Is the Inflation Reduction Act a win for the Democrats?
The law is designed to reduce not only inflation but also carbon emissions and prescription drug costs
The passing by the Senate of a $750bn bill to tackle climate change, healthcare issues and soaring inflation is being heralded as a major victory for Joe Biden’s party ahead of the November mid-term elections.
The Democrat-endorsed Inflation Reduction Act represents “the largest climate investment in US history”, said CNN. The “sweeping” package is also designed to cut prescription drugs and to tackle soaring inflation by reducing the federal deficit by $300bn.
The product of “painstaking” negotiations, the act is expected to pass in the House of Representatives on Friday, the broadcaster added – and gives the Democrats the chance to “achieve major policy objectives ahead of the upcoming midterm elections”.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
What would the act deliver?
Democrats have argued that the act “will tackle voters’ main economic concern”, but Republicans insist the new spending will simply “aggravate inflation”, said NPR.
The non-partisan Congressional Budget Office has said the bill would have a “negligible” effect on inflation in 2022 and into 2023.
The bill would also allow the federal health secretary “to negotiate prescription drug prices with pharmaceutical companies”, said The Guardian. Insulin prices for Medicare patients would be capped at $35 a dose and expiring healthcare subsidies would be extended for three years.
But the planned measures won’t “impact every prescription drug or every patient”, said NPR, and “won’t take effect quickly”, starting with ten drugs covered by Medicare from 2026 and expanding to 20 drugs by 2029.
While the bill’s likely impact on inflation and healthcare problems are a matter of debate, plans to invest $370bn in clean energy and climate package mark the “biggest victory for the environmental movement since the landmark Clean Air Act”, according to CNN. Experts have estimated that the bill’s provisions will reduce US carbon emissions by up to 40% by 2030.
A domestic win for Biden?
Overall, the bill “is a very scaled-down” version of a $3.5trn proposal put forward by Biden and his party last year, said NPR.
But the bill still “delivers a much-needed domestic win” for Biden at a time when his “popularity has sunk”, said The Guardian. He “can now go to the polls and portray himself as a president able to get things done even in the difficult political circumstances of a deeply divided country”.
The hotly debated economic impact of the bill, and how that plays out with voters, remains to be seen though.
Tackling healthcare costs and boosting green energy may a “priority”, but it seems “disingenuous to claim that what makes up this bill will have a deflationary impact”, wrote Kate Andrews, The Spectator’s economics editor, in The Daily Telegraph. The “handouts” included are likely to “fuel inflation”, and “other aspects of the bill will work against economic growth”, she argued.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
5 high-caliber cartoons about Kristi Noem shooting her puppy
Cartoons Artists take on the rainbow bridge, a farm upstate, and more
By The Week US Published
-
The Week Unwrapped: Why is the world running low on blood?
Podcast Scientists believe universal donor blood is within reach – plus, the row over an immersive D-Day simulation, and an Ozempic faux pas
By The Week Staff Published
-
Rishi Sunak's asylum spat with Ireland explained
In Depth Irish government plans to override court ruling that the UK is unsafe for asylum seekers
By The Week UK Published
-
8 looming climate tipping points that imperil our planet
The Explainer New reports detail the thresholds we may be close to crossing
By Devika Rao, The Week US Published
-
Costa Rica's renewable energy success could be under threat
Under the radar Central American nation generates nearly all its electricity from renewable sources but climate change is bringing huge challenges
By Harriet Marsden, The Week UK Published
-
What is cloud seeding and did it cause Dubai's severe rainfall?
The Explainer The future is flooded
By Devika Rao, The Week US Published
-
Ottawa climate talks: can global plastic problem be solved?
In the spotlight Nations aim to draft world's first treaty on plastic pollution, but resistance from oil- and gas-producing countries could limit scope
By Harriet Marsden, The Week UK Published
-
What is rock flour and how can it help to fight climate change?
The Explainer Glacier dust to the rescue
By Devika Rao, The Week US Published
-
Arid Gulf states hit with year's worth of rain
Speed Read The historic flooding in Dubai is tied to climate change
By Peter Weber, The Week US Published
-
The growing thirst for camel milk
Under the radar Climate change and health-conscious consumers are pushing demand for nutrient-rich product – and the growth of industrialised farming
By Harriet Marsden, The Week UK Published
-
Why curbing methane emissions is tricky in fight against climate change
The Explainer Tackling the second most significant contributor to global warming could have an immediate impact
By Richard Windsor, The Week UK Published