A nonpartisan study has found that Democrats’ “Inflation Reduction Act” would do little to nothing to lower consumer prices in the coming years.
Analysis from the Penn Wharton Budget Model, a nonpartisan organization at the University of Pennsylvania’s Wharton School, found that the effect of the Inflation Reduction Act on rising prices would be “statistically indistinguishable from zero.”
“The Act would very slightly increase inflation until 2024 and decrease inflation thereafter,” the study found. “These point estimates are statistically indistinguishable from zero, thereby indicating low confidence that the legislation will have any impact on inflation.”
The Wharton School study also indicated that the Democrat-backed legislation would have “no impact” on the country’s gross domestic product (GDP) by 2031, and only a slim 0.2% GDP increase by 2050 — nearly three decades after the possible enactment of the bill.
Since the $433 billion spending bill was introduced last Wednesday, Democrats have promised that the legislation would provide Americans quick relief from the worst effects of inflation, which in June reached a four-decade high of 9.1%.
During a press conference, President Joe Biden claimed the bill would not only lower inflation, but would reduce the budget deficit and Americans’ healthcare costs as well.
“This bill will, in fact, reduce inflationary pressure on the economy,” Biden said on Thursday.
“And the fact is that my message to Congress is this: This is the strongest bill you can pass to lower inflation, cut the deficit, reduce healthcare costs, tackle the climate crisis and promote energy security, all the time while reducing the burdens facing working-class and middle-class families,” the president added.
Republicans, meanwhile, have pushed back against the the idea of enacting another multi-billion dollar package to fight inflation. In a statement, Senate Minority Leader Mitch McConnell (R-KY) argued the legislation would do the opposite of what the bill’s proponents claim it will do.
“Apparently, our Democratic colleagues do not want to be responsible for just skyrocketing prices alone,” McConnell said Thursday. “They want Americans to be faced with skyrocketing prices and higher taxes and fewer jobs, all at the same time.”