourages investment in U.S. oil and gas which will constrain supply and keep gas prices at financially painful levels

One of the most damaging provisions includes a methane tax politically disguised as a “charge”. Setting aside built-in incentives from the natural gas industry to reduce emissions as well as numerous private sector solutions, this tax adds costs to the development and use of natural gas that will be passed on to consumers. One study estimates that a methane fee adds an average of 17% to electricity bills. Additionally, the tax is duplicative to existing regulations at EPA of which the Biden administration plans to make more stringent.

Progressives working to make resource development less attractive proposed to increase royalty rates. The increase ranges from 33 to 50% on the cost of offshore production, which will deter overall development. The bill also proposes a similar list of increased costs and complications via federal mandate for onshore production.  

The Machin-Schumer Plan Will Undermine Energy Security 

The continued push by progressives to gut U.S. oil and gas further exposes American consumers to inherent instability in the global oil market. Curbing U.S. energy production also reduces our ability to export cleaner energy to European allies that are instituting energy rationing on citizens as Putin threatens to completely shut off supply. The billions of dollars in subsidies for electric vehicles and wind and solar will worsen grid reliability (or unreliability). Federal preference for wind and solar are why blackouts and brownouts are more common occurrences across the U.S. This billion dollar boost to inferior technologies will only make it worse. 

The bill includes one positive attempt on the energy security front. Starting in 2024, the bill would require electric vehicle manufacturers source 40% of the minerals for its batteries from countries of which the U.S. has an official trade agreement or are recycled in North America. It also prohibits using minerals from “foreign entities of concern”  in order to qualify for federal tax credits. It’s an open secret that minerals used in EV batteries are regularly sourced from Chinese owned mines in the Democrat Republic of Congo where child labor is common practice. Unless the Biden administration opens up access to mineral rich areas within the U.S. —which to date they have actively closed off—the bill will do little to reduce China’s dominance in the market and our increasing reliance. 

The Manchin Schumer Plan Will Do Little to Lower Emissions or Change the Climate

The bill creates a boon to the business of climate change, run by top Democrat donors that are salivating at the prospect of a federally funded boost to their infrastructure of alarmism and green investments. But if you care about actual results, the bill comes up short. 

It purports to cut U.S. emissions by 40% below 2005 levels by 2030. According to analysis by the Rhodium Group, the number of emissions that would be reduced by the bill beyond what would already occur ranges from zero to 500 million tonnes. Marketed as a “historic investment” this bill is more about “robbing the bank” for political payoff, not improving the climate. If you care about temperature impact, one study reveals these reductions will be negligible on long term temperatures, at best. 

America is already on track for a lower emission future and will continue to lead the world on that front. The “Inflation Reduction Act” will have very little impact on this outcome, but will enrich progressive-aligned corporations, increase inflation, raise taxes and crush jobs. Touting this as anything other than a “tax and spend” disaster is a total scam.