President Joe Biden acknowledged on Thursday that the $700 billion Inflation Reduction Act was misnamed, as it has not had a significant impact on reducing inflation. Instead, the legislation has been touted as a major step forward in addressing climate change.
Speaking at an event in Westby, Wisconsin, Biden referred to the bill as “the most significant climate change law ever” and noted that its name was misleading. He admitted that the bill’s title should have reflected its true purpose, which is to invest in green energy initiatives to the tune of $369 billion.
Despite its name, the Inflation Reduction Act has been criticized for its potential to exacerbate inflation. The Penn Wharton Budget Model estimated that the bill would only reduce inflation by 0.1 percent over five years, while the Congressional Budget Office’s analysis was similarly underwhelming.
The legislation, which was signed into law last year, was hailed by the Biden-Harris administration as a major achievement in the fight against climate change. However, financial experts have been less enthusiastic, pointing out that the bill’s spending could actually contribute to higher inflation.
BlackRock CEO Larry Fink, for example, has expressed skepticism that inflation can be brought down to 2 percent, citing the massive spending packages passed by the Biden administration and the Democrat-led 117th Congress. “We have restructured how we frame our economic policy,” Fink said in an appearance on CNBC. “We have a trillion dollars of fiscal stimulus in the CHIPS Act, the Infrastructure Act, and the Inflation Reduction Act.”
The Consumer Price Index has continued to climb, rising 2.9 percent year-over-year in July. Critics of the bill, including former National Economic Council Director Larry Kudlow, have argued that it lacks any meaningful incentives for economic growth. “There is not one single iota, scintilla, whit, shred or morsel of economic growth incentives in this bill,” Kudlow said last year.
