Biden admits ‘I wish I hadn’t called’ spending bill Inflation Reduction Act
WASHINGTON — President Biden said at a fundraiser Thursday that he regrets calling one of his major legislative achievements the Inflation Reduction Act — because the primary goal was environmental spending and not to lower prices.
“The Inflation Reduction Act — I wish I hadn’t called it that, because it has less to do with reducing inflation than it does to do with dealing with providing for alternatives that generate economic growth,” Biden said in Park City, Utah.
Biden signed the law in August of last year, allowing the White House and congressional Democrats to say they were tackling decades-high inflation, which had peaked that June at an annual rate of 9.1% — even though both the Penn Wharton Budget Model and the Tax Foundation said at the time the bill would do nothing of the kind.
“Republicans were right all along,” tweeted Rep. Andy Biggs (R-Ariz.) in response to Biden’s comment.
A source told The Post that the legislation’s politically expedient name was “coined” by Democratic senators during a lunch as a way to sell stalled components of Biden’s proposed Build Back Better Act, though the president had no objections at the time and initially embraced the framing.
Inflation continues to be elevated, with the annual rate in July at 3.2% — up slightly from 3% in June, but down from 6.4% in January.
The Federal Reserve targets an annual inflation rate of around 2%.
So-called core inflation, which measures the price of all items minus food and energy, spiked 4.7% over the previous 12 months — with shelter (7.7% annual increase) the biggest driver.
Biden and Republicans have focused on different causes, with the GOP blaming large government spending bills and the Biden administration’s discouragement of fossil fuels.
The White House, meanwhile, has blamed COVID-19 supply chain issues and the 18-month-old Russian invasion of Ukraine.
The 730-page Inflation Reduction Act committed $369 billion to environmental projects, including grants to renewable energy companies and tax breaks for consumers. The bill also approved $64 billion to extend more generous Obamacare health insurance subsidies and $4 billion to Western wildfire resilience.
The legislation’s spending, at least in theory, was offset by new revenue — unlike Biden’s $1.9 trillion American Rescue Plan Act, which critics said worsened inflation after passing in early 2021.
Both bills had only Democratic support.
The Inflation Reduction Act’s projected revenue offsets include $222 billion over 10 years from a new 15% corporate minimum tax, $124 billion in new IRS revenue through stricter enforcement after an $80 billion investment in staffing, $74 billion from a new 1% stock buyback excise tax and $52 billion by extending a limit on how businesses can use losses to reduce taxes and $265 billion in savings by allowing Medicare to negotiate drug prices.
