Smith Op-Ed: The Inflation Reduction Act Will Prolong & Make Worse Biden’s Inflation Crisis
By Rep. Jason Smith
Under President Biden’s failed leadership, America is facing higher prices, rising interest rates, a labor shortage, spiraling debt, and now a recession. Family budgets are strained by inflation that has risen 13.7% since Joe Biden became President, while seniors’ retirement accounts shrink.
Americans – facing higher prices and diminishing returns – are rightfully frustrated to see their concerns ignored by one-party Democrat rule in Washington. The latest example is the so called “Inflation Reduction Act” which was recently signed into law by President Biden. The bill, passed entirely by Democrats in Congress, spends $745 billion during the worst inflation crisis in 40 years – an inflation crisis brought on by reckless spending coming out of Washington. It layers on $599 billion in taxes and budget gimmicks during a recession – an idea that Democrat Senators Chuck Schumer and Joe Manchin, who wrote the bill, once said you should never do. It also adds $146 billion to the debt. Even assuming the expiration of policies in the bill are realized, eighty percent of the supposed savings in the bill will not show up until after the year 2029, and $54 billion would be added to the debt in just the first five years.
The bill paints a target on the back of working families by giving the Internal Revenue Service (IRS) another $80 billion to hire 87,000 new agents. The IRS will now be able to conduct over 700,000 more audits per year on families making less than $75,000, 1 million more audits per year on families making less than $200,000. Despite Democrats’ claims that their intention is to go after the super wealthy, the Congressional Budget Office – the official budgetary arm of Congress – has confirmed that at least $20 billion of the savings Democrats are trying to claim from their IRS enforcement scheme will come from additional audits on Americans making less than $400,000 per year. Other experts say the number could be even higher. When tax season rolls around next spring, more Americans will live with the fear that an honest mistake will mean an IRS agent harassing them with an audit. America’s billionaire-class and corporations will continue to hide behind high-paid lawyers.
Democrats are targeting the middle-class while providing giveaways to the wealthy and big corporations with over $400 billion in Green New Deal policies. More than half of the spending in the Inflation Reduction Act goes to “green” benefits for the wealthy – like $7.5 billion for new luxury electric vehicles or $362 million for big corporations to make their buildings “greener.” While the EPA gets $27 billion for a “climate bank” slush fund, American oil and gas producers will get hit with $12 billion in new taxes so American families have to continue paying high prices at the pump.
But the focus on the wealthy does not stop there. The Inflation Reduction Act makes taxpayer-funded Obamacare subsidies available to families making over $300,000, and the prescription drug price controls included in the plan will – according to the Congressional Budget Office – increase the cost of new drugs, while simultaneously preventing new cures from coming to market. With the way that policy will also stifle generic drug competition, it will increasingly become only the wealthy who can afford innovative cures and medications.
Washington Democrats seem to think that naming their bill the “Inflation Reduction Act” is all that is needed to bring down prices. But just like the $2 trillion “American Rescue Plan” did nothing to “rescue” America – in fact, it sparked the worst inflation crisis in a generation and drove the country into recession – the Inflation Reduction Act will prolong and make worse the current inflation crisis.
When the Congressional Budget Office and over 230 economists took a look at what comes after the title of this bill, they found that this tax and spending package will do nothing to address inflation and will actually make it worse. Americans, who are already paying $5,900 more this year to provide for their families and just make ends meet because of Biden’s inflation crisis, whose real wages are already down 4.5 percent, will have to stretch their paychecks even further.
Adding insult to injury, half of the new taxes in this bill will be paid by families making less than $400,000, with over $10 billion in tax increases falling on families making less than $200,000 – this after President Biden has repeatedly promised never to raise taxes on such families.
During a supply chain crisis, the last thing Congress should be doing is crippling American businesses. But the Inflation Reduction Act does just that with a new “book” tax that falls heavily on U.S. manufacturing. Families will pay that tax too through higher prices and the pink slips they receive when factories move overseas.
The reckless tax and spending policies of Washington Democrats have thrown America’s economy into recession. The Inflation Reduction Act will prolong today’s inflation crisis and make it worse. Working-class Americans cannot afford it and should not have to live with it. Instead, Congress should be focused on making it easier for folks in this country to provide for themselves and their families.
Read the full op-ed here.