H.R.2008 - Infant Formula Made in America Act of 2025 (119th Congress)
Summary
H.R.2008, the "Infant Formula Made in America Act of 2025," aims to incentivize domestic production of infant formula through tax credits. It introduces two new tax credits: an investment credit for manufacturing projects and a production credit for formula produced in the U.S. The bill seeks to address supply chain vulnerabilities and ensure a stable supply of infant formula for American families.
The investment credit provides eligible taxpayers with a credit equal to 30% of qualified investments in infant formula manufacturing projects, subject to certain limitations and certification requirements. The production credit offers a credit of $2 per pound of eligible infant formula manufactured and sold for use in the United States, also with limitations and eligibility criteria.
These credits are designed to encourage companies, particularly smaller businesses, to invest in and expand domestic infant formula production, ultimately reducing reliance on foreign sources and bolstering the national supply chain.
Expected Effects
The bill, if enacted, is likely to increase domestic production of infant formula by making it more financially attractive for companies to invest in manufacturing facilities and production. This could lead to greater availability of infant formula in the U.S. market and potentially lower prices for consumers.
It will also likely create new jobs in the manufacturing sector and stimulate economic activity in communities where these facilities are located. The tax credits could also lead to increased competition among infant formula manufacturers.
However, the effectiveness of the bill will depend on factors such as the responsiveness of companies to the tax incentives, the efficiency of the certification process, and the overall demand for infant formula.
Potential Benefits
- Increased Domestic Supply: Encourages more infant formula to be produced within the United States, reducing reliance on foreign sources.
- Job Creation: Stimulates investment in manufacturing facilities, leading to new employment opportunities.
- Economic Growth: Boosts economic activity in communities where infant formula production expands.
- Potential Price Reduction: Increased competition and domestic supply could lead to lower prices for consumers.
- Supply Chain Security: Strengthens the domestic supply chain for a critical product, making it less vulnerable to disruptions.
Potential Disadvantages
- Cost to Taxpayers: The tax credits will reduce government revenue, potentially increasing the national debt.
- Potential for Inefficiency: Subsidies could lead to inefficient production if companies are not competitive without the credits.
- Complexity of Implementation: The certification and recapture provisions could be complex and create administrative burdens.
- Limited Scope: The credit amounts and eligibility criteria may not be sufficient to significantly impact the overall market.
- Potential for Abuse: There is a risk that companies could manipulate production or investment to maximize tax credits without genuinely increasing supply.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the Commerce Clause (Article I, Section 8, Clause 3) by regulating interstate commerce related to infant formula production and supply. It also aligns with the general welfare clause (Preamble) by aiming to ensure the availability of a critical product for the health and well-being of children.
The bill's use of tax credits falls under the broad authority of Congress to tax and spend for the general welfare, as outlined in Article I, Section 8, Clause 1. There are no apparent violations of individual rights or freedoms guaranteed by the Bill of Rights.
However, the specific implementation of the tax credits and any potential discriminatory effects on certain businesses or individuals would need to be carefully monitored to ensure compliance with the Equal Protection Clause of the Fourteenth Amendment.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).