Inflation Reduction Act to cost US $1.2 trillion, Goldman Sachs says

President Biden’s clean-energy law will cost roughly $1.2 trillion, a figure three times more than what supporters initially claimed. 

The Inflation Reduction Act was passed last year in an effort to address climate change, security and energy. Lawmakers who voted for the legislation said it would spur trillions in private-sector investment. 

BIDEN SIGNS $739 BILLION INFLATION REDUCTION ACT INTO LAW, SLAMS GOP FOR VOTING AGAINST THE TAX, CLIMATE DEAL

President Joe Biden speaks about the Inflation Reduction Act of 2022 during a ceremony on the South Lawn of the White House. The legislation will cost $1.2 trillion, according to Goldman Sachs Group Inc.  (AP Photo/Andrew Harnik / AP Newsroom)

An analysis by Goldman Sachs Group Inc. found the $1.2 trillion in government outlays will unleash another $3 trillion in investment by businesses and individuals to build and expand climate-friendly ventures, Bloomberg reported. 

The Congressional Budget Office forecast that the law’s energy and climate provisions would cost $391 billion between 2022 and 2031, The Wall Street Journal reported. 

However, the IRA’s tax credits will cost hundreds of billions more. 

The act was signed into law amid historically high levels of inflation. The Consumer Price Index (CPI), a measure of inflation, increased by 8.5% annually in July 2022, according to the Bureau of Labor Statistics (BLS).

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The law will allocate $369 billion toward climate and energy policies, extend the Affordable Care Act to reduce the cost of health insurance and incorporate a 15% minimum corporate tax for companies that earn more than $1 billion per year.