President Biden celebrated the first anniversary of the Inflation Reduction Act (IRA) by touting it as an economic success, even though economists say a corresponding slight dip in inflation has nothing to do with the legislation. Reports on August 16 say inflation was down from 9% to 3.2%, but Harvard University economist Jason Furman said of the IRA: “I can’t think of any mechanism by which it would have brought down inflation to date.”
Alex Arnon of the University of Pennsylvania agreed. “We can say with pretty strong confidence that it was mostly other factors that have brought inflation down,” he said.
The President has even conceded that the legislation’s title is inappropriate. “I wish I hadn’t called it that,” he said in August while acknowledging that it did little to tackle the rising living costs.
The bill contains several provisions aimed at tackling “climate change” and allows for the investment of billions of taxpayer dollars in green initiatives. A Bank of America analysis claims that roughly half of the $132 billion investments are earmarked for electric vehicles and batteries, which the bank estimates will create above 86,000 jobs.
Democrats say the legislation will cut the US budget deficit by $300 billion over the next ten years and will do so by placing a 15% corporate tax on large companies, scrutinizing the taxes of the rich, and negotiating drug prices with pharmaceutical corporations.
Republicans are already planning to overturn the IRA if a GOP President is elected to the White House in 2024. Conservative groups have comprised a plan known as Project 2025 which would eliminate the Inflation Reduction Act and cut the “environmental justice” aspect of the Environmental Protection Agency’s (EPA) remit.
The document argues that environmental policies should be state-led and “create earnest relationships among local officials and regulated stakeholders.” It goes on to say that conservatives should treat the EPA with skepticism as it has “long been amenable to being coopted by the Left.”
