Repealing the Inflation Reduction Act could wipe $160 billion off US GDP

A full repeal of the Inflation Reduction Act this year could cause significant damage to the US economy, triggering nearly 790,000 job losses in 2030 and reducing GDP by more than $160 billion, modeling published Thursday suggested.

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.

Analysts do not expect a full repeal: Even Mike Johnson, the Republican Speaker of the House of Representatives, has characterized his strategy of pulling back on the IRA as “between a scalpel and a sledgehammer.” But it could be drastically limited by reducing staffing to key posts at the Treasury and Energy departments responsible for setting tax-credit guidelines and doling out financial support.