How the Inflation Reduction Act Died in the U.S. Congress

President Biden’s Inflation Reduction Act (IRA) was the most ambitious U.S. climate policy so far. Key provisions expanded tax credits for renewable energy, electric vehicle purchases, and domestic battery manufacturing. The IRA was supposed to channel hundreds of billions of dollars into clean technology adoption and domestic manufacturing.

The idea behind the IRA was to make it politically bullet-proof. Many of the investments subsidized under the IRA would go to competitive electoral districts or states represented by Republicans in the House of Representatives and the Senate. These elected politicians would support the IRA, protecting the legislation against repeals under a Republican administration.

But President Trump’s budget bill in 2025 repealed most of the IRA climate policies. According to Jesse Jenkins at Princeton University, the IRA would have reduced U.S. greenhouse gas emissions by over 40% from 2005 by 2035. With President Trump’s One Big Beautiful Bill (OBBB), emissions would decrease by about 25%.

Why did the IRA fail to survive? In what follows, I propose three reasons for the early death of the IRA.

1. The Theory Behind the IRA

The IRA was supposed to build its own constituency. The IRA allocated substantial funding to support manufacturing investments in battery storage, solar panels, electric vehicles, and other technologies. These investments would benefit conservative states and districts. As a result, the IRA would be protected by a coalition of virtually all Democrats and a critical mass of Republicans at the federal level.

Given that any new budget legislation would require both the House and the Senate, the IRA just had to keep a handful of Republicans on its side. Even if the Republicans gained a majority in both the House and the Senate, and the President was a Republican, many of the IRA provisions would be safe.

How is that working out for the Democrats? Not well. President Trump’s OBBB of 2025 decimated the IRA. Production and investment tax credits for solar and wind power are phased out for projects that are not in service by end of 2027. Electric vehicle and residential solar credits disappear. Restrictions on foreign technologies are tightened.

2. The Time Lag Problem

The first problem with the IRA was the time lag.

Turning legislation into running factories takes years. When President Trump came to power in January 2025, investment in clean technology manufacturing was still in the early stages.

Many good plans were made, with USD ...