The Inflation Reduction Act Turns Two

How the IRA Is Shaping a Better Economy

Two years ago, President Biden signed one of the most ambitious pieces of legislation in decades: the Inflation Reduction Act (IRA). On the landmark law’s second birthday, Roosevelt’s Alí R. Bustamante reflects on how the IRA has begun reorienting the economy, improving public health, and catalyzing renewable energy production—and how policymakers can maximize its full potential.

The IRA’s efforts to supercharge the renewable energy industry have led to $493 billion of investments in clean technology since July 2022. The act also placed a $35 monthly cap on insulin and allowed the federal government to directly negotiate prices with drug companies; this week, the White House announced it successfully negotiated to lower the prices of 10 of Medicare’s most expensive medications. 

In addition to driving green manufacturing and lowering health-care costs, the IRA has made major investments in people and places so often left behind. “One of the lesser-discussed but equally important aspects of the IRA,” Bustamante writes, “is its role in addressing economic inequality.” The law helps provide workforce development and training to marginalized workers so that they can fill the thousands of jobs created by the new investments. “This job growth has been pivotal in revitalizing local economies, especially in areas that were previously dependent on fossil fuels,” Bustamante writes. Ensuring that the gains from the IRA go toward uplifting those who need it most will require firms to engage with community stakeholders, as Bustamante and Joe Peck wrote in a recent Roosevelt report. 

And to get to net zero? We’ll need greater investment, persistent innovation, and a government-led fossil fuel wind-down.

The IRA kick-started this process, and the progress so far is worth celebrating. “The two-year anniversary of the Inflation Reduction Act marks a significant milestone in the journey toward a more sustainable, equitable, and prosperous future,” Bustamante writes, “one in which government steps up and helps shape the economy we need.”

Read the blog post: “Two Years Later: How the IRA Is Boosting Green Energy, Public Health, and Economic Equity”

What We’re Talking About

There is no reason to keep interest rates as high as 5.5%.

Inflation is quite largely under control, and it’s time for the Fed to cut the rates.

Case in point: https://t.co/b4w8G5HDJQ

— Roosevelt Institute (@rooseveltinst) August 14, 2024

What We’re Reading

The Unemployment Insurance Program Is Unprepared for a Recession, Experts Say – feat. Roosevelt Fellow Indivar Dutta-Gupta – CNBC

What Should We Do about Google? – New York Times 

The IRA’s Labor Provisions Look like They’re Working – Heatmap 

We’re Entering an AI Price-Fixing Dystopia – The Atlantic