Congress subsidizes infant formula makers—with no guarantee prices will drop

What it does

This bill creates two federal tax credits to incentivize domestic infant formula manufacturing: a 30% investment credit (up to $150M per project, $750M total) for companies building or expanding formula plants, and a $2-per-pound production credit (capped at 18 million pounds annually) for companies selling domestically-made formula in the US. Both credits are limited to companies with less than $750M in annual revenue and sunset after 10 years; the credits are transferable and can be paid out directly by the Treasury.

Why we flagged it

The bill's operative mechanism is a direct tax credit—a subsidy—to private infant formula manufacturers. While framed as addressing supply resilience, the credits are unconditional on price, affordability, or public benefit; they are structured as pure production and capital incentives.

What the text implies

• The $2-per-pound production credit creates an incentive to maximize volume, not quality or affordability; manufacturers have no obligation to pass savings to consumers, and the credit may simply increase manufacturer profit margins.
• Transferability of credits (via Section 6418) allows manufacturers to sell unused credits to other corporations, creating a secondary tax-credit market that decouples the subsidy from actual formula production and may benefit financial intermediaries.
• The 50% domestic-sales requirement in the certification process can be met by selling to US distributors or retailers; there is no requirement that formula reach low-income families or be priced affordably, undermining the public-health rationale.
• The $750M revenue cap for eligibility may exclude larger, more efficient manufacturers and concentrate subsidies among smaller producers, potentially reducing economies of scale and raising long-term production costs.
• Recapture provisions (clawback of credits if requirements are not met) apply only to the 1-year period after project placement; after that window, manufacturers retain credits even if they later reduce domestic production or exit the market.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill addresses a genuine public-health concern—domestic infant formula supply resilience—by incentivizing domestic manufacturing capacity, which could reduce future supply shocks and price volatility that harm families. However, the credits are structured as broad tax giveaways to private manufacturers with minimal accountability: there is no price-control mechanism, no guarantee that subsidized production will lower consumer prices, no requirement that beneficiaries maintain affordability,

Who stands to gain

• infant formula manufacturers (domestic)
• private equity / investment firms (via credit transferability)
• tax credit brokers and financial intermediaries

Named in the bill

Internal Revenue Service (IRS), Secretary of the Treasury, domestic infant formula manufacturers, US infant formula market

Where it stands

5 cosponsors: 3 Democrats, 2 Republicans.

• Mar 10, 2025 — Introduced · Congress.gov: “Introduced in House”
• Mar 10, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $100,000 in lobbying spend. A filing names 4 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Zachary (Zach) Nunn, the sponsor, reported $1,895,327 in PAC receipts in the 2026 cycle.

• Bobbie Baby, Inc. — $100,000 on 2 filings

Lobbying Disclosure Act filings through Jul 14, 2026. A filing shows who paid to lobby on a bill it names, not what changed.