Congress subsidizes infant formula makers—with no guarantee prices will drop
H.R. 2008 — Infant Formula Made in America Act of 2025 · Filed by Zachary (Zach) Nunn (R-IA) · 5 cosponsors · Introduced Mar 10, 2025 · Referred to committee
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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 full analysis lists 5 implications of this text.
Who stands to gain
infant formula manufacturers (domestic); private equity / investment firms (via credit transferability); tax credit brokers and financial intermediaries