After two years, it's clear that Biden's Inflation Reduction Act did exactly the opposite

how well is he Inflation reduction law working? The fact that, on her second birthday, Vice President Kamala Harris plans to call on the federal government to ban grocery price hikes should give you your answer: It's not working.

Although his administration still takes credit for the laughably wrong name IRAand the number of grocery stores ensures strong price competition, Harris' proposal shows that Americans are concerned about high prices.

Inflation has fell to 2.9% annually from more than 8% in 2022 when the IRA was signed, but food prices are 21% higher than three years ago. Rather than reducing inflation, the IRA probably increased it, giving companies tax credits to produce more expensive energy and transport.

Along with inflation, tax credits have soared. When the IRA was signed into law, the US Treasury Department estimated that the tax credits would cost $270 billion over 10 years. But now Treasury reports that the 10-year cost of IRA tax credits is more than a trillion dollars, according to Goldman Sachs estimates.

These tax credits encourage the development of wind and solar energy, which raise the costs of producing electricity and make food more expensive. Intermittent power is more expensive than continuous power, because the wind doesn't blow all the time and the sun doesn't always shine.

Wind farms need natural gas power plants to go with them, and solar panels need backup batteries. Natural gas-fired power plants generate cheaper electricity running continuously than cycling on and off as the wind stops blowing. But natural gas and coal plants are being pushed out by distorting subsidies to renewables.

California regulations mandating wind and solar power caused residential electricity prices to rise nearly 170%, from about 12 cents to 33 cents per kilowatt hour between 2004 and 2024. The average of US is about 16 cents.

Renewables require an extensive transmission infrastructure to bring energy to population centers. This will cost more $220 billion, according to the Department of Energyand companies pass the costs on to households through higher tariffs.

Likewise, electric vehicles (EVs) that get the $7,500 IRA tax credits are more expensive than gasoline-powered ones. The Ford F150 XL pickup costs $36,965, and the Ford Lightning pickup, the electric equivalent, costs $62,995.

Under the IRA, electric vehicles had to account for a certain share of domestic production to get the credit, but there's a giant gap for leased vehicles. This is what the Treasury has ruled commercial vehicles do not have to meet national requirements to get the creditand rented vehicles count as commercial. So people can rent electric vehicles and get the credit.

The IRA tax credits were intended to benefit Americans and develop a domestic industry. But Chinese companies are partnering with American companies to try and get tax credits, as a result, the IRA is making China stronger and America weaker.

Ford and Contemporary Amperex Technology Co. Ltd. (CATL) have a joint venture in Michigan. Beijing will influence both the technology and factory operations of the $2.5 billion plant, which is receiving 2.2 billion dollars in tax incentives.

China dominates battery technology more than 70 percent of the world's electric vehicle battery production capacity, and CATL is the largest producer, benefiting from close relations with the Chinese Communist Party (CCP).

One of the reasons for the IRA was to reduce emissions, but by many calculations tax-favored renewables increase global emissions. Solar panels, wind turbines and batteries made in China use electricity generated from coal-fired power plants. Emissions are generated when components are shipped to Europe and the United States, as well as disposing of these panels and turbines when their useful life is over.

As can be seen in Vice President Harris' announcement, inflation is not fixed. The IRA probably made it worse by driving up energy and transport costs and putting domestic energy at a disadvantage. This is not a happy birthday.

Diana Furchtgott-Roth is Director of the Center for Energy, Climate and Environment and Herbert and Joyce Morgan Fellow in Energy and Environmental Policy at The Heritage Foundation. The Heritage Foundation is listed for identification purposes only. The views expressed in this article are the author's own and do not reflect any institutional position of The Heritage Foundation, National Review Institute, or their trustees.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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