“The Inflation Reduction (?) Act of 2022”
This is the eleventh-hour Schumer-Manchin Congressional compromise designed, perhaps, to solve most of American Progressive’s perceived current problems, except for the wide-open southern border, which, if headlined, would have, instead, made it “The Illegal Migrant Acceleration Act.”
The intent of the Schumer-Manchin title is actually one-third correct. The word “Act” is correct. For it really is just an act and an elaborate Democrat-driven masquerade. The large number of conservative columns already examining its contents have universally come to the conclusion that the title is just plain old false advertising. Regarding the alleged key “title” intent of the Act, the respected Penn Wharton Budget Model has assessed the legislation’s “inflation reduction” claims and concluded that the “estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation.” In fact, it’s projected to actually increase inflation, marginally, in 2024, before an Act-related “negligible fall” in the inflation index by the latter part of the decade. So, we’re not off to a very convincing start, already negating the legislation’s title!
The inflation concern, along with federal debt impact, among critics is because this legislation calls for spending $739-billion over a veritable buffet of recipients, chief of which is the central $369-billion chunk which is destined to go to “green energy subsidies, incentives, and tax rebates for fighting climate change.” Virtually 50% of the planned total expenditures will, thus, be going to boost the Progressive ‘greenies’ and their ever-increasingly-expensive fantasy of believing and preaching that we can actually influence climate. And some, but not nearly all, of this huge expense is to be paid for, only partially, by increased taxes on corporations and on individual citizens. And not just on those making over $400,000 per year, as promised. The increases will filter all the way down to even those Americans making between $20K and $30K per year (1.1% tax hike in 2023)! That no tax increase for under $400,000 earnings ‘promise’ appears now to have been yet another administration untruth. And those increased taxes on corporations are certain to impact their revenues available for future research, innovation, productivity improvements, etc. It could also end up impacting jobs.
However, within this jumbo federal debt-increasing package, for companies, there will be “tax credits for spending on wind, solar, critical minerals, biofuels, hydrogen, carbon capture, nuclear, sustainable aviation fuel, lithium-ion batteries, electric vehicle charging stations, and more. Auto makers will get $20-billion in cheap federal loans for building ‘clean vehicle’ factories.” You’ll notice, not one dollar was proposed for the fossil fuel industries, the dependable fuel sources that will continue to power the nation for many decades to come, including, by the way, providing the electricity needed for those tax-credited EV charging stations! It’s been quietly suggested that the reason Senator Manchin pivoted and caved on this massive spend-a-thon was the ‘promise’ that, in separate legislation to come, he would be given approval for the construction and operation of the Mountain Valley Pipeline, in his home state of West Virginia, for transmission of natural gas from WV to the East Coast, a pet project he has been after for many years. Scratch mine and I’ll scratch yours.
Wrote Rich Lowry about this Act’s huge expenditures: “At a time of inflation, it offers hundreds of billions of new spending. As the economy dips into a recession, or close to one, it offers hundreds of billions in new taxes. And its main element is more green-energy spending when the climate is far down (most) voters’ priority list.” More massive new spending, when tacked onto the just-passed “CHIPS” legislation ($285-billion meant to incentivize increased domestic production of computer chips), would bring those combined Democrat-led, Congressionally-approved, federal expenditures to about $1-trillion, continuing to impact both our national budget deficits and America’s serious long-term debt problem!
This non-Inflation Reducing Act also includes plans to extend subsidies for the Affordable Care Act ($64-billion), and to force drug price lowering on pharmaceutical manufacturers. That’s called price-controlling in the real world and is simply manipulating free market capitalism for government advantage. The National Association of Manufacturers fears that the increased corporate taxes contained within this Act could end up reducing income for workers. And that means, they predict, that “it will cost over 218,000 workers their jobs.” No one on the Progressive side has yet openly stated that a large number of American jobs could be lost through this Act and these proposed increases in corporate taxes. Oh, and speaking of taxes, primary, now, those on small businesses and individuals, the Act also includes billions of dollars to double the size of the IRS, by adding 86,000 more IRS agents(!) to do more and more audits to find tax money the government feels it’s due and not receiving. And, of course, if there’s an issue, we the people will be forced to settle with the IRS, rather than undertaking legal challenges we can’t afford, and the government can!
At this point, you might be less than stunned to know that many conservative commentators are not thrilled with this massive increased set of planned expenditures, including some of the “gimmicks” they’ve discovered lurking within the shadows. For instance, American Legislative Exchange Council economist Jonathan Williams said that the combination of increased taxes and increased spending makes this legislation “economic malpractice.” Wrote Gerald Baker in the Wall Street Journal: “Since the spending provisions kick in more quickly than the revenue-raising provisions, the bill would actually increase the deficit in its first few years. Having created the inflationary mess in the first placed, Democrats now aim to con the country into believing that they’re cleaning it up, even as they (effect) a further march in their plan to remake the country.” And this from Spencer Brown: “The Inflation Reduction Act of 2022 will be the largest package on climate change ever passed by Congress. Democrats are using one of the most painful of Biden’s crises as a Trojan horse to force pieces of Build Back Better through Congress without having any intention of actually helping Americans who are struggling to make ends meet in the Biden recession.”
From E.J. Antoni, Heritage Foundation research fellow: “The greatest example of deceptive marketing today is the name that the Democrats have chosen for this piece of legislation. It does nothing to address the problem of inflation, and instead, only exacerbates the existing high prices and will drive prices higher. It’s just adding insult to injury.” Bruce Thornton wrote: This Act is “the fiscal version of destroying the village in order to save it. If this bill passes, it will be yet another instance of throwing money into the ‘Green Energy’ hole that’s already swallowed Germany and other EU countries.” To that reference, Thornton then adds, from a “meticulously documented (scientific) brief,” that “science demonstrates that there is no climate-related risk caused by fossil fuels and CO2, and no climate emergency.”
No collection of conservative critiques would be complete without the ever-sage words of Senator John Kennedy (R-LA), who responded: “At some point, we need to stop asking who needs to pay more taxes and start asking what the hell happened to all the money we had! But I digress. Because of inflation, which was made in Washington by President Biden, more and more Americans are getting really good at barely getting by, in the wealthiest country in all of human history, and it’s because of inflation. Senator (Schumer &) Manchin’s bill is an inflation machine…and it’s a massive tax increase on oil & gas.” And he concludes: “I don’t think they (Senators) intentionally want to hurt people. I don’t think (they) want more Americans to have to live in a tent behind Whataburger, but that is going to be the result of (this) bill.” Classic wisdom & quips from Senator John Kennedy!
As of this post (8/6 5:12 PM), the Senate has not yet passed this legislation, but its almost a certainty. Schumer is trying hard to get it done before the August recess carries his votes away. We can hope that at the very least it gets stalled, providing time later to perhaps improve the thing, if that’s even possible. That in mind, we’ll conclude with Joseph Klein’s suggested alternative title for the Senators’ Inflation Reduction Act. Klein thinks his title is far more appropriate: The American Prosperity Reduction Act of 2022.”
ADDENDUM: Act passed by U.S. Senate at about 4 PM Sunday afternoon (8-7-22). 50 – 50 tie broken by VP Harris, for 51-50 passage. No Republicans voted to support the measure.
(Penn Wharton Budget Model analysis via frontpagemag.com, Joseph Klein, 8-5-22; $369-billion to green energy via frontpagemag.com, Bruce Thornton, 8-4-22; Tax increase for even modest earnings via foxbusiness.com, Larry Kudlow, 8-3-22; Tax credits for renewables, etc., via The Wall Street Journal, 7-29-22; Manchin project in return for “Inflation” Act approval via realclearenergy.org, Benjamin Zycher, 8-4-22; Lowry quote via jewishworldreview.com, Rich Lowry, 8-2-22; NAM job loss projection via foxnews.com, Liz Peek, 8-2-22; Williams quote via foxnews.com, Staff, 8-6-22; Baker quotes via The Wall Street Journal, 8-2-22; Brown quote via townhall.com, 7-29-22; Antonin quote via foxnews.com, Lisa Bennatan & Isabelle McDonnell, 8-2-22; Thornton quotes vis frontpagemag.com, Bruce Thornton, 8-4-22; Kennedy quotes via breitbart.com, Pam Key, 8-3-22; Klein’s alternate Act title via frontpagemag.com, Joseph Klein, 8-5-22).