The White House is defending the Inflation Reduction Act against a report by the unbiased Congressional Budget Office that suggests the legislation won’t significantly lower inflation in the coming years.
“Can you comment on the new CBO analysis on the Inflation Reduction Act that says it would have almost no or negligible impact on inflation in 2022 and 2023,” White House press secretary Karine Jean-Pierre was asked during a conference call. Friday briefing.
Jean-Pierre replied, “You know, leading economists have said that this Inflation Reduction Act, which has been analyzed by them and looked at by these economists, will indeed reduce inflation.”
Jean-Pierre was then asked whether her answer means she “rejects” the CBO report and whether it is fair to call the legislation the “Inflation Reduction Act” when the CBO says inflation will not be meaningfully reduced.
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“Well, if you think about the Inflation Reduction Act, it’s also going to have an effect on drug costs,” she explained. “Reducing prices for pharmaceutical costs, which will make a big difference for seniors to families.”
Jean-Pierre went on to say that the legislation will cut energy costs, the cost of utility bills and Medicare, while also investing $300 billion in deficit reduction.
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“That’s going to make a difference,” said Jean-Pierre. “That’s going to fight inflation, which is why it should be called the Inflation Reduction Act, because that’s exactly what it’s going to do.”
Jean-Pierre responded this week to a report from the CBO that said the bill would have a “negligible” effect on inflation.
“In calendar year 2022, according to the CBO, passing the bill would have a negligible effect on inflation,” the office said. In calendar year 2023, according to the bill, inflation would probably be between 0.1 percentage point lower and 0.1 percentage point higher than under the current law, the CBO estimates.
Jean-Pierre’s defense of the legislation comes the same day Senate majority leader Chuck Schumer, DN.Y., said a group of 230 economists warning that the legislation will increase inflation is “wrong.”
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“They’re wrong…I don’t know who that list was…it’s as clear as the nose on your face,” Schumer told reporters.
The economists wrote in the letter that the US economy is at a “dangerous crossroads” and that the “inappropriately named ‘Inflation Reduction Act of 2022’ would be nothing like that and would instead perpetuate the same fiscal policy mistakes that have contributed to precipitating the current troubling economic climate.”
US job growth unexpectedly accelerated in July, defying fears of a workforce slowdown, even as the labor market faces the dual threat of inflation and rising interest rates.