One thing the Inflation Reduction Act may not do: Lower inflation
By Aimee Picchi
/ MoneyWatch
The Inflation Reduction Act is aimed at tackling a host of problems, from climate change to catching tax cheats, but there's one issue it may not solve: reducing inflation.
That's the conclusion of the Penn Wharton Budget Model, a group of economists and data scientists at University of Pennsylvania who analyze public policies to predict their economic and fiscal impacts. Its analysis, published Friday, comes as inflation remains near a 40-year high, crimping the budgets of consumers and businesses alike.
The Inflation Reduction Act would invest nearly $400 billion in energy security and climate change proposals, aimed at reducing carbon emissions by approximately 40% by 2030. It also would allow Medicare to negotiate with drugmakers on prescription prices, and would limit out-of-pocket drug expenses for seniors to $2,000 annually. The bill also directs $80 billion in funding to the IRS, aimed at helping the underfunded agency hire more auditors and beef up its customer service and technology.
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