(Headline USA) The White House admitted this week that the Inflation Reduction Act, a bill introduced by Sens. Joe Manchin, D-W.Va., and Chuck Schumer, D-N.Y., won’t actually lower inflation rates.
The $739 billion spending package, which includes radical elements of the Green New Deal, would only lower the Consumer Price Index about 0.33% by 2031, according to Moody’s Analytics chief economist Mark Zandi. The “impact of this legislation on inflation is marginal,” Zandi pointed out, adding that its impact would be “more meaningful later in the decade.”
White House aide Jesse Lee, a communications adviser to the National Economic Council, quickly touted Zandi’s findings, saying “This is actually the overwhelming consensus.”
Senate Minority Leader Mitch McConnell’s, R-Ky., office pointed out that this isn’t encouraging news for the millions of Americans currently suffering from record-breaking inflation rates.
White House officials’ own rosiest, best-case-scenario spin is that their “Inflation Reduction Act” will have taken one third of one percentage point off inflation by nine years from now? https://t.co/l5HMKv9Mcb
— Andrew Quinn (@AndrewCQuinn) August 1, 2022
The Heritage Foundation’s Jon Cooper agreed, arguing that this probably the “best number” the White House could come up with to defend the bill.
White House comms spiking the ball over a bill that doesn’t reduce inflation until 9 years from now.
And keep in mind, this is obviously the best number they could come up with. https://t.co/MxlIFTy3Dt
— John Cooper (@thejcoop) August 1, 2022
A separate analysis of Manchin’s bill by the nonpartisan Congressional Joint Committee on Taxation found that it would actually hurt workers more than it helps by raising taxes on millions of low-income and middle-class earners making less than $400,000 annually.
By 2031, workers earning less than $400,000 would be paying as much as two-thirds of the new tax revenue collected that year as a result of the bill, according to the report.
These new taxes, plus another 15% minimum tax on corporations, might actually make inflation worse, according to Levon Galstyan, a Certified Public Accountant with Jersey City- based Oak View Law Group.
“A deterrent to output would be that manufacturers would pay around half of all new levies,” Galstyan explained. “The legislation would subject small businesses to a horde of tax enforcers, driving up prices and limiting their capacity to serve customers.”
