White House abides by Cut Inflation Act after CBO warns inflation won’t drop as a result

The White House is defending the Inflation Reduction Act against a nonpartisan Congressional Budget Office report that suggests the legislation will not significantly reduce inflation in coming years.

“Could you respond to the CBO’s new analysis of the Inflation Reduction Act that says it would have almost no or negligible impact on inflation in 2022 and 2023,” the White House press secretary Karine Jean-Pierre during a press briefing on Friday.

Jean-Pierre replied, “You know, leading economists have said that this law on reducing inflation that they have analyzed, which has been examined by these economists, will indeed reduce inflation.

Jean-Pierre was then asked if her answer meant she “rejected” the CBO report and if it was fair to call the legislation the “Inflation Reduction Act” when the CBO says the inflation will not be significantly reduced.

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White House Press Secretary Karine Jean-Pierre speaks during the daily briefing at the White House in Washington, DC (AP Photo/Susan Walsh/AP Newsroom)

“Well, if you think about the Inflation Reduction Act, that will also have an effect on the cost of drugs,” she explained. “Lowering pharmaceutical cost prices, which is going to make a big difference for seniors and families.”

Jean-Pierre went on to say that the legislation will reduce energy costs, the cost of utility bills and health insurance, while injecting $300 billion to reduce the deficit.

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Food price inflation

A man shops at a Safeway grocery store in Annapolis, Maryland. (Jin Watson/AFP via Getty Images/Getty Images)

“It will make a difference,” said Jean-Pierre. “It’s going to fight inflation, so it should be called the Inflation Reduction Act, because that’s exactly what it’s going to do.”

Jean-Pierre was reacting this week to a CBO report that the bill would have a “negligible” effect on inflation.

“In calendar year 2022, passage of the bill would have a negligible effect on inflation, according to the CBO’s assessment,” the bureau said. In calendar year 2023, inflation would likely be between 0.1 percentage point lower and 0.1 percentage point higher under the bill than it would be under the current law, estimates the CBO.

Jean-Pierre’s defense of the legislation comes the same day that Senate Majority Leader Chuck Schumer, DN.Y., said a group of 230 economists who warn that the legislation will increase inflation have ” wrong “.

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“They’re wrong…I don’t know who that list was…it’s as simple as the nose on your face,” Schumer told reporters.

The economists wrote in the letter that the US economy is at a “dangerous crossroads” and that the misnamed “Inflation Reduction Act of 2022” would do no such thing and instead perpetuate the same fiscal policy mistakes that helped precipitate the current worrisome economic climate. »

U.S. job growth unexpectedly accelerated in July, defying fears of a slowdown in hiring even as the labor market faces the twin threats of inflation and rising interest rates.

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