In an abrupt volte-face, West Virginia’s Senator Joe Manchin has reached an agreement with Senate Majority Leader Chuck Schumer (D-NY) on a spending package that they claim will lower health care costs, combat climate change, and reduce the federal deficit. Critics, however, say the proposal is little more than a tax hike on American businesses that will add even more inflationary pressure.
What’s In A Name?
“I now propose and will vote for the Inflation Reduction Act of 2022. Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions,” Manchin said of the late-evening deal.
Indeed, a bill with “inflation reduction” in its very name might set alarm bells ringing for the more fiscally astute. After all, the estimated $433 billion in new spending has to come from somewhere. It seems that the majority of the freshly-printed cash will go to climate change programs and clean energy production, making it the largest such outlay in US history. Also included is a three-year subsidies extension for the Affordable Care Act.
While the administration will tout this as an environmental victory in the lead-up to the November elections, American voters may not be as thrilled. According to a July PBS/NPR/Marist poll, climate change did not make the list of priorities for voters of any party. Topping the survey was, of course, inflation.
A Tax Hike Ahead
To pay for the spending, Manchin and Schumer have agreed to establish a minimum 15% corporate tax, IRS enforcement, and other tax law changes, which they say will raise $739 billion over ten years in revenue. The kicker here being that the difference between the amount spent and the amount raised would be used to pay down the deficit. Opponents of the deal are not so convinced.
Senate Minority Leader Mitch McConnell (R-KY) was quick to lash out at the package, tweeting:
“Democrats have already crushed American families with historic inflation. Now they want to pile on giant tax hikes that will hammer workers and kill many thousands of American jobs. First they killed your family’s budget. Now they want to kill your job too.”
This sentiment was echoed strongly by Sen. Marsha Blackburn (R-TN), who simply wrote, “Build Back Broke is going to bankrupt America.”
Can It Pass?
Democrat leadership will try to pass the bill through reconciliation, meaning they can avoid the Republican filibuster entirely. With the help of Vice President Kamala Harris and her tie-breaking vote in the upper chamber, no bipartisan support is required. However, this razor-thin majority also means that Democrats can’t afford to lose even one member of their caucus.
If it passes, the bill will doubtless be hailed by Team Biden and the media as a significant accomplishment, and a primary reason voters should cast a blue ballot in November. And yet, according to almost every major poll, the issue of climate change does not even register. With inflation running rampant, gas prices still double what they were when Biden took office, a flood of illegal immigration and fentanyl at the porous southern border, and crime infecting every aspect of modern living, it seems Washington, DC, is prepared to fiddle while America burns.
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