CBS report: Inflation Reduction Act may not actually reduce inflation
Report finds legislation's ability to curb inflation would be 'statistically indistinguishable from zero'
{{#rendered}} {{/rendered}}Despite its name, the Inflation Reduction Act likely won't reduce near-term inflation, according to a new MoneyWatch report from CBS News.
Citing the opinion of University of Pennsylvania economists and data scientists behind the Penn Wharton Budget Model, the legislation’s likely impact on inflation is "statistically indistinguishable from zero." The sprawling, Democratic-passed bill tackles climate issues, health care, energy and tax enforcement, and President Biden will sign it into law this week.
The report notes the group is not alone in their conclusion, with the Congressional Budget Office also concluding last week that the $739 billion bill would have a "negligible" impact on inflation over the next two years.
{{#rendered}} {{/rendered}}Despite this admission, the Penn Wharton analysis highlighted by CBS News’ Aimee Picchi claimed the Inflation Reduction Act could prove beneficial in the long term.
PELOSI SAYS GOP VOTES AGAINST INFLATION REDUCTION ACT WERE AGAINST 'MOTHER EARTH'
President Joe Biden delivers remarks on the Inflation Reduction Act at the White House on July 28, 2022. (Anna Moneymaker/Getty Images)
"In the long run, the Inflation Reduction Act leads to lower government debt, higher wages, higher total factor productivity and higher GDP," the group said.
{{#rendered}} {{/rendered}}The CBS report, alongside the opinions of Penn Wharton and the Congressional Budget Model, come as Democrats have touted the bill as one of their top legislative achievements. But even Sen. Bernie Sanders, I-Vt., said the bill "will in fact have a minimal impact on inflation." Record inflation over the past year has put a strain on American budgets with price spikes on everything from groceries to housing.
"Even if the Inflation Reduction Act won't immediately lower inflation, the bill could have plenty of other impacts, from reducing government deficits to increasing the tax burden on wealthy Americans, businesses and shareholders," the CBS report read.
{{#rendered}} {{/rendered}}Senate Majority Leader Chuck Schumer speaks at a press conference at the U.S. Capitol on Aug. 5, 2022. (Kevin Dietsch/Getty Images)
The White House recently touted a letter signed by more than 120 economists, some of them Nobel Prize winners, that claimed the bill would put "downward pressure" on inflation in the long term by reducing the government budget deficit by $300 billion over the next 10 years.
Speaking with Fox News Digital, House Democratic Conference Chair Hakeem Jeffries, D-N.Y., Rep. Jamaal Bowman, D-N.Y., Rep. Mark Takano, D-Calif., Rep. Jamie Raskin, D-Md., and Rep. Debbie Dingell, D-Mich., did not directly identity how the Inflation Reduction Act would curb inflation but said it would provide Americans relief by reducing the costs of drugs, affordable care, energy costs and the price of gasoline.
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{{#rendered}} {{/rendered}}The bill would raise more than $700 billion in tax revenue. The country’s wealthiest 0.1% of citizens would carry 26% of the tax burden, while the lowest 20% would only carry 0.4%.
Fox News' Tyler Olson contributed to this report.