In the months since the Inflation Reduction Act was passed by Congress it has not fixed America's inflation problems
Steve Forbes: Call it the 'Bad for the Economy' act
Forbes Media chairman Steve Forbes discusses how President Biden is regretting the name ‘Inflation Reduction Act’ on ‘Your World.’
It has been one year since Joe Biden and Congressional Democrats passed their signature Inflation Reduction Act (IRA) – a disastrous law that did nothing to address inflation and is now confirmed to have added hundreds of billions to the deficit.
President Biden himself, in a recent, rare moment of candor, even said he wishes he had named the IRA something different since it "has less to do with reducing inflation."
Nevertheless, working families are paying the price for that law while the wealthy and well-connected continue to reap its benefits. As hard-earned taxpayer dollars from the IRA go into the pockets of billion-dollar corporations and big banks, inflation continues to steal from workers’ paychecks.
One year in, it is clear that what is needed today is relief for the working class and Main Street businesses – something the IRA will never provide.
BIDEN ADMITS INFLATION REDUCTION ACT HAD 'LESS TO DO WITH REDUCING INFLATION' THAN HE ORIGINALLY SAID
The so-called "green" special interest tax breaks passed in the IRA are now estimated by the Joint Committee on Taxation (JCT) to cost over $650 billion, 240% higher than originally projected.
This money will flow primarily to big business and Wall Street. JCT has confirmed that 90 percent of these tax credits go to pad the pockets of large corporations with sales of a billion dollars or more.
As a matter of fact, Democrats rewrote the rules of these credits to make them more easily transferred to the wealthy. Financial institutions will take in three times as much of these tax benefits as any other industry. So, while the president talks big about the wealthy "paying their fair share," his policies pay for the lifestyles of the wealthy and well-connected.
To make matters worse, the Biden administration’s implementation of these tax credits fails to secure our supply chains for critical minerals and sends taxpayer dollars to adversarial nations like China. For example, the electric vehicle credit will not only cost 7 times as much as Democrats originally claimed but will also require that less critical mineral and battery components be sourced and made in America.
MANCHIN BACKTRACKS, DOWNPLAYS INVOLVEMENT IN INFLATION REDUCTION ACT AFTER CLAIMING HE 'WROTE' IT
This means there will be no reshoring of our critical supply chains from this law. Additionally, the Brookings Institution confirmed that 73 percent of electric vehicle (EV) owners covered by the IRA’s $7,500 EV tax credit would have purchased those vehicles anyway.
At the same time, American companies who are cashing in on these credits are also funneling tax dollars to foreign countries like China. Ford, for example, is using the IRA’s special interest tax credits to hire Chinese workers at a Michigan plant as part of its newly announced partnership with a Chinese company that is clearly under the influence of the Chinese Communist Party, and which allegedly has a history of using forced labor.
Bottom line: Democrats and President Biden are keeping America dependent on the Chinese Communist Party and willing to look the other way on supposed bipartisan concern for global human rights issues when it comes to their extremist environmental agenda.
The implementation of this law has been so bad even members of the president’s own party have called him out, with Sen. Joe Manchin, D-W.Va., the architect of the IRA, calling it a "betrayal." These special interest tax breaks will undoubtedly expand China’s dominance over America’s energy and critical supply chains. The United States cannot afford to put the left’s radical green agenda over our national security – much less our entire economy.
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Rather than spending $650 billion in tax subsidies for the wealthy and corporate elite, Congress must look at policies that build upon the American economic renewal resulting from the Tax Cuts and Jobs Act (TCJA).
TCJA delivered tangible results for the working class. Following its passage, the lowest earners saw the greatest benefit, with their wages increasing at a 50 percent higher rate than those with higher incomes. Those same earners saw their federal tax rate fall to its lowest level in 40 years as people making less than $100,000 a year received on average a 16 percent tax cut. Unfortunately, the president remains dead set on drowning the middle class in higher prices at the grocery store and gas pump.
At the same time, he is targeting American energy producers with higher taxes, he insists, contrary to all evidence, that workers and families are actually benefiting from his failed economic agenda – the same agenda that has produced the highest spike in prices and the largest increase in interest rates in a generation.
For the entirety of President Biden’s first two years in office, inflation outpaced wage growth. Prior to his presidency, that had happened for only two months in the previous nine years. While Americans struggle with high prices and watch their retirement savings shrink, the Biden administration has been doing backflips to spin the data – proudly branding their agenda of handouts to the wealthy and well-connected as "Bidenomics."
Ironically, the president’s namesake agenda is entirely divorced from the study of economics and doubles down on its worst elements. Moreover, it disrespects American taxpayers struggling to makes ends meet and provide for their families by funneling their hard-earned dollars into the pockets of the wealthy, Wall Street, large corporations, and the Chinese Communist Party.
Maybe President Biden should spend less time talking about economics and more time studying it before taxpayers see even more of their money flow to the rich and politically connected.
Republican Jason Smith represents Missouri's 8th Congressional District and is Chairman of the House Ways and Means Committee.
