Washington, D.C. — The Inflation Reduction Act (IRA) has been identified as the largest investment in clean energy in U.S. history, aimed at reducing household energy costs, addressing climate change impacts, and enhancing American manufacturing's competitiveness in the global clean energy market. These economic future investments appear as expenditures in the federal budget.
A new issue brief from the Center for American Progress presents an analysis indicating that the IRA will likely reduce the federal deficit by $176 billion over a decade and even more significantly in the long term.
Key findings from this analysis include:
Patrick Gaspard President and Chief Executive Officer at Center for American Progress
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- The IRA is projected to reduce the deficit by $176 billion between 2022 and 2031 (the initial budget window when the bill was enacted), and by $535 billion from 2025 through 2034 (the current budget window).
- Budgetary savings from the IRA are expected to commence in 2028.
- Combined with the Biden administration’s emissions rule, the IRA will save an average family over $350 per year on gas by 2032.
Bobby Kogan, senior director for Federal Budget Policy at CAP and co-author of the brief, stated: “The IRA created the largest investment in clean energy in U.S. history and will reduce the federal deficit in the medium and long term. These are investments in the future, and our economy and federal budget will continue to reap those benefits in the years to come.”
Brendan Duke, senior director for Economic Policy at CAP and co-author of the brief, added: “From historic investments in clean energy to decreasing health insurance and utility bills, to helping the IRS catch wealthy tax cheats, the IRA is an investment in America’s future. Despite its popular clean energy incentives, it will reduce federal deficits while strengthening our economy for decades to come.”
For further details or expert consultations, contact Sarah Nadeau at [email protected].
