Democrats’ “Inflation Reduction Act” Will Only Lead to Even Higher Prices

In what can only be described as a cruelly-titled piece of legislation, Sen. Joe Manchin (D-WV) went against his typical budget-hawk rhetoric to lead the way in getting the “Inflation Reduction Act of 2022” moving forward this week.

Manchin agreed to come on board with Senate Majority Leader Chuck Schumer (D-NY) in supporting the bill as a budget reconciliation measure.

The bill focuses primarily on several priority issues that the Biden administration has been fighting for. It addresses climate change programs, health care expansion, and tax policy changes. It is essentially a scaled down version of the Build Back Better package previously promoted by Biden and rejected by Manchin.

Even though Manchin has pledged his support, Schumer still must have all 50 Democrat votes in the Senate to get the bill passed. Sen. Kyrsten Sinema (D-AZ) held out along with Manchin on the previous Build Back Better spending measure and is not a guaranteed yes vote on the new bill.

Sinema’s office said that she is still reviewing the bill and is also waiting on the opinion of the Senate parliamentarian about whether the bill can be advanced as a budget measure in order to avoid the filibuster rule. If the bill is deemed to need 60 votes to move past a filibuster, it will be stopped dead in its tracks.

The Senate is set to begin its summer recess on August 5, leaving Schumer only the coming week to get the bill passed without a significant delay.

With the midterm elections approaching rapidly, there are several vulnerable House Democrats who may not support the bill there even if it makes it out of the Senate. Speaker Nancy Pelosi can only tolerate a small handful of defectors if the bill is to have a chance in the House.

Despite its title, the bill will not only fail to reduce inflation, it will certainly lead to even higher prices with more printed money chasing fewer available goods.

Giving the newest version of Build Back Better a new name claiming that it is a plan for reducing inflation is particularly insulting to common sense.

Increased corporate taxes will certainly be passed on to consumers and result in lowered production and hiring.

While the bill claims that it includes a “deficit reduction package,” that only involves normal Washington accounting sleight-of-hand that will give Manchin and other Democrats cover when they tell their voters back home that they are addressing runaway spending.

Democrats are essentially claiming that increased taxes and more aggressive IRS collection measures will create so much revenue that the new spending will be “free.” Among multiple other problems, even if the bill pulls off increased tax revenue, that will only mean even more private capital will be taken out of production, costing more domestic jobs.

The new bill is also another $369 billion spending bonanza on “green” programs that will further erode American energy independence and lead to even higher prices. It seems inconceivable that Manchin could sell his West Virginia constituents on a proposal that levies massive new taxes on natural gas and coal production.

Meanwhile the corporate media is eagerly supporting the notion that $430 billion in brand-new spending is a “pared-down” plan.