Just over two months ago, President Joe Biden signed into law one of the most ironically named bills passed by a Congress infamous for naming bills ironically: The Inflation Reduction Act of 2022.
Since then, the White House hasn’t stopped crowing.
Speaking of ironic names, a White House “FACT SHEET” (I think the all-caps is supposed to convince readers that these are FACTS, PEOPLE! FACTS!) enumerated many of the supposed benefits of the new law.
“The Inflation Reduction Act lowers prescription drug costs, health care costs, and energy costs. It’s the most aggressive action on tackling the climate crisis in American history, which will lift up American workers and create good-paying, union jobs across the country. It’ll lower the deficit and ask the ultra-wealthy and corporations to pay their fair share. And no one making under $400,000 per year will pay a penny more in taxes.”
Most of that is the sort of typical political puffery that both sides use to tout their desired or achieved aims. Very little, however, is said about actually, you know, reducing inflation.
Unsurprising, I suppose, given that even Biden’s climate czar and failed Democratic presidential nominee John Kerry called the Inflation Reduction Act a “completely misnamed piece of legislation” shortly after its passage.
Also unsurprising: In the month following passage of the IRA, consumer prices were 8.2 percent higher than they had been the year before, according to The Associated Press — higher, even, than most economists had expected.
Given all of that, we might expect even such loyal Biden supporters as the talking heads at CNN to question what, exactly, this law was accomplishing regarding inflation.
“I’m just curious, and as a lot of Americans are curious, when the so-called Inflation Reduction Act will really start to bring down inflation,” CNN host Dana Bash asked White House economic adviser Cecilia Rouse on Sunday’s “State of the Union.”
When Dana Bash said “so-called Inflation Reduction Act,” Rouse must have known she was in trouble. But she should have expected that question, or at least one like it. Maybe she’d been lulled into a false sense of security by the legacy media’s coddling of Joe Biden and his administration over the past couple of years.
Are you feeling the pressure of inflation?
Whatever the reason, she didn’t seem to have a ready answer, and, in fact, appeared a little lost while the question was being asked.
“So, the, the — many parts of the bill will start to take effect next year,” Rouse said. “For example, there are tax credits for energy to help people weatherize their homes and also bring down other forms of energy costs. So, we are focused on helping to make that transition to clean energy in a way that brings down energy costs for families.”
Weatherizing your home may cause you to spend less money heating and cooling it, but it won’t make the energy used to heat or cool it less expensive. If the president’s economic adviser knows what inflation is, you can’t tell it from this answer.
“So, this is — this is tough. There’s no question about it. This is a challenge,” she added, in what was basically the only accurate statement in her reply.
Less truthfully, she added: “What I will say is that this economy is stronger than almost every other economy, that the Federal Reserve is focused on bringing down inflation. This president is committed to doing fiscal policy that is complementary to the Federal Reserve’s actions, so that we can get through this period just as quickly as possible.”
If that sounds to you like the president’s economic adviser shifting the responsibility for reducing inflation from the Inflation Reduction Act to the Federal Reserve, that’s probably because what the president’s economic adviser was doing was shifting the responsibility for reducing inflation from the Inflation Reduction Act to the Federal Reserve.
If you have a strong tolerance for cringe, you can watch the exchange here.
In other words, Rouse essentially admitted — probably because she was unprepared with a better answer — that the Inflation Reduction Act will do virtually nothing to combat inflation. This explains why the Penn Wharton Budget Model estimated that the new law’s “impact on inflation is statistically indistinguishable from zero.”
It also explains why the Congressional Budget Office estimated that “enacting the bill would have a negligible effect on inflation, in CBO’s assessment. In calendar year 2023, inflation would probably be between 0.1 percentage point lower and 0.1 percentage point higher under the bill than it would be under current law.” (That’s essentially government-speak for “statistically indistinguishable from zero.”)
What it doesn’t explain is why the American people continue to vote into office career politicians who would write, support, vote for and ultimately enact a bill that doesn’t even really pretend to live up to its name — even ironically.
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