On Aug. 16, President Biden signed the newly labeled “Inflation Reduction Act of 2022” into law.
That’s the new name given by Senate Democrats and Biden to the remnants of the old Build Back Better Bill, the vastly expensive tax-and-spending measure that stalled in Congress.
In a secret deal between Senate Majority Leader Chuck Schumer and holdout Sen. Joe Manchin (D., W.Va.), a 725-page bill was written by the two senators and staff in the basement of the Capitol.
No committee meetings or hearings were held, and no Republican input solicited. The bill passed on a strictly partisan basis, without a single GOP House or Senate member voting in favor.
The bill raises $739 billion in tax increases and reduced outlays, provides $433 billion in new spending for climate policy and health care, and claims $300 billion in federal deficit reduction over 10 years “to fight inflation.”
But nonpartisan experts believe it will have no real downward pressure on inflation – including the Congressional Budget Office (“negligible at best”), the Bi-partisan Policy Center (“small impacts one way or the other”), and the Penn Wharton Budget Model (“statistically indistinguishable from zero”).
Even bill supporter Bernie Sanders agrees: The bill won’t have any noticeable impact on inflation at all.
Everything in the bill was proposed by Democrats before inflation became an urgent problem, and the bill funds progressive, far-left priorities.
The largest piece of spending is on corporate welfare for green-energy companies. Corporate tax credits worth hundreds of billions of dollars are given them.
Democrats are also excited about the bill’s major funding initiative – $60 billion – for “environmental justice” projects. “Environmental justice” was a fringe cause not long ago. It’s now receiving twice as many taxpayer dollars over the next 10 years from this bill as the entire Department of Justice spent in 2021.
Democrats advertise price controls on Medicare drugs in the bill, but they start in 2026 with only 10 high cost drugs that lack generic competition. This far-off policy has no effect on today’s inflation.
Even the claim of budget reduction is a fallacy. It uses a budget gimmick, by setting an arbitrary deadline on Obamacare provisions that Democrats fully intend to be permanent. The bill actually increases the deficit in the next four years.
The bill provides $470 billion in revenue increases via new taxation.
While Biden promised never to raise taxes on families making less than $400,000, the analysis from the nonpartisan Joint Committee on Taxation says otherwise.
They estimate the bill will hurt Americans in every income bracket, with more than half the new taxes being levied on people making less than $400,000 a year.
A new minimum tax on “book income” is imposed on companies of over $1 billion. The Joint Committee on Taxation estimates that 50% of this new book tax would fall on manufacturers – the effects of which could be devastating in our competition with China.
These higher taxes also mean lower wages for workers. The U.S tried a minimum book tax in the 1986 tax reform – it was repealed in 1989.
The new “Inflation Reduction Act” has many damaging provision but the $80 billion Internal Revenue Service expansion is the most audacious. Official audits show a long record of IRS incompetence.
Yet $80 billion will go to hire 87,000 new employees, doubling its current payroll. Democrats are now arming the IRS with more money and manpower to unleash on Americans. Audit targets will include more small businesses.
Having created the inflationary mess in the first place with massive unrestrained spending, Democrats aim now to con voters into believing they’re cleaning it up.
Democrats are tone-deaf. Tear off the absurd new “Inflation Reduction Act” label and examine reality. What remains is a plan to “re-engineer” the U.S. economy, with another hefty expansion of government.
E-mail Jim Hartman at lawdocman1@aol.com.
