2023-08-16 20:02:29
The American president is trying to convince people of the benefits of his flagship clean energy law, which ultimately has little to do with lower inflation.
Joe Biden would like Americans to remember: the president who has invested the most in green energy is him. The Democrat celebrated on Wednesday the first anniversary of one of its flagship laws, the Inflation Reduction Act (IRA). The text provides for hundreds of billions of dollars in tax credits to help consumers buy some electric cars and companies to produce renewable energy.
“When I think of the climate, I think of employment.”
The IRA is the most “aggressive” energy and climate plan in history, Joe Biden said Wednesday during a speech to much fanfare at the White House. “And when I think of climate, I think of jobs,” he added. The US president boasted of having created “more jobs in two years than any previous administration over an entire term”.
One of the frustrations of the Democratic administration is not being given credit for the relative health of the US economy. The president, candidate for his re-election in 2024, therefore seeks to prove that the IRA is an essential element of “Bidenomics”, this expression often used in a pejorative way and recovered lately on the left to praise the stimulus measures of the democrat. “Bidenomics… Guess what? It works!” exclaimed Joe Biden.
According to the White Housewhich cites the analysis of independent groups, the IRA has generated over the past year 110 billion industrial investments in green energy, including 70 billion in the sector of electric cars. Some 170,000 jobs have been createdand future investments are expected to result in 1.5 million additional jobs over 10 years.
On Tuesday, a report from Moody’s estimated that the IRA was likely a driver of GDP growth, productivity and innovation in the United States. “Over the past year, there have been signs that the law is helping to grow clean energy generation and other industry sectors like semiconductors, and that companies are taking the text into consideration as to invest, particularly in the automotive, energy services, oil and gas sectors.”
Deficit reduction will wait
Yet there is no shortage of criticism of the IRA. Abroad, where the law is seen as a form of protectionism that does not suit European allies. But also in the United States, because the IRA’s 10-year deficit reduction target of $300bn is at high risk of not being met. For this, the law provided for an increase in corporate tax to a minimum rate of 15%, more audits of the tax authorities on large fortunes and the direct negotiation of the prices of certain drugs between the government and pharmaceutical companies.
But during the negotiations on the debt ceiling in the spring, the Republicans obtained concessions on tax audits. The minimum tax of 15% on companies might ultimately be more complicated than expected to apply and yield less than hoped. As for the pharmaceutical companies forced to negotiate, they took the administration to court. Result: the anticipated revenues do not materialize, at least in the immediate future. The IRA therefore costs a lot of money but does not bring in as much as expected. Analysts from Goldman Sachs, Credit Suisse and the University of Pennsylvania predict annual budget deficits of around $700 billion to $1.1 trillion over the next ten years.
Sleight of hand
The American media point to another, more political problem: a year later, Joe Biden still needs to explain to the public what the IRA is. For a flagship measure, this is a bad sign. Only 27% of Americans say they are familiar with the content of this legislation, according to a survey by the Washington Post and the University of Maryland published Monday.
The president himself admitted that his law should not have been called the “Inflation Reduction Act”. This sleight of hand was intended to save the administration from being punished for the price hike in the 2022 midterm elections.”I wish I had given another name to the IRA because it has less to do with reducing inflation than with implementing alternatives (energy, Ed) that generate economic growth,” Joe Biden said last week.
Especially since this growth also concerns voters that the Democratic camp would like to rally. According to a media analysis Politicoout of the 200 investment projects announced up to July, more than 60% are located in Republican strongholds, especially in the Midwest or the Southwest. Key states for the 2024 presidential election.
The summary
- Joe Biden celebrated on Wednesday the first anniversary of one of its flagship laws, the Inflation Reduction Act (IRA).
- The President of the United States has touted the results of this legislationparticularly in terms of jobs.
- According to a survey, barely more than a quarter of Americans are aware of this flagship measure intended to increase economic growth by implementing energy alternatives.
1692243799
#year #criticism #Joe #Biden #praises #results #Inflation #Reduction #Act