During an interview with ABC News anchor Jonathan Karl over the weekend, White House Press Secretary Karine Jean-Pierre was questioned on if the Democrats’ so-called “Inflation Reduction Act” would actually reduce inflation.
Karl specifically noted a recent analysis by the Congressional Budget Office (CBO) which said that the “Inflation Reduction Act” would have a “negligible effect on inflation” in 2022, and could even result in inflation being higher in 2023.
“In calendar year 2022, enacting the bill would have a negligible effect on inflation, in CBO’s assessment. 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,” the CBO said.
“Inflation has been a number one priority for this president, lowering costs has been a number one priority for this president,” Jean-Pierre claimed. “If you look…what Democrats in Congress did with this Inflation Reduction Act, the work of this president… you see that anti-inflation bill, you see that it’s going to lower costs for Americans.”
“But let me ask you, it’s called the ‘Inflation Reduction Act,’ but the Congressional Budget Office, which is nonpartisan, said that there would be a negligible impact on inflation this year and barely impact inflation at all next year, isn’t it almost Orwellian?” Karl asked. “How can you call it inflation reduction when the nonpartisan experts say it’s not gonna bring inflation down?”
“I appreciate the question. We’ve actually addressed this with the CBO,” Jean-Pierre continued. “It was the top line number; there’s more in there that shows it will have the money from– remember how we’re doing this, too, it’s making sure that billionaires in corporate America are paying their fair share, making sure that the tax code is a little bit more fair, and so when you do that, put it in its totality, you will see that it will bring down, lower the deficit, which will help fight inflation.”
“Look, here’s the thing,” she added. “We have 126 economists, both Republicans, both Democrats who have said it’s going to fight inflation, five former secretaries of treasury–”
“So you disagree with the assessment of the CBO?” Karl pressed.
“Well, there’s more to it than that,” Jean-Pierre replied. “It was just the way that Republicans did that was so that [they] could make an argument that is false. It is going to fight inflation, it has been proven and said by economists across the board, on the Republican side and the Democrat side.”
While Jean-Pierre claims the Biden administration was able to find 126 economists that said the “Inflation Reduction Act” would “help fight inflation,” a group of 230 economists recently sent a letter to congressional leaders of both parties saying that the “Inflation Reduction Act” will actually increase inflation.
In the letter, the economists conclude that the “inaptly named bill” would “create immediate inflationary pressures by boosting demand, while the supply-side tax hikes would constrain supply by discouraging investment and draining the private sector of much-needed resources.”
Among the 230 economists who wrote the letter were former President of the Federal Reserve Board Robert Heller, former Directors of the Office of Management and Budget Jim Miller and Robert Heller, Nobel laureate Vernon Smith, former Chair of the Council of Economic Advisers Kevin Hassett, along with professors from the University of Chicago, Princeton, Duke, Columbia and Notre Dame, and others.