But skeptics are speaking out about the bill’s projected flaws.
One of the bill’s more vocal critics is Democrat Sen. Bernie Sanders of Vermont, who referred to the legislation Saturday as “the so-called Inflation Reduction Act” in a speech on the Senate floor. Citing analyses by the Congressional Budget Office and other economic organizations, Sanders predicted that the bill “will, in fact, have a minimal impact on inflation.”
The Penn Wharton Budget Model — which Democrat Sen. Joe Manchin of West Virginia often relies on when assessing legislation — has predicted that the bill’s impact on inflation is “statistically indistinguishable from zero.”
The analysis estimated that the bill would actually “slightly increase inflation until 2024 and decrease inflation thereafter … thereby indicating low confidence that the legislation will have any impact on inflation.”
However, Mark Zandi, chief economist of Moody’s Analytics, supports the bill, saying it will add a small amount of growth and “lean against inflation over the next decade.”
“It is more than paid for with tax hikes on large corporations and the well-to-do,” he added.
Moody’s says the bill “will modestly reduce inflation over the 10-year budget horizon,” becoming “more meaningful later in the decade.”
Many American families, however, want inflation relief now, not incremental decreases over time.
Controversial climate change costs
The 755-page bill also includes a proposed $369 billion in climate change provisions designed to shift Americans to green energy and propel the U.S. to being a global leader on climate change.
In a statement Sunday, Biden championed the bill as “the largest investment ever in combating the existential crisis of climate change.”
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Among the climate provisions are $3 billion for “environmental and climate justice” programs, $250 million for making federal buildings green, incentives for Americans to buy electric vehicles, and a methane emissions tax.
Yet some economists and other groups warn these measures could hurt those already facing pressure on their pocketbooks.
A recent report by CatholicVote, a non-profit advocacy group run by Catholic laity, says the poor will be negatively impacted the most.
Green energy measures have large up-front costs, which could lead to “increased utility bills for the lower-middle and lower-income families who still rely on these sources for heating, cooling, lighting, and refrigeration,” the report explained.
Michael Stojsavljevich, a managing partner at the economic advisory firm Geostratix and former Department of Labor official, told CNA that the bill is “inefficient” and will lead to more burdens on families.
“It does not do anything to address the underlying causes of inflation, which are supply-chain based and spending-based. We’re spending more money and chasing fewer goods,” he said.
Stojsavljevich says that the bill instead “shifts the focus to pursuing green energy policies" and goods that the average American can't afford or is unlikely to buy.