In recent weeks, President Joe Biden and Washington Democrats have passed massive tax and spending bills, along party line votes, that they argue will help bring down inflation, boost U.S. manufacturing, and create jobs in the clean energy space. One of the most significant bills that Democrats are cheering lately is misleadingly titled the “Inflation Reduction Act,” which is the core of what remains of Biden’s signature “Build Back Better” act that, in its entirety, died earlier this year. What remains is a massive, roughly $740 billion climate, health, and tax and spending bill that would do a lot of things, but will it actually reduce inflation? What will the impact be on American families who are struggling now to pay the rent, buy groceries, and fill their car with gas? Using flawed tax models and other budget projection gimmicks, DC Democratic elites are selling Americans a fake bill of goods. Here is what we know the Inflation Reduction Act will really do.
First, this bill should be relabeled as the IRS Inflation Act, for the fact that the Internal Revenue Service is set to receive a nearly $80 billion dollar boost over the next nine years. Of that, $14.6 billion will help the federal agency more than double their staff with a self-projected goal of hiring nearly 87,000 new agents. That would make the IRS one of the largest non-military agencies. The added personnel will be unleashed on honest, hard-working American businesses and families who will face increased federal tax scrutiny and audits. Those audits, Democrats project, will bring in $737 billion over 10 years, offsetting the bill’s tax incentives and rebates, and thus reduce the deficit by more than $300 billion, citing early reports from nonpartisan congressional tax and budget offices.
Second, the numbers are as misleading as the Act’s title. An updated analysis from the Penn Wharton Budget Model finds that the Act “would have no meaningful effect on inflation in the near term” and projecting “a low level of confidence that the legislation would have any measurable impact on inflation.” In addition, Americans for Tax Reform reports that updated scoring from the Congressional Budget Office (CBO) now finds that the Act will “add roughly $25 billion in deficits during fiscal years 2022 through 2026. This is a significant revision from CBO’s earlier score which claimed an $18 billion reduction in the deficit during the same timeframe.”
Third, Americans are about to pay more for household goods and services as a result of the act that does “nothing to reduce gasoline and electricity bills. Nothing to increase American energy production. Nothing to spur innovation,” The Heritage Foundation’s Research Fellow for Energy, Climate, and Environment Katie Tubb says. “Instead, it will increase taxes on average Americans, exacerbate inflation, hike prescription drug prices and swell federal debts.”
One wonders if the hundreds of Democrats from across the country who gathered on the White House lawn to a party for the Act’s passage will call back to get answers from the Biden administration on why their numbers weren’t accurate at all.
The Inflation Reduction Act is about to have a devastating impact on American families, who are already $4,200 poorer today than when President Biden took office, the Heritage Foundation reports. Republicans, none of which voted for the Act in either chamber, know what’s coming, which is why House GOP Leader Rep. Kevin McCarthy (R-CA) has already vowed to cut the IRS budget back down to size when Republicans take back the House of Representatives in the upcoming midterm elections. Republicans need to hammer the truth about the Act on airwaves and remind voters that Democrats have been, are, and will always be reckless with their money, always relying on taxing and spending schemes that just don’t work. The alleged benefits of the Inflation Reduction Act are merely a facade, which is really symptomatic of President Biden and the Democratic Party’s hurtful economic agenda, and Americans aren’t buying it.
Bob Carlstrom is President of AMAC Action