Keystone Today

President Joe Biden signed the Democrats’ $750 billion climate and healthcare bill dubbed the Inflation Reduction Act of 2022 on Tuesday, and while the bill has gained support from every Senate Democrat including Sen. Bob Casey (D-PA), it has been criticized by Republicans and various economists.

The Inflation Reduction Act of 2022 passed with a 51-50 vote in the Senate this month. With votes going along party lines, tying 50-50, the tie was broken by a vote by Vice President Kamala Harris. 

"JPMorgan economists said the Inflation Reduction Act will have “almost no effect” on price growth that’s currently running at the fastest pace in four decades," Bloomberg said on Twitter.

According to an August 9 report by Bloomberg, economists from JPMorgan Chase and Co. agree with other experts that include the nonpartisan Congressional Budget Office, the Committee for a Responsible Federal Budget, and the Penn Wharton Budget Model. They say that this legislation will have minimal effects on inflation, which was last reported to be 8.5% in July.

“The aggregate demand impulse is trivial,” JPMorgan’s chief US economist Michael Feroli wrote in a note Tuesday, according to Bloomberg. 

“Moreover, we believe the drug-pricing provisions will have little near-term impact on the CPI,” he said, in reference to the Bureau of Labor Statistics' consumer price index. “If there are longer-run beneficial effects for the supply side of the economy -- as its backers claim -- that’s a growth issue, not an inflation issue: in the long-run inflation is determined by Fed policy.”

Feroli added, “By itself, this very modest reduction in the fiscal impetus to aggregate demand implies almost no change to the near-term growth outlook.”

The National Law Review reported that it is estimated that $739 billion of revenue would be raised over the next 10 years through increases in taxes. Some important aspects of the act are establishing a 15% corporate minimum tax, modifying carried interest rules and expanding and adding new energy tax credits. A Reuters report added that the Inflation Act will support $430 billion in government spending on energy, electric vehicle credit and health insurance grants.

CNN reported that the signing of the legislation, which has been coined by some as a landmark tax, climate and health-care bill, was a victory for Democrats and the Biden Administration as midterm elections loom. He called it “one of the most significant laws in our history.

“With this law, the American people won and the special interests lost,” Biden said to an audience of Democratic members of Congress and administration officials as reported by CNN. “For a while people doubted whether any of that was going to happen, but we are in a season of substance.”

Biden criticized Congress Republicans, as each of them voted against the bill. He said that these were votes against lowering costs of prescription drugs, lowering health care costs and voting against the fair tax system. 

“Every single Republican – every single one – voted against tackling the climate crisis, against lowering our energy costs, against creating good paying jobs,” said Biden.