5 billion Inflation Reduction Act would lower food prices

$485 billion Inflation Reduction Act would lower food prices

The $485 billion Inflation Reduction Act, which President Joe Biden will sign into law later this week, would provide Americans with relief from the growing cost of food and other essentials.

However, Republicans and even some Democrats are criticising the sizable spending measure because they believe it would do nothing to stop record inflation rates.

As we approach the midterm elections in November, rising costs for everything from groceries to petrol likely to be a key campaign topic for both parties. In a recent survey, 40% of Americans ranked reducing inflation as their top concern for the government. In June, the annual inflation rate increased sharply to 9.1%, a 40-year high.

Families of the Catholic faith are among those who are suffering.

According to a July study by EWTN/RealClear Opinion Research, the majority of Catholics (57%) believe that Biden will be unable to considerably reduce inflation over the next year despite the fact that over 90% of Catholics claim that inflation has had a significant effect on their finances.

The government’s initiatives to address the issue are broken down below for Catholic families concerned about the growing expense of living.

The success of the Inflation Reduction Act

According to the Biden administration, the plan will lower inflation by allocating $485 billion to fiscal policies that encourage economic development by providing tax relief and funding for healthcare, energy, and environmental initiatives.

Significant health policy changes made under the law include the expansion of Obamacare, free immunizations for seniors, and enabling Medicare to haggle over the price of prescription drugs.

The measure also allots $124 billion for increased tax enforcement by the Internal Revenue Service.

According to Senate Democrats, the action would guarantee that “rich millionaires and billionaires” contribute fairly.

Republicans disagree; according to a statement from the House Freedom Caucus, the idea would result in “an army of 87,000 additional enforcement officers.” “targeting U.S. citizens.

The law would “cut the cost of prescription pharmaceuticals, health insurance, and daily energy expenses, and decrease the deficit while demanding the richest businesses finally pay their fair share,” according to a statement released by Biden on Sunday.

It “pays for all this by creating a minimum corporate tax so that our largest firms start to pay their fair part,” Biden said, adding, “It does not increase taxes on people earning under $400,000 a year – not one penny.”

In order to increase employment and lessen environmental harm, Biden’s economic plan “offers government investments and incentives for domestic production, combined with social assistance to draw more people into the job market,” according to Bloomberg.

But opponents of the bill are raising concerns about its alleged shortcomings.

Sen. Bernie Sanders of Vermont, a Democrat, is one of the legislation’s most outspoken opponents. In a speech on the Senate floor on Saturday, he referred to the measure as “the so-called Inflation Reduction Act.”

Sanders said that the plan “would, in reality, have a limited effect on inflation” citing studies by the Congressional Budget Office and other economic groups.

Sen. Joe Manchin of West Virginia, a Democrat, often consults the Penn Wharton Budget Model when evaluating legislation, and it predicts that the bill’s effect on inflation would be “statistically indistinguishable from zero.”

According to the research, the measure will “slightly boost inflation until 2024 and reduce inflation afterwards,” which “indicates little confidence that the legislation would have any influence on inflation.”

The plan is supported by Moody’s Analytics Chief Economist Mark Zandi, who claims it would “lean against inflation over the next decade” and generate a tiny amount of growth.

He said, “It is more than compensated for through tax increases on big businesses and the wealthy.

In the 10-year budget horizon, the law, according to Moody’s, “will moderately lower inflation,” becoming “more substantial later in the decade.”

But many American households prefer immediate relief from inflation to gradual reductions over time.

Unpopular costs of climate change

The 755-page plan also contains proposed climate change provisions worth $369 billion that are intended to move Americans to green energy and position the United States as a worldwide leader on climate change.

Biden defended the legislation in a statement released on Sunday, calling it “the biggest investment ever in fighting the existential problem of climate change.”

The climate components include a methane emissions tax, incentives for Americans to purchase electric cars, and $3 billion for “environmental and climate justice” projects.

Additionally, $250 million would be used to make government buildings more environmentally friendly.

However, several economists and other organisations have issued warnings that these policies may harm individuals already feeling the pinch financially.

The poor will be harmed the most, according to a new analysis by CatholicVote, a non-profit advocacy organisation managed by Catholic laity.

The paper said that while green energy initiatives have high initial costs, they may result in “higher utility bills for the lower-middle and lower-income people that still depend on traditional sources for heating, cooling, lighting, and refrigeration.”

Former Department of Labor official and managing partner of Geostratix, Michael Stojsavljevich, told CNA that the measure is “inefficient” and would put an increased burden on families.

“It doesn’t do anything to address the spending- and supply-chain-based root causes of inflation.

We’re pursuing fewer things while spending more money, he said.

According to Stojsavljevich, the measure “shifts the emphasis to pursuing green energy policies.” “as well as those that the typical American cannot afford or is not likely to purchase.

The American Gas Association wrote to Congress with an estimate that the methane tax in the bill would result in “significant additional expenses” in the form of higher bills for households and small companies that use natural gas, raising energy costs for the typical family by up to 17%.

The business group stressed that the plan would most negatively affect lower-income Americans, writing that “these consequences are inconsistent with President Biden’s vow to pay for reconciliation without putting additional taxes on lower-income Americans.”

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