The Real Cost of the Inflation Reduction Act Subsidies: $1.2 Trillion

Goldman Sachs says the uncapped tax credits will cost three times what Democrats claimed

WSJ editorial. Excerpts:

"a Goldman Sachs report projects its myriad green subsidies will cost $1.2 trillion—more than three times what the law’s supporters claimed. 

The Congressional Budget Office forecast that the IRA’s energy and climate provisions would cost $391 billion between 2022 and 2031"

"companies are rushing to cash in on tax credits that aren’t capped. The Biden Administration is also loosely interpreting conditions for the credits."

"The [CBO] forecast misses include electric vehicles (difference: $379 billion), green energy manufacturing ($156 billion), renewable electricity production ($82 billion), energy efficiency ($42 billion), hydrogen ($36 billion), biofuels ($34 billion) and carbon capture ($31 billion)."

"projection that more vehicles will meet the law’s “self-sufficiency” mineral and battery material conditions for the partial $3,750 consumer credit and full $7,500 credit."

"an analysis last month by Mercatus Center fellow Christine McDaniel projected that the tax credit for battery production could cost up to $196.5 billion."