The Washington Post in a run-down Aug. 18 makes clear that the Act Sen. Joe Manchin (D-WV) was suckered into supporting, or pushed into supporting by West Virginia labor unions, has no intent to reduce inflation at all. Rather, its intent is to reduce the price of green investments and purchases for businesses and households well-off enough to purchase them.
The so-called Inflation Reduction Act will subsidize those households’ purchases of solar panels, new heat pumps, electric water heaters and stoves, and electric vehicles. It promises “faster tax refunds” by authorizing $80 billion more funding for the IRS over 10 years—this will also mean “faster tax audits,” faster delinquent tax collection, etc. Five years from now this Act will allow Medicare to negotiate bulk prices for a few (10) prescription drugs. Overall, “it’s unlikely the Inflation Reduction Act will reduce inflation,” observes the Post article. “An analysis by the U. of Penn’s Penn Wharton Budget Model” says “there’s a chance the legislation could eventually tamp down prices by about 0.1 percentage points in about five years.” [!]
As for what Senator Manchin got, some have noted that as Biden was introduced by Chuck Schumer on Aug. 16 at the signing, the President removed the mask he was wearing because of his wife’s current case of COVID, and coughed into his right hand. Eleven minutes later, while seated at the signing desk, he did so again. And then one minute after that, with the Act signed, Biden reached out to offer Manchin the pen and shake his hand—and after a bit, all the others gathered around the desk as well.
Otherwise, this Act has some favorable tax treatment for fossil fuel investment (i.e., in West Virginia).
