Inflation Reduction Act: Another Biden Deception

Democrats' green energy boondoggle, disguised as the Inflation Reduction Act, unleashes $485 billion in new federal spending and tax credits in the middle of the highest inflation in 40 years. The legislation includes $468 billion in new taxes weeks after the nation officially plummeted into a recession. 

By enlisting the media's support, Democrats have successfully packaged the legislation as a climate game changer that will reduce the deficit.  The Democrats' political propaganda has been drummed into the national conscience.  Only one problem. It's mostly untrue.  

Here is a list of the most egregious examples of sleight of hand in the massive, 755-page bill that passed without a single Republican vote:

• Despite the administration claims, an independent review of the bill reveals the act will have "no meaningful effect on inflation in the near term." By reducing long-term economic growth, the bill may actually worsen inflation, according to another study.
• The act contains $80 billion in funding for the Internal Revenue Service (IRS) to double the size of the agency by recruiting and hiring of 87,000 new employees. Don't call these recruits "agents" because it offends the administration.
• Reforms in prescription drug pricing, billed as saving Americans billions of dollars, will have little or no impact for at least seven years. And it excludes those individuals with company provided insurance.  
• President Biden insisted the new minimum 15% tax on corporations was aimed at big firms that pay no federal tax. In actuality, the new law raises taxes on all corporations currently paying less than the 15% rate. 
• Hailed as revolutionary, the green energy section contains $386 billion in spending for so-called energy security and climate change.  Yet, $4.275 billion will go for rebate programs for consumers, including those on Indian Reservations, who install water pump heaters, electric stoves and ovens, insulation and ventilation.  

                                             Inflation Reduction

The Wharton School of Business at the University of Pennsylvania estimates the Biden act will reduce inflation by around 0.1 percent by the middle of the first decade under this bill.  In addition, the new law would slightly "reduce GDP" in the first decade while  increasing economic growth by 2050. 

Deficit reduction is just a gleam in the eyes of the Congressional Budget Office (CBO), especially after President Biden issued an executive fiat forgiving student debt for 43 million borrowers. Preliminary estimates are the costs will be about half-a-trillion dollars.  So much for deficit reduction. 

                                                IRS Spending

Originally, the president proclaimed the new IRS agents would go after greedy billionaires.  But when Forbes reported there were 735 billionaires, 87,000 new non-agents (insert laughter here) appeared to be overkill.  The new party line is the IRS recruits will zero in on taxpayers making over $400,000.

Anyone who believes the administration's "fact-sheet" that asserts the non-agents will collect $124 billion in new taxes knows nothing of IRS history.  In 2010, Congress showered millions on the IRS in hopes of raising $9 billion in new revenue.  The results were deplorable.

The bloated agency, which already has 78,661 employees, spent $574 million to collect $14 million in new taxes.  From fiscal 2015 to 2017, the IRS audited 73% of returns from taxpayers earning $200,00 and lower after stating its mission was to target high-earners. 

 

                                                Prescription Drugs

The American Medical Association (AMA) reviewed the bill's provisions for lowering prescription drug prices and praised the reforms. However, the top 10 drugs, which account for 40% of Medicare Part B drug spending, likely won't be eligible for negotiated prices until 2029.  That's not a typographical error.

                                                Corporate Taxes

The president initially claimed 55 corporations paid no federal taxes in 2021.  His statement had to be walked back.  Actually 26 companies in the S&P 500 and the Fortune 500 paid no taxes.  The 15% minimum would apply to hundreds of firms that paid federal taxes but at a lower rate.

Corporate taxes are ultimately paid by the firm's  customers. Companies pass along the cost in the form of higher prices.  

                                                        Green Energy 

Two of the beneficiaries of the $386 billion in climate spending will be electric car buyers and the solar industry.  Under the act, the business investment tax credit will be lifted to 30% for solar construction projects before the end of 2024.  Purchasers of pricy electric vehicles will receive generous rebates. 

The act changes the current law to give electric vehicle  purchasers an instant $7,500 credit on new cars and $4,000 on used EV's.  Under the old provisions, buyers applied for a tax rebate post-purchase. With the average cost of a new EV reaching  $66,000, few middle-income Americans will reap the benefits.

For an administration which thinks it needs a ministry of disinformation, the Inflation Reduction Act qualifies as misinformation. What little trust Americans had in government, has been ripped to shreds by this disguised legislation. Truth in legislation is an oxymoron in Washnington. 

Green Energy Runs Into Coal, Hard Facts

Washington is expected to spend $1 trillion to underwrite green energy production this year in an effort to reach the administration's goal of net zero emissions by 2050.  Even if the U.S. achieves its target, it might not reduce global emissions because coal plants are springing up like mushrooms everywhere.  

Although China is a signatory to the Paris Climate Agreement, its actions do not match its state-sanctioned support for the green agenda. China built more than three times as much coal plant capacity as the rest of the world in 2020.  This translates into more than one coal plant every week.  

A report by San Francisco-based think tank Global Energy Monitor and the Centre of Research on Energy and Clean Air documents China's thirst for coal power.  Research shows China grew its coal power by 29.8 Gigawatts (GW) while the rest of the world decreased capacity by 17.2 GW.

In 2021, China added more coal plants since 2016 as its power demands increased.  The world's most populous country has 1,100 coal fired power plants producing electricity.  That is nearly four times as many as the second-largest coal energy producer, India, which has 285 plants.  

Climate activists claim that because of the Paris agreement China has reduced its dependence on coal.  The country produces less of its total energy from coal than it did 10 years ago, dropping from 85% to 56%. But coal remains the chief energy source to power China. 

China not only is the biggest consumer of coal power, but the largest producer too.   China produced 4.7% more coal in 2021 than the previous year.  Coal companies churned out more than 3.7 billion tons.  The country's coal industry plans to significantly hike production this year, reports Chinese media.

Despite its efforts to reduce its dependence on coal, the Chinese are involved in building and funding more than 70% of all coal plants abroad.  Since 2013, China's Belt and Road Initiative has committed to $50 billion in financing for 26.8 Gigawatts of coal facilities in 152 countries. 

Chineses Banks are bankrolling 60 new coal plants across Eurasia, South America and Africa.  When those projects are completed, the coal facilities would emit about as much carbon dioxide as all of Spain. Ignore Chinese propaganda; the country is exporting pollution to other nations.

Carbon Tracker, a financial think tank, calculated that China, India, Indonesia, Japan and Vietnam plan to build 600 coal power plants. India with 285 coal plants generates more than 75% of its power needs through thermal coal. India has 39 thermal coal plants under construction with plans for more. 

No surprise to learn China is the world's biggest polluter.  The Communist nation contributed 21.4% of the world's greenhouse gasses, according to data from the World Resources Institute.  The U.S. ranks second with 12.5% of the global emissions.  India and the European Union are tied at 7% each.   

Weaning countries off coal is proving difficult because the demand for energy is soaring.  Electricity demand is projected to triple globally by 2050, a McKinsey report estimates.   Estimates are the electricity demand in the U.S. will jump 28.8% for the same period. 

With rising demand, America's push for green energy has paid dividends.  Wind turbines and solar accounted for about 20% of the electricity generated in 2021.  Including hydroelectric dams and nuclear, the total rises to nearly 40%.  But coal still produces 21% of electric power. 

Germany is a cautionary tale for adopting a green policy cold turkey without regard for the long-term impact on the economy.  Since 2000, the country shutdown coal plants, scuttled nuclear facilities and spent billions of dollars on renewable power, mostly wind and solar. 

However, those renewables are subject to intermittent output, meaning the country needs a dependable, alternative power source. For Germany, that has been Russian natural gas.  When Russia began cutting back supplies this year, Germany had no other option but to restart its coal fired plants.

Germany had planned to eliminate coal by 2030, but that target seems unachievable in light of the reactivation of coal plants.  The lesson of the German experience is that the shift to renewable energy cannot happen overnight and without fossil fuel backup power, electricity rationing is a certainty. 

With winter months away, officials in the country's second largest city Hamburg are warning warm water will only be available certain times of day. Across Germany, streets light are dimmed, water is rationed and swimming pools have been closed.  

Most Americans are on board with replacing fossil fuel electricity with green energy.  On the other hand, Americans want affordable, reliable energy.  This summer major electric grids across the nation are under stress sometimes because wind and solar are offline due to weather conditions.

America's appetite for wind and solar energy is growing, which is driving down the cost of each megawatt-hour of energy, making it more competitive with fossil fuels. But for the foreseeable future, fossil fuels will be required to meet the nation's rising energy demand.

China Dupes U.S. Over Pollution Pledges

Even as the ink dried on the Paris climate accord in 2015, the world's biggest polluter was plotting to ramp up construction of hundreds of new coal-fired plants to meet the swelling energy demand of its 1.44 billion people. Despite its climate pledges to slice emissions, China's pollution has worsened.

Only six years ago, China joined 195 other countries, including the United Sates, in signing a binding treaty to tackle the issue of climate change.  Under the agreement, each country pledged to significantly reduce harmful emissions.  Naive American politicians trusted the Communists' promises.    

Little has changed since that Paris agreement in 2015.  China 's coal burning plants continue to belch carbon dioxide, thus retaining the title of world's largest emitter. The regime is responsible for 30% of all global emissions, according to ClimateTrade.  China releases twice as much CO-2 as the U.S.

President Biden has an opportunity to confront China on its lack of progress at the upcoming Conference of the Parties--nations which ratified the United Nations Framework Convention on Climate Change in 1994.  Expect China to make empty commitments it has no intention of fulfilling.

The Washington Post, virtually a publicity arm of the Democrat Party, ran a story ahead of the Glasgow, Scotland, confab, tempering expectations.  With China's President Xi Jinping absent, the Post conjectures there will be no substantial guarantees from China on a plan to reduce emissions.  

For once, the newspaper'a assumption is correct.  China always acts in its self interests. To suggest the Communists will do an about face because of a ballyhooed conference, is incredulous.  If President Biden takes a victory lap after the meeting, he has been duped by China just like previous leaders.

Judge China on its actions not its rhetoric.  The independent research firm Rhodium Group released an analysis documenting that China's emissions have more than tripled over the past three decades. China's global emissions reached 52 giga tons of CO-2 in 2019, an 11.4% increase over the last ten years.

Yale Environment 360 analyzed China's climate ambitions and wrote that "air pollution returned in Beijing with a vengeance, hitting the highest levels this year since January 2019." Steel, cement and heavy manufacturing plants, running on coal power, boosted emissions by 4% by mid-2020. 

In 2019, 58% of China's electricity was generated by coal, according to Yale's study.  By comparison, the United States produces 23% of its electricity from coal.  Last year alone, China built 184 coal-fired plants which will release more carbon dioxide gasses.  

The San Francisco-based think tank Global Monitor and the independent Centre for Research on Energy and Clean Air estimated China commissioned more than three times as much new coal power capacity as all the other countries in the world combined, despite repeated assertions to cut emissions. 

America has dramatically reduced its dependence on coal by shuttering 392 coal burning facilities since 2002, a decrease of  38%. The country now operates 241 coal-fired plants and more are being off-lined nearly every year. Meanwhile, America creates 20% of its electricity from renewables.

China defenders--and there are many in Congress--point to the Communist Party's mandate that 40% of the vehicles sold in China must be electric by 2030.  However, few economists believe the goal can be achieved.  Still China apologists offer this mandate as proof the country is serious about climate change.

China's foremost champions are large U.S. corporations, including many with production, assembly or manufacturing facilitates operating in the Communist regime.  The list includes firms such as Apple, Tesla, Boeing, Caterpillar, General Motors, Ford and Honeywell.  

Scores of other firms, such as Nike, Starbucks, McDonald's and Pepsi, depend on the lucrative market for corporate revenue and profit growth. Wynn Resorts' revenues from casinos in Macau alone account for 75.2% of its income. China represents the most lucrative market for U.S. companies.

The reality is these firms cannot afford to offend China by demanding climate accountability.

The silence of American businesses is nothing short of hypocritical considering many of these same corporations are zealots for the progressive New Green Deal initiative in their own country. These corporate behemoths prefer to lecture Americans about saving the planet.  Chinese, not so much.

In fact, these firms are guilty of fueling demand for more energy output in China by investing in the expansion of their operations in the Communist nation. Every new retail store, manufacturing or assembly plant, taxes China's already strained national grid, hiking incentives for more coal power.

Given American businesses' dependence on China for growth and profits, does any reader believe Mr. Biden will hold China's feet to the fire over it climate promises?  Never happen. The U.N. goal of reaching "net zero" greenhouse gas emissions by 2050 is constructed on quicksand commitments.  

That's why this latest climate summit will be a carbon copy of those held over the last two decades.  Much fanfare, little results. Expect Mr. Biden to double down on reigning in U.S. emissions.  But global CO-2 emissions will continue to spiral because China has no intention of honoring its pledges.    

Green Energy: Take A Fresh Look At Nuclear

Plans to expand nuclear power usually trigger fears of Chernobyl, Fukushima and Three Mile Island. Nightmarish accidents occurred at those three nuclear plants, designed in the 1960's and built in the 1970's, fueling a public climate of jitters about the safety of this energy source.

However, misgivings about nuclear's safety are at odds with the facts. At the end of 2019, there were 98 operating nuclear reactors at 58 power plants in 29 states in the U.S. with no incidents since the Three Mile Island radiation leak of 1979.  That was more than two decades ago. That plant is 38-years-old.

Primarily due to the escalating costs of regulation, construction and maintenance, the total number of operational nuclear reactors has shrunk from its pinnacle of 108 in 2000.  The price tag for today's traditional nuclear power plant, depending on capacity, runs anywhere from $6 billion to $9 billion.  

Although the country has fewer nuclear reactors, those power plants still produce 20% of all electricity. Natural gas accounts for 38% of power generation; coal, 23%; hydroelectric, 7%, and wind and solar output equals 12%.  Those sources combined churned out 4.1 billion mega-watt hours of power.  

Those figures are from the U.S. Energy Information Administration (EIA), which published the data this year. According to an EIA report, the U.S. has the most nuclear generation capacity of any nation, but France's nuclear plants account for a larger share of the country's total electricity output, 71.5%.   

As the world searches for ways to reduce carbon emissions, there is increasing interest in small modular nuclear reactors (SMR).  These advanced reactors are envisioned as power sources for electricity, desalination and other industrial uses.  U.S., Canada and China are pursuing the technology.

In 2020, the Energy Department awarded $210 million to ten projects to develop technologies for SMR's as part of an Advanced Reactor Demonstration Program.  Scores of SMR initiatives are underway at private firms, including General Electric, a pioneer in nuclear power.  

Although still in the development stage, these small, modular reactors will prospectively be designed to develop 300 mega watts of power, compared with more than 1,000 megawatts for larger plants operating in the country.  

What makes these smaller reactors different? The footprint is reduced.  In fact, one SMR could fit into an area the size of a microbrewery.  The light water-cooled reactors are modular, which means the plants could be built faster and cheaper, saving billions of dollars. 

These innovative reactors could be shipped by rail to power sites, reducing the time to erect a new plant and making nuclear more cost effective.  A few nascent SMR designs are contemplating incorporating the use of a coolant other than light water, such as gas, liquid metal or even molten salt.   

Proponents are not calling for abandoning green energy sources such as wind and solar, but suggest these innovative reactors could replace larger, outdated nuclear or coal facilities. They insist the mini-reactors are inherently safer than the older designs, offering added protection from nuclear meltdowns. 

The ingenious nuclear plant would work the same as today power facilities, heating water to produce steam.  The steam is used to spin large turbines that generate the electricity.  The process requires fission to split atoms inside the reactor.  The reactor core contains uranium fuel. 

In September, the Nuclear Regulatory Commission issued a safety evaluation report on an SMR, a critical step before the final design can be approved.  The firm,  NuScale, based in Portland, is developing the first commercial SMR for utilities in Utah, slated for launch by the end of the decade.

One drawback for nuclear energy has always been the issue of nuclear waste, which remains highly radioactive for longer than a human lifespan. The new downsized reactors will produce waste, but there will be less of it because of its diminished power capacity. 

Concerns about nuclear waste are legitimate, but often exaggerated by the media.  All the waste from 60 years of America's nuclear reactors would take up less space than one average-size Walmart store. Compare that to the toxic waste from a single, large coal plant. It dwarfs nuclear waste.

Nuclear emits no carbon.  It can supplement renewables.  When clouds blot out the sun or the winds are calm, those two sources of energy are dormant.  Without a reliable backup source, homes and businesses would be plunged into darkness.  Today coal plants often are the backup.

As a practical matter, the more solar and wind populate a country's energy grid, the more backup power is needed.  Take Denmark for example.  On windy days, the country's offshore wind farms supply 100% of its power.  Over a full year, wind output accounts for only 50% of electricity generation.

On windless days, Denmark purchases backup power from other countries at premium prices. 

Germany has plowed $400 billion into its renewable program, yet carbon emissions have remained stubbornly high.  The reason? Backup power is often supplied by coal or gas burning plants. Closer to home, California has made billions in investments in renewables, but emissions remain essentially flat. 

A recent report by the National Renewable Energy Lab, an advocate for green energy, issued a green energy projection it cautiously labels as "theoretically" possible:

"Renewable electricity generation from technologies that are commercially available today, in combination with a more flexible electric system, is more than adequate to supply 80% of total U.S. electricity generation in  2050."  Even under this optimistic scenario, there's a 20% power shortage.

This by no means diminishes renewables.  Wind and solar are excellent sources of clean, carbon-free power.  However, addressing the power-gap should be the top concern of any country or environmentalist interested in achieving a carbon neutral goal. Ignoring it is foolhardy. 

There is no technology on the horizon that offers the scale of nuclear power as an immediate backup. Hydrogen and batteries are often discussed as green alternatives, but any development of a working plant remains decades away, if ever.

Solar panels and wind farms may offer the best hope of reducing carbon emissions, but neither can overcome intermittency when nature interrupts their source for generating power.  Future electric grids will need clean backup power.  That's why it's urgent to take a fresh look at nuclear.