NEW YORK, NY — Today, President Biden signed into law the Inflation Reduction Act (IRA)—historic legislation that will reorient economic policy by making the tax code fairer, lowering drug prices, and investing in clean energy. It will empower government to enact structural interventions that will stem inflation and start the process of creating a greener future.
And while there is much to celebrate about this bill, we at the Roosevelt Institute maintain this is just the beginning of what must be done to ensure an economy that works for everyone.
To better understand the specifics and shortcomings of the bill—how it will reduce inflation and strengthen our economy, and how the compromises extracted will fall heaviest on Black and brown communities, you can read our Understanding the Inflation Reduction Act blog series, along with ”Why the Inflation Reduction Act Is a Big Deal” by Joseph Stiglitz, Nobel Laureate and Chief Economist at the Roosevelt Institute.
Roosevelt Institute experts also had the following to say about today’s news:
Felicia Wong, President and CEO: “This bill reorients many elements of our economic policymaking toward public investment for public good, such as including new economic sectors like clean energy, all while beginning to rein in corporate extraction through tax and regulatory policies. But whether this is the end or the beginning depends on political momentum—whether these policies end up benefiting the American people in ways that are tangible, clear, and inspiring to voters. Making that happen will require more work, and more fights, in the near future.”
Ali Bustamante, Deputy Director, Worker Power and Economic Security: “The crises of the past two years have revealed that the American economy is in need of repair, and the Biden administration has responded with comprehensive plans that invest in the American people and its infrastructure—collectively, the largest domestic investments in modern history. These investments have brought millions of Americans out of poverty and fostered the hottest labor market in a generation. The IRA’s inclusion of important labor provisions that prioritize workers, including those on prevailing wages, should be also celebrated.
Emily DiVito, Senior Program Manager, Corporate Power: “The IRA’s tax provisions—especially the minimum corporate tax on book income and an injection of funding for the IRS—represent a vital and long-overdue investment in a fairer and more equitable tax system. The IRA does more than raise revenues from those who can most afford it; it fundamentally helps rebalance our tax code by reprioritizing the interests of American families and making the uber-wealthy and the largest, most profitable corporations pay their fair share.”
Rhiana Gunn-Wright, Director, Climate Policy: “The IRA is a historic but deeply flawed step forward for the development and deployment of climate solutions and clean energy. It will provide billions in public financing not only for renewable energy, electric vehicles, and clean energy home upgrades but also for a Green Bank, debt relief for rural electric cooperatives, and a range of investments in environmental justice. But the bill also makes too many counterproductive investments in a slate of technologies that cause direct and indirect harm to frontline communities and help the industries most responsible for the climate crisis maintain their power in—and, in many ways, over—our economy. Furthermore, in keeping with much of American history, the progress that the IRA makes possible comes at the expense of the Black, brown, and Indigenous communities who will have to live with—and fight against—the fossil fuel projects that the bill enables.”
Mike Konczal, Director, Macroeconomic Analysis: “Fighting inflation requires an all-of-government approach. The IRA takes an important step in this direction, with its major elements all designed to bring down costs. Between combating tax cheats to controlling the runaway price of prescription drugs costs to investing in clean energy, these elements will not only build a more equitable economy; they will also make an important dent in inflation.”
Todd N. Tucker, Director, Industrial Policy and Trade: “The Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act —represent the biggest investment in industrial policy for the civilian economy in US history. In just a matter of months, the US went from being a laggard among major nations for investing in shaping its peacetime economy to one of the world leaders. After decades of a neoliberal approach to climate and economic transformation that centered market mechanisms (and went nowhere in the US Senate), the US has finally turned the page toward something more effective and just. Going forward, the US should invest across a broad range of industries—those where the US has a competitive advantage and that are highly unionized, and those with national security implications and unionizable potential. Workers of color and those left behind by globalization should be prioritized to benefit the most from Bidenomics’s more intentional approach to economic policymaking.”