Since becoming law three years ago, the Inflation Reduction Act of 2022 (IRA) has artificially boosted unreliable renewable projects and spent billions of taxpayer dollars on wasteful climate-related initiatives. Congress should act now to roll back these subsidies and tax breaks for select energy businesses that threaten to cost taxpayers trillions while undermining the cause of American energy security. How much do you know about these green subsidies? Let’s play “Two Truths and a Lie” and find out.
A. Uncapped green energy tax credits are costing taxpayers trillions of dollars.
B. The IRA has only created a fraction of the jobs it promised to generate.
C. The IRA’s green subsidies have successfully reduced greenhouse gas emissions by 40%.
A. TRUTH! The IRA was initially estimated to cost around $370 billion between 2023 and 2032. However, the cost projections have been revised between $1.2 trillion and $2 trillion in the next ten years and nearly $5 trillion by 2050. The IRA will continue to cost taxpayers more money as uncapped green energy tax credits won’t be phased out until at least 2050, since the goal of reducing the carbon emissions rate by 40%, compared to that of 2005, is nearly impossible.
B. TRUTH! The IRA boldly promised that it would create 9 million clean energy-related jobs by 2032. As of May 2025, three years after it was passed, the IRA has only created 400,000 jobs. Many of those jobs are only temporary construction jobs, with each job costing taxpayers roughly $2 million to $7 million. The Political Economy Research Institute claimed that six million of these jobs would be funded by IRA grants, loans, and tax credits, and Department of Energy loans and grants would fund the remaining three million jobs.
C. LIE! The IRA was promoted as a key measure to cut greenhouse gas emissions by 40% by 2030 compared to 2005 levels. However, it is highly unlikely that the IRA will achieve these goals. A 2023 Congressional Research Service report estimated the IRA’s provisions would reduce emissions by 30% to 43% by 2030, while the U.S. was already on track for a 24% to 35% reduction without subsidies, suggesting minimal impact for a $1 trillion price tag. The Cato Institute echoed this, noting that IRA subsidies would only reduce emissions by 0.7% annually through 2050, compared to 0.4% without them. Electric vehicle subsidies may even increase particulate pollution due to heavier electric vehicle (EV) components. Moreover, the Heritage Foundation found that Green New Deal policies, like the IRA, would only lower global temperatures by 0.2°C by 2040 while costing $7.7 trillion in GDP and 1.2 million jobs, highlighting the limited environmental and economic benefits of these subsidies.
Bottom Line:
The IRA makes many bold promises, but none of them have come to fruition or seem as if they will make it there. The Congressional Budget Office even warned that the IRA would have a negligible effect on inflation. In fact, American consumers spent 20% more on energy expenditures due to inflation caused by spending on the Russia-Ukraine War.
Continued dependence on green subsidies for established clean energy sectors disrupts energy markets, hinders reliable infrastructure development, and burdens taxpayers with trillions in debt. Congress can seize the chance to eliminate these costly IRA subsidies, saving at least $1 trillion to fund priorities like tax cuts for working Americans.
To learn more, read the Policy Focus: IRA Green Subsidies.