Statement on Importance of Federal Oversight of Inflation Reduction Act’s Labor, Equity, and Environmental Goals

February 16, 2023

The Inflation Reduction Act (IRA) invests nearly $400 billion in clean energy and climate solutions over the next decade. The IRA includes $25 million for federal agencies to oversee implementation and track labor, equity, and environmental standards and performance.

A letter, signed by over 175 organizations, including BlueGreen Alliance, Climate Justice Alliance, Grassroots Global Justice Alliance, Green New Deal Network and the Sierra Club, urges federal agencies to use this funding to conduct the rigorous oversight needed to ensure these federal investments “reverse — rather than reinforce — existing racial, economic, and social inequities and environmental harms.” CEPR agrees. In our view, rigorous oversight of the IRA’s implementation needs to be a top priority for the Biden administration.

When major public investments like these are not properly supervised, inequity, waste and corruption is an inevitable result, and the diverse working class loses out. The Paycheck Protection Program provides a prominent recent example of a program that lacked adequate oversight. As a result, a quarter of its funds may have gone to forgivable loans that did not meet the program’s rules, and many eligible self-employed people and small employers in underserved communities did not receive the loans they needed. The federal government must do a better job with its oversight of the IRA.

“The federal funds directed to climate and clean energy by the IRA will create millions of new jobs over the next decade. To ensure equitable access to these jobs and promote full employment for all, the Act includes important workforce development and apprenticeship provisions. GAO, OMB and other federal agencies need to conduct rigorous oversight to ensure these provisions are fully implemented,” said Algernon Austin, CEPR’s Director of Race and Economic Justice.

“To fully realize the intent of the IRA’s equity and labor provisions, the federal government must conduct rigorous oversight of its implementation, and develop, based on public input, cross-cutting labor, equity, and environmental standards for OMB to track. The Act’s implementation should be done in a way that upholds the right of workers to form or join a labor organization; to bargain collectively over terms and conditions of employment; and to engage in other concerted activities for mutual aid or protection,” said Hayley Brown, a labor expert at CEPR.

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