Biden says Americans need Inflation Reduction Act, economists disagree
Written by on August 5, 2022
UPDATED 10:14 AM PT – Friday, August 5, 2022
The Biden administration has paired up with Big Business to promote its latest social spending bill. The President said a Democrat-backed spending binge will combat inflation, but hundreds of economists disagree.
On Thursday, Joe Biden held a virtual conference with representatives of large businesses and labor unions to promote his so-called Inflation Reduction Act. He claimed the mega corporations had American families’ best interests at heart by putting their weight behind the bill. The Delaware native touted the multiple ways he alleged Americans will save money from health care to effects from the so-called climate crisis.
“The Inflation Reduction Act lowers prescription drug prices, lowers health insurance premiums, invests in clean energy that will create jobs and economic opportunities for business and labor, reduces the deficit, and makes common sense reforms to our corporate tax code,” claimed the President. “These are the facts”.
Biden praised the bill in tandem with the recently passed CHIPS Act, which the Democrat proclaimed would bolster clean energy investments and American manufacturing.
“They see how already because of our work over the last 18 months, American manufacturing is coming back stronger than ever,” he stated. “Where is it written that America can’t lead the manufacturing in the world? Six-hundred, thirteen-thousand manufacturing jobs created just since I took office, the most created in three decade.”
When we pass the Inflation Reduction Act, working families will get rebates to buy efficient appliances and weatherize their homes. And folks will have tax credits for efficient heating and cooling and rooftop solar.
Families will see their energy bills drop by the hundreds.
— President Biden (@POTUS) August 5, 2022
However, analysts are less optimistic about the bill than Mr. Biden. Two-hundred, thirty economists penned a letter to House and Senate leadership warning the spending package will serve as gasoline for red hot inflation. The economists warned the spending tax hikes will serve as a one-two punch to the economy, boosting demand while handicapping supply.
Furthermore, they asserted the suggested minimum corporate tax rate would suffocate a supply chain on life support, while medical price controls will stifle innovation. In a subsequent interview with Fox’s Larry Kudlow, Sen. Lindsey Graham (R-S.C.) called the bill a “complete fraud” because it will fail to attack inflation, while serving as shrapnel to taxpayers and businesses.
“That the subsidies to Obamacare include people $304,000 a year,” Graham noted. “That doesn’t sound like helping the poor and it also says the 15 percent minimum in tax that you described will create distance to build factories, buy equipment during a recession. Now who in the right mind wants to tax and spend during a recession?”
Democrats, however, shot back at the bill’s skeptics by producing a letter signed by 126 economists in support of the spending binge. The bill’s ambitions were once thought to be extinguished until Sen. Joe Manchin (D-W.Va.) came to an agreement on the measure with Senate Majority Leader Chuck Schumer (D-N.Y.) With Sen. Kyrsten Sinema (D-Ariz.) vocalizing her support for the legislation, it’s almost certain to pass through reconciliation.