Senator Bernie Sanders (I-VT) slammed the Inflation Reduction Act (IRA) negotiated by Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV), in part because of a recent nonpartisan report that revealed the bill would do very little to actually reduce inflation.
Saturday evening, Vice President Kamala Harris rushed to the Senate to cast the tie-breaking vote 51 – 50 to move the bill for debate before considering amendments. Despite voting in support of advancing the climate change and government spending bill, Sanders immediately voiced his concerns about the legislation.
“I want to take a moment to say a few words about the so-called Inflation Reduction Act that we are debating this evening,” Sanders said on Saturday. “I say so-called because according to the [Congressional Budget Office] and other economic organizations that have studied this bill, it will in fact have a minimal impact on inflation.”
In a letter sent responding to Senator Lindsey Graham (R-SC), the nonpartisan Congressional Budget Office (CBO) reported that the bill would barely make a dent in surging prices over the next year and half.
“In calendar year 2022, enacting the bill would have a negligible effect on inflation, in CBO’s assessment,” the CBO claimed. “In calendar year 2023, inflation would probably be between 0.1 percentage point lower and 0.1 percentage point higher under the bill than it would be under current law, CBO estimates.”
In reaction, Graham blasted the Democrats for their “tax and spend proposal.”
“Democratic statements about the proposal are quite frankly wrong and misleading,” Graham said.
Graham also noted that the Inflation Reduction Act — which cost taxpayers more than $700 billion — benefits wealthy families with government subsidies while hurting the economy.
“Further, CBO indicates that the Obamacare subsidies can go to a family of four earning $304,000 a year. This is, by any reasonable definition, people who are doing well and not in need of subsidies from the government,” he added. “Also, CBO confirmed my suspicion that the way the 15 percent corporate minimum tax is constructed would hurt economic growth.”
The CBO also reported that the IRA’s “proposed new corporate minimum tax would reduce the incentive for those large corporations to invest, primarily by limiting the tax benefit of accelerated depreciation and by decreasing the after-tax return on their new investment.”
“So what have we learned today from CBO? The bill does not lower inflation, it hurts economic growth and the Obamacare subsidies are absurd,” Graham remarked.
The CBO also reported that a key provision of the bill that bans pharmaceutical manufacturers from raising the prices of drugs higher than the rate of inflation would actually increase the cost of new drugs.
“The Congressional Budget Office projects that the inflation-rebate and negotiation provisions would increase the launch prices for drugs that are not yet on the market relative to what such prices would be otherwise,” the CBO explained.
Sanders also claimed that his colleagues must focus on “the major crises facing working families.”
“If we cannot do that, not only will people continue to hurt and suffer, but to my mind, it is questionable how long we will remain a democracy,” he said on Saturday.
It is likely that the final version of the bill will be slightly different after debate as senators like Sanders attempt to add preferred amendments to the bill.