The major Democratic bill on climate change, health care and corporate taxation signed by President Joe Biden was dubbed the Inflation Reduction Act, but independent analysts caution against assuming it will have a major impact on inflation.
that the measure would reduce deficits by $1 trillion over two decades. That number could climb to nearly $2 trillion if the savings on interest are included, the committee said.Debt is the accumulation of all prior deficits, minus any annual surpluses. And the debt would still be rising with this bill’s provisions in play. It would just be rising at a slower pace.
"That would require significant increases in taxes and reductions in spending," said Kyle Pomerleau, a senior fellow at the American Enterprise Institute. And those tax increases and spending cuts are far beyond the scope of what the Democratic bill included, he said. The letter specifically cites provisions in the bill that could leave more money in Americans’ pockets. Those provisions allow Medicare to negotiate lower prices with pharmaceutical companies; reduce Medicare out-of-pocket costs for drugs; and prevent insurance premiums from spiking under the Affordable Care Act.
However, several independent analyses have concluded that the bill wouldn’t actually move the needle much on inflation either way.at the University of Pennsylvania concluded that the measure’s "impact on inflation is statistically indistinguishable from zero.", Congress’ independent arbiter for budget matters, wrote that the measure’s impact on inflation would be "negligible" in 2022 and either slightly lower or slightly higher in 2023.
Similarly, the provision that allows Medicare to negotiate for drug prices will be phased in over several years. That would mean that the savings for beneficiaries won’t kick in immediately.
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