Our Take, with Doug Sheridan
It's basically hairy-handed lobbying and favoritism. Why do business schools even exist anymore? After all, everything is now politics.
Our Take, with Doug Sheridan
The WSJ writes, the Congressional Budget Office recently bumped up its projection of the Inflation Reduction Act's climate tax credits through fiscal year 2033 by $428B, putting an official stamp on what public and private analysts had been saying for the past year.
The CBO’s increase is driven by a flood of clean-energy factory announcements, proposed environmental regulations that would push more buyers to EVs and rules allowing leased EVs to qualify for generous tax breaks with fewer restrictions.
The CBO said the IRA’s budgetary effects are still highly uncertain. The tax credits’ popularity and increasing cost could fuel concerns about rising gov't budget deficits and make the energy incentives a big target for Republicans if they take full control of Congress and the White House next year.
“These dollars will soon be flowing quickly out the door to projects and factories across the US, with a really strong concentration in red states,” said Eric Scheriff, who leads energy and sustainability advising at Capstone, a Washington-based firm that tracks regulatory and legislative issues. “That’s going to do a lot in terms of members supporting keeping these credits around.
Critics say much of the money for wind and solar-power projects is subsidizing investment that would have happened anyway. “It’s not like there was no interest in wind, solar, offshore wind. There was, and we had some existing credits. They just put them on steroids,” said Douglas Holtz-Eakin, a former CBO director who now runs the conservative American Action Forum.
The biggest change in the forecast came from the US Environmental Protection Agency (EPA)' proposed rule to tighten vehicle-emissions standards. That would force automakers to increase EV production, driving more sales that will qualify for tax credits worth up to $7,500. Its potential impact is actually even larger because the CBO only includes half the effects of a proposed rule. If the EPA completes the rule as expected, the CBO would include the other half in its next update.
To Sum It Up: Many analysts think it'll be difficult for lawmakers to repeal subsidies that are popular among a swath of businesses including fossil-fuel, manufacturing and transportation companies. The subsidies are designed to increase energy security and have been boosting job creation, particularly in Republican districts.
Out Take 1: Joe Manchin strikes again—and so do other politicians just like him who've steadily turned America into a country in which politicians and business execs can no longer fathom a world without gov't picking winners and losers.
Our Take 2: "Profits" these days are really politicians adding trillions to the govt's national debt, and then running the proceeds through the income statements of favored industries, districts and causes. It's basically hairy-handed lobbying and favoritism. Why do business schools even exist anymore? After all, everything is now politics.