The Biden administration on Thursday pushed Congress to pass a proposed $260 billion inflation relief bill, which the White House says will “reduce costs, reduce inflation and address a wide range of long-standing economic challenges.”
“My message to Congress is this: Listen to the American people,” Biden said at a virtual roundtable of US business leaders. “This is the strongest bill you can pass to lower inflation, continue deficit reduction, reduce health care costs, address the climate crisis, and advance America’s energy security, all while reducing the burdens facing working and middle-class families for.
Economists, policymakers and consumers alike agree that rising prices are a problem — inflation in the United States hit 9.1% in June, according to the U.S. Bureau of Labor Statistics. Food price increases are particularly painful for many American families: Last year, they rose an average of 10%, the largest annual increase in more than 40 years.
However, what few can agree on is what needs to be done to bring it back down.
Biden supporters say the law will raise state revenue by $313 billion by imposing a 15 percent minimum corporate tax — a move that will affect some of the nation’s wealthiest companies, especially those that paid nothing in federal income taxes on their profits in 2020.
It will also change the pricing of prescription drugs, which the administration estimates will save the federal government $288 billion a year. The law also invests more than $400 billion in energy security, climate change and health care.
The nation’s largest union umbrella group, the American Trade Union Confederation, supports the act, its president said Thursday at a roundtable with Biden.
“I am bringing the voice of our 57 unions, 12.5 million members, who believe this bill will help us reshape the future and deliver real help to working families by reducing rising energy and health care costs,” the president said. AFL-CIO. Liz Shuler. “This will bring fundamental economic change across America.”
But some economists aren’t so sure.
A study from the Penn Wharton Budget Model predicts the act would have little impact on inflation, forecasting prices would rise slightly for another two years before falling.
The Committee on a Responsible Federal Budget found the opposite, saying the law would “very modestly reduce inflationary pressures in the near term but reduce the risk of sustained inflation over time.”
Moody’s Analytics reached a similar conclusion, while the nonpartisan Congressional Budget Office estimated the bill would reduce the U.S. budget deficit by $102 billion over 10 years.
Economist Steve H. Hanke, a professor of applied economics at Johns Hopkins University and founder and co-director of the university’s Institute for Applied Economics, Global Health, and the Study of Business Enterprise, said Thursday that the move was “ill-conceived.” and includes the one thing people seem to dislike more than rising prices: taxes.
“The idea that it’s going to do anything about inflation is ridiculous,” he said Thursday at a seminar with the Jewish Policy Center. “It’s going to change the relative prices of different things — exactly how, I don’t know, because I haven’t gone through the 10,000-page thing.” And it looks to me like a tax increase bill.”
The US Senate hopes to vote on the legislation in the coming days. Given the razor-thin majority of Democrats in the Senate and the fractious nature of current American politics, Biden needs every Democrat in the upper chamber to vote for him.
Democratic Sen. Joe Manchin made headlines last week when he dropped his opposition to the act, but Arizona Sen. Kyrsten Sinema, the other senator on Biden’s economic proposal, has yet to indicate whether she will support it.
Biden Pushes Inflation Reduction Act, Amid Divided Opinion
Source link Biden Pushes Inflation Reduction Act, Amid Divided Opinion