The Sconi

Critics of the $750 billion “Inflation Reduction Act of 2022” are warning that the bill ushered through by Democrats doesn’t come close to matching what it claims to be.

"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 posted on Twitter of the bill that has support from every Senate Democrat including U.S. Senate candidate Mandela Barnes of Wisconsin.

The nonpartisan Congressional Budget Office, the Committee for a Responsible Federal Budget, and the Penn Wharton Budget Model are among the growing list of other experts now sounding the alarm about the legislation, noting that it figures to have minimal influence on inflation rates, which were at an annual level of 8.5% in July; a recent Bloomberg report said.

Even as some have quickly moved to brand the legislation—which was signed into law by President Joe Biden earlier this month—as a landmark tax, climate and health-care bill, others are growing louder in their opposition.

“The aggregate demand impulse is trivial,” Michael Feroli, JPMorgan’s chief US economist, wrote in a recent note, quoted by Bloomberg. “Moreover, we believe the drug-pricing provisions will have little near-term impact on the CPI [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.

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

The Inflation Reduction Act narrowly passed the Senate in a 51-50 vote, with all 50 Democratic senators supporting the bill and all 50 Republican senators voting to reject the measure. Vice President Kamala Harris cast the tie-breaking vote.

Barnes has gone on record with his support for the bill, prompting a strong response from Republican Party of Wisconsin Rapid Response Director Mike Marinella.

“Within days of being anointed the Democrat nominee U.S. Senate in Wisconsin, Mandela Barnes is already revealing himself to be just another tax and spend politician dead set on sticking low- and middle-income earners with the bill for another liberal wish list,” Marinella said in a WisPolitics.com press release.

Over the next decade, the Inflation Reduction Act will support $430 billion in government spending on energy, electric vehicle credits and health insurance grants; with estimates also suggesting that under the legislation $739 billion of revenue would be raised from tax increases over that same time period; a recent National Law Review report said.