President Biden is celebrating the one-year anniversary of his Inflation Reduction Act by highlighting its role in fueling economic growth, rather than its initial purpose of addressing high consumer prices.
Biden and his administration officials are traveling across the country to commemorate the one-year-old law, emphasizing its job creation and clean energy benefits. During a visit to Wisconsin, a key swing state, Biden spoke about the law and will do so again at a White House event on Wednesday.
Referring to it as “the single largest investment anywhere in the world” to combat climate change, Biden expressed confidence that the law’s energy investments would create numerous clean energy jobs nationwide, including the construction of electric vehicle charging stations.
“That’s real jobs. That’s real money,” Biden said in reference to the investments made as a result of the $700 billion legislation.
However, despite Biden’s positive outlook, he has distanced himself from previous claims that the Inflation Reduction Act would effectively reduce high prices.
This is because inflation continues to be a concern, and prices are not expected to return to pre-pandemic levels in the near future.
Inflation has slightly declined from its peak at 9.1% last year, reaching 3.2% last month. This figure represents a slight increase compared to June’s 3% inflation rate.
Economists argue that this decline in inflation is not due to the Inflation Reduction Act but rather to other factors such as a decrease in oil and gas prices, which spiked in June last year, and efforts to address supply chain issues that had impacted product supply and raised shipping costs.
Furthermore, economists contend that there is little evidence to support the idea that government spending will effectively reduce inflation.
Speaking at a private campaign fundraiser, Biden admitted that the Inflation Reduction Act does not primarily focus on reducing inflation but instead aims to provide alternatives that promote economic growth and help people meet their basic needs more affordably.
Biden’s current statements sharply contrast with what he repeatedly said last summer while urging Congress to pass the legislation.
Upon its passing, Biden claimed that the Inflation Reduction Act would lower inflation, reduce the deficit, and lower healthcare costs.
It is worth noting that the bill’s impact on inflation aligns with the nonpartisan Congressional Budget Office’s assessment, which indicated that the legislation would have little effect on inflation in 2022 and could either reduce or increase inflation by 0.1% in 2023.