A behind-the-scenes look at how the Inflation Reduction Act came together

I have spent over a decade working on many components of what ended up in the Inflation Reduction Act.

So when President Biden was elected, having campaigned on climate as a top priority, plus with Democratic majorities in the House and the Senate, I think a lot of us who had been working on this issue knew that there could be a real opportunity here to get something big done.

The actual road to passing the IRA was fraught, but I have always been an optimist, so I remained confident that we would get this to the finish line. A memorable moment in the process for me was receiving a call from one of Senator Manchin’s staffers during a Sunday dinner, urging trust in his commitment to the issue. He’d internalized the climate change issue, had seen its destructive effects firsthand on a trip to Alaska with Senator Lisa Murkowski (R-AK) and had spent a significant amount of time working on it. And in the end, we passed the largest climate legislation in history, which is a huge step forward.

There were some letdowns when the bill passed — notably, transmission didn’t receive a tax credit. This was particularly difficult since transmission is a complex issue and a tax incentive would have made many projects much more economically viable. There are efforts to address it through permitting and siting, and we’re trying to compensate in other ways, but since transmission enables so many other technologies, it was the hardest pill to swallow.

Much of my work at Building Back Together, especially in the heart of the Inflation Reduction Act’s passage, involved what I’d call shoe-leather organizing. It was about talking to folks who are running exceptional programs in the climate movement.

The challenge was that they didn’t always see eye to eye with the administration. Particularly during the darker days, post–Joe Manchin’s rejection of Build Back Better, many questioned the administration’s dedication to getting this done — even though that was always unwavering. It was just me trying to persuade my old colleagues to believe and trust me that we were still going to get this done.

One of the most persuasive aspects of the IRA turned out to be its funding source — taxing big corporations and the wealthy. While tax fairness isn’t a topic we, as climate advocates, regularly discuss, it was a significant factor that garnered support for the bill.

Still, the IRA is filled with incentives — not mandates — and I don’t believe we can reach our goals without mandates. The Biden administration has now shifted its focus to complementing IRA investments with robust pollution standards for the power sector and tailpipe emissions. This is a critical part of the puzzle. Would it have been better if these standards were in the bill? That’s the policy aspect we still need to grapple with.

There’s also a huge opportunity to reshape politics in America. These investments will benefit rural areas, purple states and red states. But we must seize this opportunity — implementation and political realignment won’t happen automatically. 

When President Biden came into office with a promise to do something on climate and a strong interest in reengaging with manufacturing and technology development, it seemed likely that the pieces were going to come together to create something big.

We started looking at our clients and served as a bridge between them and policymakers. In the end, we worked heavily on the advanced manufacturing tax credit, which was a really novel approach.

Senator Manchin had an especially tough line to walk. I think he was interested in manufacturing and what it could do to revitalize communities throughout Appalachia. But there was not a lot of precedent for the proposed approach, so there was a sense of uncertainty. How could we know where this could lead, whether we could outpace China, whether we needed more of a stick rather than carrots? Senator Manchin also had concerns about costs.

So we had to demonstrate the benefits — particularly with him. A few manufacturers really stepped up, like Form Energy, who asserted they could build in West Virginia using existing industrial infrastructure. These companies were able to highlight the economic benefits beyond carbon reduction, such as increased grid reliability and the creation of good-paying jobs, as well as the improvement of national infrastructure, which I think were compelling for Senator Manchin.

The Inflation Reduction Act is incredible, transformational and historic. And it is, of course, incomplete and imperfect, because all policy is — there were things like the Clean Power Plan that did not make it into the bill. That’s one way the Inflation Reduction Act could have gone even further.

But just the fact that it exists will ensure even more progress in the years ahead, which will build on it. It has essentially created an ​“electric bank account” for every American household. The effectiveness of the policy will rely heavily on how many people are aware of these available incentives and subsequently take advantage of them.

We’re really at the beginning of this work, and this is a significant focus of our current investments. We launched our calculator the day the president signed the Inflation Reduction Act into law. We haven’t spent any money marketing this tool, yet 500,000 households have used it to understand what’s available to them. People are naturally curious about what’s in it, what they’re eligible for and what they can receive. But 500,000 households is a small fraction of the 121 million households in the U.S.

During the Inflation Reduction Act process, one of the most challenging early conversations we had with our colleagues in the House was about what ended up being the manufacturing tax credits.

There was a lot of education we needed to invest in, and it took a lot of political power to have this be included in the package — it wasn’t in the earliest versions of the Build Back Better plans in the House. To be candid, it also took a lot to convince the administration and the White House of the importance of manufacturing incentives, as it was not in their initial communications documents and plans. People at the Department of Energy, and crucially, Secretary Jennifer Granholm, really got it from the get-go, and her team was very helpful in providing technical details and briefings about the importance of onshoring supply chains and really creating a value chain here in the U.S.

Since then, we’ve already seen investments across various parts of the supply chain. That’s exactly what we hoped to accomplish. On solar, for example, we’ve seen Qcells expanding their capacity, as well as Meyer Burger and REC Silicon. I don’t think we are 100 percent there yet, but it is very nice to see some of the progress and groundwork that has been laid out as we embark on what will be a journey over the next decade.

Across the country, in battleground states and across political ideologies, our polling found that Americans were concerned about climate change.

They wanted lawmakers to act and — crucially — they supported ambitious actions like a 100% clean electricity standard. Alongside our colleagues at Third Way Climate and Energy, we built a map showing support for a federal clean electricity standard, spanning across states and congressional districts in the nation.

And now, so many of the projects spurred by the Inflation Reduction Act are happening in states represented by members who didn’t vote for the bill. This could play a significant role in the 2024 campaigns. I foresee the climate action and IRA drawing parallels with the victories of the Affordable Care Act. Like with Obamacare, which faced calls for repeal but eventually gained public support, clean energy companies establishing roots in polarized regions could lead to a shift in attitudes toward climate action. Once these companies become integrated into the community, infrastructure and tax base, it will be a lot harder to get rid of the provisions in this law.

Even though not everything that was on the table made it into the bill, in the end, we still accomplished something monumental with the Inflation Reduction Act — unleashing hundreds of billions of dollars for clean energy and efficiency, and attempting to chip away at fossil fuel profits.

The fight that I spearheaded was on direct pay for the tax credits for residential rooftop solar and home energy-efficiency improvements, which ultimately did not make it into the bill. Direct pay is the mechanism by which a tax credit can be transformed into something more like a grant, which is important because if you are low-income, you are not able to get the same benefits from traditional tax credits.

We managed to get the provision in the Senate version of the bill, and that was after organizing an inside coalition of staff who were able to bring their bosses on board for a letter asking for direct pay to Leader Schumer and then Senator Wyden on the Finance Committee.

The IRA process really underscored just how much elections truly determine what’s achievable. The future is shaped by the efforts to mobilize and empower voters to deliver electoral victories, so the power really lies with the people, and if you can out-organize the oligarchy, you can save the world. I hope this takeaway resonates with our collective movements that are defending the wins of the Inflation Reduction Act and creating conditions for more ambitious, inclusive legislation, which still needs to continue. We are, after all, still in a life-or-death situation for our planet and democracy.