Republicans Have Found Another Way to Kick-Start a Recession
Won’t somebody please think of the billionaires
Repealing the Inflation Reduction Act—something President Trump is currently trying very hard to do—could result in a $160 billion hit to the gross domestic product, according to Semafor.
A complete IRA repeal would devastate the country’s economy. It could lead to 790,000 lost job losses by 2030, while household energy bills would increase by up to $370 per year, on average, by 2035.
This is ominous news for an economy already on the brink of recession. That recession is being driven by Trump’s ongoing trade war with America’s closest allies—25 percent levies are currently being placed on many imports from Mexico and Canada—which Fed Chair Jerome Powell just admitted was making inflation worse. Cuts to the IRA would have a massive negative impact on American manufacturing, delivering a devastating blow to a sector that those tariffs are theoretically intended to boost. Slashing the IRA would also particularly harm red states, which have received a whopping 77 percent of clean energy manufacturing and deployment investment since the third quarter of 2022.
The New Republic's Malcolm Ferguson, Ferguson warns that economic damage from tariffs and economic damage from a repeal of the Inflation Reduction Act could be a painful combination.
"That recession is being driven by Trump's ongoing trade war with America's closest allies — 25 percent levies are currently being placed on many imports from Mexico and Canada — which Fed Chair Jerome Powell just admitted was making inflation worse," Ferguson notes. "Cuts to the IRA would have a massive negative impact on American manufacturing, delivering a devastating blow to a sector that those tariffs are theoretically intended to boost. Slashing the IRA would also particularly harm red states, which have received a whopping 77 percent of clean energy manufacturing and deployment investment since the third quarter of 2022."
Ferguson continues, "A full repeal of the IRA is not expected, of course, but Speaker Mike Johnson did describe his vision for the cuts as 'somewhere between a scalpel and a sledgehammer.' Even if the bill is not repealed — or curtailed — by Congress, agency cuts made by Elon Musk’s Department of Government Efficiency have likely already affected its implementation."
According to Semafor's Mizy Clifton, red states and swing states could suffer the most damage from a repeal of the Inflation Reduction Act.
Clifton, in an article also published on March 20, reports, "With the exception of California, Republican-controlled states — Texas, Georgia, Florida, and Pennsylvania — stand out as the biggest losers, according to projections by think tank Energy Innovation: Annual household energy bills in Texas, for example, could increase $370 per year on average in 2035 as reduced investment in renewables drives up the share of electricity coming from fossil fuels and utilities pass on their higher costs to consumers, according to Energy Innovation projections."
