Two Years In, Biden’s Inflation Reduction Act Has Made a Dent

When President Joe Biden signed the Inflation Reduction Act on August 16, 2022, the bill’s namesake demon had been hovering around nine percent. Earlier this week, the latest report showed inflation was below three percent for the first time since March 2021. Score one for the oddly named landmark piece of legislation.

Obviously plenty of other work has been done to lower the economy’s temperature, but on the IRA’s anniversary the White House is taking something of a victory lap for its various successes, from IRS and drug pricing reforms to its signature status as the biggest climate change investment in U.S. history.

“In the two years since President Biden signed it into law, this landmark bill has already delivered for American families,” Vice President Kamala Harris said in a statement; she cast the tie-breaking vote in the Senate two years ago, and is now very much running on some of the bill’s achievements. That includes significant healthcare changes, like Medicare’s new ability to negotiate drug prices with pharmaceutical companies; a report this week revealed the first 10 such drugs, including diabetes medications, heart failure drugs, autoimmune treatments, and others, and the administration says this will save Medicare billions of dollars starting in 2026. The law also capped insulin prices at $35, which has already saved many patients substantial amounts.

But the most significant chunk of the IRA is certainly its climate provisions. In 2023 alone, 3.4 million households took advantage of clean energy and home efficiency credits, to the tune of $8 billion, according to a report from the Treasury Department. Hundreds of thousands have claimed electric vehicle credits, and the administration says companies have invested more than $250 billion in manufacturing and energy facilities with help from the law.

Tom Carper (D—Del.), chairman of the Senate Environment and Public Works Committee, also took some time to celebrate on the bill’s birthday. “This historic law is lowering energy costs for families, reducing planet-warming emissions, and cleaning up the water we drink and the air we breathe, all while creating good-paying jobs,” he said in a statement. “And that’s not just a few jobs. That’s a whole lot of jobs.”

A report earlier this summer from Climate Power pegged the number at more than 312,000 clean energy jobs created.

Of course, from a climate perspective, it’s still not enough. The early analyses of the IRA found it could help the U.S. cut greenhouse gas emissions by as much as 42 percent below 2005 levels by 2030 — solid, but still a ways off from the Biden administration’s 50 to 52 percent target. A follow-up published in Science in 2023 extended that out to a 48 percent cut by 2035. Climate Action Tracker, which evaluates national climate plans and progress, called the IRA a “major step forward,” but still lists the U.S. in its “insufficient” category (no major countries are in line with the 1.5-degree target of the Paris Agreement, for what it’s worth).

“Without additional, drastic emission reductions measures, the US will still be far from meeting its domestic climate target, let alone get its emissions onto a 1.5°C trajectory,” the group wrote.

Meanwhile, there is ample reason to worry that the carrots-only approach of the IRA leaves something to be desired. The oil and gas industry continues to thrive and expand, and the administration’s unwillingness to really try and hurt Big Oil may mean that the IRA’s steps forward are matched by some dirty steps back. But the boom in clean energy manufacturing and installation is real, and growing, and impressive; and the legislation’s boosters think it still has more to offer.