The Inflation Reduction Act, passed by Congress on August 12th, 2022, “will make a historic down payment on deficit reduction to fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030.” According to the IRS (Internal Revenue Services) website, “The Inflation Reduction Act changed a wide range of tax laws and provided funds to improve our services and technology….” Taxpayers can now claim a tax credit for possessing ‘clean vehicles’ (Electric Vehicles) that were purchased after August 16th, 2022, and whose final assembly was held in North America. If a vehicle was purchased before August 16th, 2022 with a written purchase contract, and the delivery of the vehicle happened after the date, the final assembly requirement does not apply and the taxpayer can still claim the tax credit. Also, if a person uses an alternative type of fuel in their vehicle that is beneficial, they can earn a $0.50 per gallon tax rebate. Additionally, this act will invest in domestic energy production and manufacturing and allow Medicare to negotiate drug prices, and caps out-of-pocket costs to $2,000. It also renewed the Affordable Care Act for three years, till 2025. This act reduces the cost of health insurance by providing subsidies that lower costs for households that are between 100-400% of the Federal Poverty Level. Carbon emissions will be reduced by roughly 40% by 2030.
No laws are currently being proposed in Congress related to or to limit inflation. This is because the Inflation Reduction Act was recently passed in August of this year.
Richard E. Neal (D-MA), Chairman of the House Ways and Means Committee, expressed his happiness on the passage of the Inflation Reduction Act. He said, “The Inflation Reduction Act is a historic win for America’s families and our planet…The American people have weathered unthinkable hardship over the last two years, and with the trust, they have given us, we put people over politics. We’ve led a remarkable economic recovery, and now, we will put money back into their pockets.” Rep. Neal portrays the act as compensation from the American government to its citizens. In the past two years, Americans have been harshly impacted by the COVID-19 pandemic as many have feebled their mental and physical health and lost their loved ones. Additionally, the Russia-Ukraine war added fire to it as the gas prices hiked and hence inflation started searing high. This has led to company closures and job layoffs from which Americans have suffered losses. The Inflation Reduction Act is a way of making up for that loss. Californian Democrat, Nancy Pelosi said in a statement, “When I hear people talk about inflation… we have to change that subject.” Speaker Pelosi wants to avoid the issue of inflation. Pelosi also said that the midterm election should be focused more on the cost of living rather than inflation. A couple of months ago, whenever the general public was out on the streets, they saw gas prices hiking up every week. That, of course, reminds them of inflation and they connect it to the government and the ruling party, which is the Democrats. Pelosi wants to divert civilian attention from inflation to something else such as the cost of living. Senator Ted Cruz (R-TX) also commented on the issue of inflation by saying, “It turns out to cause and effect still operates, that when you spend trillions of dollars you cause inflation. And you know what is stunning about that? Joe Biden and Kamala Harris and the rest of the administration, they don’t care.” Cruz, in this statement, accuses the Biden administration of causing and not caring about inflation, as one Republican would do. Cruz went on and mentioned that the Democrats want Americans to not be able to fill up gas in cars and get higher electricity and heating bills. Cruz said that Democrats are enjoying themselves while Americans are suffering from loss of money.
Chairwoman of the House Committee on Oversight and Reform, Carolyn B. Maloney, released new data in early November showing the benefits of the Inflation Reduction Act across congressional districts of both political parties. She said in a press release, “...By passing the Inflation Reduction Act, Democrats in Congress took bold steps to rein in out-of-control prices for lifesaving medication and to make health insurance more affordable.” Chairwoman Maloney, who is in support of the act, appreciates Congress, especially Democrats, by calling the passing of the act, bold steps. She also points out the ‘out-of-control’ prices of things that Americans had to pay for. This act lowers the prices of things that are of daily use like gas and milk.
The total revenue raised for the Inflation Reduction Act is $739 billion. Most of the revenue is for Prescription Drug Pricing Reform and a 15% Corporate Minimum Tax. Total investments in Energy Security and Climate Change and Affordable Care Act Extension, on the other hand, are around $433 billion. Deficit reduction goes over $300 billion. All the purposes of the Inflation Reduction Act are covered with a sufficient amount of money. With this considerable investment, inflation will come down and Americans will be relieved.
President Biden has taken some strong steps to support the Inflation Reduction Act. Last month, “[Pres. Biden] is authorizing the release of 15 million barrels from the Strategic Petroleum Reserve, a draw that completes the plan announced earlier this year to release a total of 180 million barrels.” Gas prices that hiked up came down close to the normal rate because of this effort by the President. This also shows the cooperation between the Executive and Legislative branches. Congress passed the Act and the Executive Branch made efforts to execute the act. One more example of teamwork between the two branches is the Affordable Care Act. It was first signed by Pres. Obama in 2010 and has been renewed ever since. The Inflation Reduction Act expanded its subsidiaries and extended it till 2025.
One example of a conservative media outlet is The Washington Times. One article about inflation reads, “The biggest financial fraud in history is now being inflicted on the American people and others in the form of inflation.” Since Washington Times is a conservative source and hence supports the Republican Party, it does not support the Biden administration in solving the problem of inflation and therefore calls it the ‘biggest financial fraud in history’ that is being inflicted on the American people. One example of a liberal media outlet is the New Yorker. One article reads, “By raising interest rates, the [Federal Reserve] hopes that people will spend less money, and the cost of things will come down.” This sentence shows how the Federal gov’t is working to lower inflation. Since this source is liberal and hence supports the Democratic Party, it shows the work that is being done to lower the stress on Americans. In May 2022, Representative Chip Roy (R-TX) commented on the 40 billion dollars that were sent to Ukraine. “The Senate should be ashamed of itself, passing a 40 billion dollar unpaid for bill, while the American people are suffering with rampant inflation.” Rep. Roy points out the help being sent to Ukraine while Americans themselves are struggling. This was a major issue because the federal government was sending help to others when the American people needed help and that is exactly what Roy pointed to. I think Congress is making amazing efforts to stop inflation. The Inflation Reduction Act is a very effective step which supports all the things that are in favor of Americans. For example, the renewal of the Affordable Care Act, work on Climate Change and Energy Security are all examples of a better future of Americans. The ACA will lower health insurance costs and Climate Change and Energy Security will ensure a better air quality and environment.
The Core Constitutional Principle I identified in the Executive Summary is part of the Preamble to the Constitution. It reads, “...insure domestic tranquility, provide for the common defense, promote the general welfare,...” The Inflation Reduction Act insured domestic tranquility and helped promote general welfare by an attempt to lower inflation and help Americans.
Author: SRIJAN AGARWAL
Works Cited
Cruz for Senate. “Sen. Cruz on Biden's Inflation Crisis: 'With this Administration, the Cruelty is the Point.'” Senator Ted Cruz, 15 November 2021, https://www.cruz.senate.gov/newsroom/press-releases/sen-cruz-on-bidens-inflation-crisis-with-this-administration-the-cruelty-is-the-point. Accessed 22 November 2022.
Internal Revenue Services. “Inflation Reduction Act of 2022.” IRS, 9 November 2022, https://www.irs.gov/inflation-reduction-act-of-2022. Accessed 21 November 2022.
Internal Revenue Services. “Inflation Reduction Act of 2022 | Internal Revenue Service.” IRS, 9 November 2022, https://www.irs.gov/inflation-reduction-act-of-2022. Accessed 21 November 2022.
Internal Revenue Services. “Plug-In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service.” IRS, 6 October 2022, https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d. Accessed 21 November 2022.
Jones, Dustin. “Biden will release 15 million barrels of oil from the strategic reserves.” NPR, 18 October 2022, https://www.npr.org/2022/10/18/1129788081/biden-to-release-another-15m-barrels-from-strategic-reserve. Accessed 22 November 2022.
Kim, Tammy. “Inflation Is Obscuring Biden's Pro-Labor Achievements.” The New Yorker, 31 October 2022, https://www.newyorker.com/news/daily-comment/inflation-is-obscuring-bidens-pro-labor-achievements. Accessed 22 November 2022.
Mueller, Julia. “Pelosi says election fight 'not about inflation.'” The Hill, 23 October 2022, https://thehill.com/homenews/sunday-talk-shows/3700268-pelosi-says-election-fight-not-about-inflation/. Accessed 22 November 2022.
Oversight and Reform. “Chairwoman Maloney Releases New Data Analysis Showing How the Inflation Reduction Act Will Make Prescription Drugs and Health Insurance More Affordable for Millions of Americans.” House Committee on Oversight and Reform |, 3 November 2022, https://oversight.house.gov/news/press-releases/chairwoman-maloney-releases-new-data-analysis-showing-how-the-inflation. Accessed 21 November 2022.
Rahn, Richard W. “The fraud of Biden's inflation.” Washington Times, 15 November 2021, https://www.washingtontimes.com/news/2021/nov/15/the-fraud-of-bidens-inflation/. Accessed 22 November 2022.
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