After Friday’s vote by the U.S. House of Representatives to pass the Inflation Reduction Act, several national reports are now questioning the validity of claims by Democrats that the inflation bill will actually help reduce inflation.
In fact, the Georgia Republican Party sent out an email Tuesday that refers to a CBS News report “admitting that the Democrats lied about their inflation bill.”
“At a time when inflation is hitting 40-year highs, Raphael Warnock and Sanford Bishop chose to sell out Georgians to Joe Biden’s witless agenda. Democrats don’t care about you, they only care about themselves,” said Georgia Republican Party Press Secretary Danielle Repass
According to the CBS News report, “The Inflation Reduction Act is aimed at tackling a host of problems…but there’s one issue it may not solve: reducing inflation.” The article is based on a report from the Penn Wharton Budget Model – a group of data scientists and economists at the University of Pennsylvania who predict the fiscal and economic impacts of legislation.
The article states that “The Inflation Reduction Act would invest nearly $400 billion in energy security and climate change proposals, aimed at reducing carbon emissions by approximately 40 percent by 2030. It also would allow Medicare to negotiate with drugmakers on prescription prices and would limit out-of-pocket drug expenses for seniors to $2,000 annually. The bill also directs $80 billion in funding to the IRS, aimed at helping the underfunded agency hire more auditors and beef up its customer service and technology.”
But the impact on inflation “is statistically indistinguishable from zero,” the Penn Wharton Budget Model said on Friday.
The nonpartisan Congressional Budget Office reached the same conclusion, adding that the bill will have a “negligible” effect on inflation this year and next.
The CBS News article says the legislation “has wide-ranging goals yet does little to directly tackle the underlying causes of inflationary pressures pushing up the cost of everything from food to housing, the economists predict. Still, the bill could help some Americans lower their health care costs, through its provisions for seniors’ prescriptions and another item that would lower what consumers pay for some Affordable Care Act plans.”
While the nonpartisan Congressional Budget Office concluded last week that the changes would have a “negligible” impact on inflation this year and next, they do expect the bill to help lower inflation in later years.
The article goes on to say that the White House has trumpeted a letter signed by more than 120 economists, including several Nobel Prize winners and former Treasury secretaries, that highlights the bill’s long-term effects, saying it would put “downward pressure on inflation by reducing the government’s budget deficit by an estimated $300 billion over the next decade.”
The article states that “The Biden administration has vowed that the bill won’t raise taxes on households earning less than $400,000. The impact on wealthier households could come from a number of provisions, ranging from an increase of IRS agents who could target high-income households for audits to an increase in corporate taxes. The latter includes a new tax on share buybacks that would largely impact shareholders — or the type of wealthy Americans in the top income brackets.”
