The enormous government endeavour known as the “Inflation Reduction Act” has caused a partisan divide among Wisconsin’s congressional delegation, as is so frequently the case.
Despite its name, several economic evaluations have concluded that the bill will probably not have any immediate effect on inflation.
However, it does include measures that are designed to cut the costs of health care, combat climate change, and reduce the deficit in the national government.
Democratic President Joe Biden, who signed the bill into law on Tuesday afternoon, claimed that it will “cut prices for American people, tackle the climate crisis, reduce the deficit, and finally make the richest corporations pay their fair part in taxes.” Biden also signed the bill into law.
The legislation, which is a scaled-down version of Vice President Joe Biden’s “Build Back Better” proposal, will allow Medicare to negotiate with pharmaceutical companies on prescription drug prices, cap out-of-pocket drug expenses for seniors at $2,000 per year, extend Affordable Care Act subsidies, spend nearly $400 billion on initiatives designed to significantly reduce greenhouse gas emissions, and boost funding for the Internal Revenue Service by $80 billion.
In addition, the legislation will make it possible for Medicare to negotiate with pharmaceutical companies on prescription drug prices.
U.S. Representative for Wisconsin and Democrat Mark Pocan told reporters in Madison on Monday that the measure “does assist cut prices for the American people.”
“I believe you need to keep in mind that worldwide inflation has always been worldwide inflation. We are making an effort to do something in this country, and this will benefit the most about the costs of both health care and electricity.
Democratic U.S. Representative Gwen Moore lauded the bill as a “once-in-a-generation piece of legislation” that prioritizes “people over politics” in its implementation.
Moore stated in a statement that “while this legislation took compromises and is flawed, I am so delighted to support the Inflation Reduction Act,” which will have a good impact on the people who live in his district as well as millions of other Americans.
The legislation imposes a minimum tax of 15% on firms with annual revenue of more than $1 billion, in addition to a tax of 1% on stock buybacks. Both of these taxes are progressive.
Along with increased enforcement by the IRS, these tax hikes are part of a plan to put an additional $300 billion toward reducing the federal deficit.
Pocan’s neighbour to the east, Republican U.S. Representative Bryan Steil, has been vocal in his opposition to the plan, describing it as a “more reckless expenditure,” a tax hike, and an investment in “pet projects” rather than a reduction in inflation.
Tom Tiffany, a Republican serving in the United States House of Representatives, referred to it as a “tax-and-spending bonanza.”
Representative Mike Gallagher of the Republican Party in the United States House of Representatives accused Democrats of “trying to gaslight the American people into believing that the aim of this bill is to control inflation.”
“The purpose of this bill is to raise taxes on hardworking Americans and spend hundreds of billions of dollars on expanding the Boomer-built bureaucracy,” Gallagher said in a statement.
“This could include anything from doubling the size of the Internal Revenue Service to creating a whole host of progressive, Green New Deal programs.”
This is a monumental error that will have no effect whatsoever on the rate of inflation but will hurt the economy in the long run.
According to the findings of an investigation carried out by the non-partisan Congressional Budget Office, the Inflation Reduction Act will have a “negligible effect on inflation” for the current calendar year.
The Congressional Budget Office (CBO) projected that the bill would have an effect on inflation in the year 2023 that would be “between 0.1 percentage point lower and 0.1 percentage point greater” than the effect of the existing legislation.
According to the findings of yet another study, the Penn Wharton Budget Model, the law is expected to cut deficits by a total of $264 billion over the following decade while also having a “very minor influence” on inflation over the same period.
The Penn Wharton analysis predicted that the national debt will decrease by 4.1% by the year 2040.
Biden and other proponents of the plan have pointed to a letter that was sent on August 2 by 126 economists in the United States (including numerous Nobel laureates and previous government officials) supporting the adoption of the law.
“This landmark legislation includes significant investments in the nation’s tax system, health care, and the energy sector.
The authors of the study on economics wrote that “these investments will fight inflation and decrease prices for American people while simultaneously establishing the framework for strong, stable, and broadly shared long-term economic growth.”
While Republicans continue to criticize Democrats for the country’s record-high inflation rate, Democrats have been praising the enactment of the bill.
The chair of the Democratic Party of Wisconsin, Ben Wikler, even called it a “gamechanger for Wisconsin households.”
As a result of the rising prices, Joe Biden’s approval rating has taken a hit, and a report that aired on CNN on Sunday stated that advisors to Governor Tony Evers asked President Obama not to visit Wisconsin at the end of the previous month.
A spokesperson for Evers declined to comment on the report to the Cap Times, but they did say that the governor is “always happy to welcome President Biden to Wisconsin.”
According to a report by CNN, Joe Biden’s approval ratings have started to increase as a result of falling gas prices and the ability of his administration to claim more policy victories, such as the IRA and the Bipartisan Infrastructure Act.
Pocan, who recently told reporters that he would be “happy to campaign with (Biden) anytime,” stated that he anticipates the president’s numbers to continue to increase.
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As of Tuesday morning, a calculation done by FiveThirtyEight using many polls to determine Biden’s approval rating placed it at 40.2%.
Pocan attributed Biden’s drop in popularity to a “general unhappiness” with the direction the country has taken since the COVID-19 outbreak ended.
“Reopening all at once… has produced global supply chain challenges that we still experience every day in businesses across the district,” he added.
“We still feel these issues across the district.” “However, if you take a closer look at the things that (Biden has) accomplished, you’ll find that they’re quite significant. And I believe you are going to start observing a shift in that tide.”
The most recent measurement of Biden’s approval rating among Wisconsin voters came from a poll conducted by the Marquette University Law School and published in June; at that time, it was 40%. On Wednesday, a fresh survey will be made available for public consumption.
