The Inflation Reduction Act is Anything But by Marc A. Thiessen

Political Crossfire The Inflation Reduction Act is Anything But

By Marc A. Thiessen

Has an American president ever been more thoroughly dishonest about his major legislative initiatives than Joe Biden?

Biden’s first act as president was to pass, by a Democrats-only vote, a $1.9 trillion “pandemic relief” bill – the vast majority of which, it turned out, had nothing to do with the pandemic’s health aspects. Only 8.5% of the package was for direct Covid-19 containment measures, such as vaccines and testing. It was massive social spending spree disguised as pandemic relief, and it helped set off the worst inflation our country has experienced in four decades.

Biden then tried to follow that with a $2.65 trillion infrastructure bill (a.k.a. the “American Jobs Plan”) which, it turned out, included just $621 billion in spending on actual infrastructure – roads, bridges, and the like. Just as he had used his “pandemic relief” bill as cover to pass all sorts of non-pandemic spending, Biden tried to use “infrastructure” as cover to pass trillions of dollars of left-wing social welfare spending, which he tried to rebrand as “human infrastructure.”

Now he’s doing it again. Democratic leaders have cut a deal with Sen. Joe Manchin III (D-W.Va.) on a $433 billion package of climate spending and tax increases disguised as the Inflation Reduction Act of 2022. The bill would not reduce inflation. The nonpartisan Penn-Wharton budget model estimates it would actually produce “a very small increase in inflation for the first few years, up to 0.05 percent points in 2024” (emphasis added) followed by “a 0.25 percentage point fall… by the late 2020s.” The effect either way, Penn-Wharton says, is “not statistically different than zero,” which means the legislation would not “have any impact on inflation.”

Calling this the Inflation Reduction Act is intentionally misleading. The purpose of the bill is to address climate change, not inflation. A full 85% of the bill’s spending – $369 billion – goes toward climate or clean energy. According to the Wall Street Journal, it would subsidize “wind, solar, critical minerals, biofuels, hydrogen, carbon capture, nuclear, ‘sustainable’ aviation fuel, lithium-ion batteries, electric-vehicle charging stations and more.” It also provides $20 billion in cheap federal loans for automobile manufacturers to build “clean vehicle” factories and removes the cap on $7,500 tax credits for affluent Americans to buy electric vehicles. The New York Times calls it “the most ambitious climate action ever taken by Congress,” while climate activists praised it as the “largest climate investment in American history by far.”

While the bill would not reduce inflation, it would raise tax revenues by $470 billion, adding a new burden on American businesses that are already struggling under the weight of inflation, supply-chain issues, and a historic labor shortage. And it breaks Biden’s promise never to raise taxes on any Americans making less than $400,000 a year. According to the Joint Committee on Taxation, the bill would raise taxes on Americans earning less than $200,000 to the tune of $16.7 billion in 2023 and would generate $14.1 billion from those making between $200,000 and $500,000 a year. Indeed, Biden may be the first president to announce a major tax hike the same week that the economy entered its second straight quarter of negative growth – a traditional definition of recession. As Sen. Lindsey Graham, R-S.C., put it, it makes no sense to pass “a massive tax increase in the name of climate change when our economy is in a recession.”

So why the intentionally deceptive name? Because Democrats know that, while their left-wing base thinks climate change is the most important issue facing the country, just 1% of Americans agree. At a time when inflation is forcing many to choose between staples such as gas and food, the Biden administration is providing taxpayer subsidies to couples making $300,000 a year who can already afford a Tesla. So, calling this legislation what it really is – a climate, tax and spending bill – would not do. Hence the false moniker, which is intended to dupe Americans into believing that the bill is designed to address their biggest concern – inflation – rather than the biggest concern of climate activists.

Biden is not trying to reduce inflation; he is trying to pump up deflated liberal voters, disappointed by his failure to enact their radical climate agenda, before the midterm elections. And he is trying to pull the wool over the eyes of the rest of Americans by cynically wrapping this left-wing climate, tax, and spending monstrosity in the guise of fighting inflation.

Americans are not stupid. They know what he is doing. There have been 10 recessions since World War II, yet Biden is less popular than any of the presidents who led us through them going all the way back to Harry S. Truman. Why is that? Because Americans know that Biden is not only failing at his job but also constantly lying to them. And the only thing Americans hate more than a failing president is a dishonest, failing one.