If Democratic lawmakers had to comply with federal truth-in-advertising laws, they’d all be up on charges for the blatantly false name given to the “Inflation Reduction Act.”
President Joe Biden claimed last week that “this bill will, in fact, reduce inflationary pressure on the economy.” In fact, it won’t. It was never meant to.
The University of Pennsylvania’s Wharton School examined the bill. Here’s what it concluded.
“The impact on inflation is statistically indistinguishable from zero.”
Worse, “the Act would very slightly increase inflation until 2024 and decrease inflation thereafter.”
In other words, it would add inflationary pressure today, when inflation is already running red hot, draining worker wages, and causing pain and suffering across the land.
Who cares what it does years from now, when, unless Biden really screws things up, inflation should be back to normal anyway?
You don’t have to look very hard to see why the bill’s inflation-fighting claims are pure bunk.
Deficits: On paper, the bill would reduce the federal deficit by more than $300 billion over the next decade. That’s supposed to be inflation fighting.
But while $300 billion in deficit reduction might sound like a big number, it amounts to less than 2% of the $15.7 trillion in projected deficits over those years. Which means it’s more like a rounding error than actual deficit reduction.
Worse, the bill front-loads $485 billion in new spending and subsidies, while the tax hikes and other deficit-cutting measures take time to kick in. As a result, it would increase deficits in the near term, and start cutting them only in 2027, according to the National Taxpayers Union Foundation.
As anyone who has followed how Congress makes spending and tax decisions knows, it’s only the near-term that counts, because nothing is ever set in stone.
Drug costs: Biden says the bill will fight inflation by lowering drug costs. How? By letting Medicare “negotiate” with drug makers over the price it will pay for prescription medicine – in other words, Medicare will impose price controls on pharmaceuticals.
But these price controls won’t kick in anytime soon. Medicare would first have to write the rules, which can take months, if not years. That means seniors won’t see any difference in their drug costs in the near future, if ever. And because the “savings” to Medicare will finance new spending elsewhere in the bill, taxpayers won’t see any savings, either.
Tax incentives to spend: Biden also brags that the legislation “brings down family energy bills by hundreds of dollars by providing working families tax credits. It gives folks rebates buy — to buy new and efficient appliances, to weatherize their homes, and tax credits for heat pumps and rooftop solar.”
So, it encourages more spending? Won’t that just add fuel to the inflationary fire?
Tax hikes on businesses: The plan would also boost business taxes by $315 billion over the next decade by imposing a 15% “corporate minimum tax.” Piling new costs on companies, in this case higher taxes, is not a recipe for bringing down the cost of goods and services, at least not on planet Earth.
The bill also hopes to squeeze another $125 billion in taxes by hiring an army of IRS auditors. How does this reduce inflation? Anyone?
An analysis of the bill by the Heritage Foundation concluded that “if enacted into law, this bill would exacerbate the economic crisis and lead to a longer and much more painful stagflation.”
If the law won’t charge Democrats with engaging in flagrant false advertising, voters will have to punish them by kicking anyone who voted for this “Inflation Lie Act” out of office.
— Written by the I&I Editorial Board