CNN anchor Kate Bolduan pressed White House Council of Economic Advisors Dr. Cecilia Rouse Tuesday regarding the Inflation Reduction Act’s impact on inflation.
President Joe Biden is expected to sign the $740 billion Inflation Reduction Act, a reconciliation spending package introduced by Democratic Sens. Chuck Schumer of New York and Joe Manchin of West Virginia. Bolduan asked Rouse on CNN’s “At This Hour” if the legislation will truly reduce inflation, following the Congressional Budget Office’s recent estimate that the bill will have a “negligible impact on inflation.”
“Cecilia, Democrats titled this bill ‘the Inflation Reduction Act’ which begs voters to hold you all accountable to that,” Bolduan said. The Congressional Budget Office, the non-partisan scoring organization for legislation, says that the bill would have a negligible impact on inflation this year and next. Are you personally comfortable, as an economist, calling it the Inflation Reduction Act?”
Rouse, not directly answering the question, said the bill “represents really important investments” to improve the nation’s “economic capacity” by targeting the issue of “too much demand for the supply” by giving more investment in “supply support” to combat inflation. (RELATED: ‘Do You Just Want To Laugh Out Loud?’: CNBC’s Kernen Mocks The Inflation Reduction Act)
“But if you passed a bill called the ‘Fill Every Pothole Act,’ voters should expect you to fill every pothole,” Bolduan added. “So should voters measure the success of this bill on how much you reduce inflation in the next couple of years?”
“This is really an investment in our economy,” Rouse replied. “It represents the president’s economic vision for transitioning into an economy that works better for American families by generating the kind of growth that’s based on stable, steady productivity gains in the language of economists.”
“A name is just a name, but they’re definitely a lot of other names you could’ve named this bill,” Bolduan concluded.
A University of Pennsylvania Wharton budget model said the legislation would only cut deficits by $248 billion and have little impact on inflation. The Congressional Joint Committee on Taxation (JRC) indicated that the bill will raise taxes on those making less than $400,000 a year, despite claims by Democrats that taxes would not increase on those income brackets.
The bill includes a minimum tax of 15% for corporations making $1 billion in profit per year, and subsidizes energy and healthcare costs for consumers. The Congressional Budget Office has also warned that the bill would allow the president to “supercharge” the Internal Revenue Service against low-income and middle class families.