OPINION: This article may contain commentary which reflects the author's opinion.
It appears that President Joe Biden and the Democrats have secured the votes to get a major piece of their agenda passed, but it comes at a cost.
On Thursday, Arizona Senator Kyrsten Sinema said that she would support what the Biden administration has called the Inflation Reduction Act
“To win Ms. Sinema’s support, Democratic leaders agreed to drop a $14 billion tax increase on some wealthy hedge fund managers and private equity executives that she had opposed, change the structure of a 15 percent minimum tax on corporations, and include drought money to benefit Arizona,” The New York Times reported.
“Ms. Sinema said she was ready to move forward with the package, provided that the Senate’s top rules official signed off on it,” it said.
Senate Majority Leader and New York Sen. Charles Schumer said that he reached an agreement “that I believe will receive the support of the entire Senate Democratic conference.”
“The agreement preserves the major components of the Inflation Reduction Act, including reducing prescription drug costs, fighting climate change, closing tax loopholes exploited by big corporations and the wealthy, and reducing the deficit,” the Majority Leader said. The deal will “put us one step closer to enacting this historic legislation into law.”
It did not take a ton to get Sen. Sinema on board. She wanted a provision removed that would have eliminated preferential tax treatment for rich hedge fund managers who have donated millions of dollars to her campaigns.
She also asked for billions of dollars to help fix the drought issues that have affected states like hers in Arizona.
But the price Democrats paid to get her was higher. They eviscerated the “tax the rich” platforms of people like Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez who have been silent on eliminating the tax on hedge fund managers.
The New York Times reported:
“The agreement preserves the major components of the Inflation Reduction Act, including reducing prescription drug costs, fighting climate change, closing tax loopholes exploited by big corporations and the wealthy, and reducing the deficit,” he said. The deal will “put us one step closer to enacting this historic legislation into law.”
Mr. Biden called on the Senate to quickly pass the measure, praising the deal as “another critical step toward reducing inflation and the cost of living for America’s families.”
But, as the call it the Inflation Reduction Act, 230 economists said in a letter that it will definitely not reduce inflation.
Fox News reported.
The economists wrote in the letter first obtained by Fox News Digital that the U.S. economy is at a “dangerous crossroads” and the “inaptly named ‘Inflation Reduction Act of 2022’ would do nothing of the sort and instead would perpetuate the same fiscal policy errors that have helped precipitate the current troubling economic climate.” …
The economic experts point to the $433 billion in proposed government spending, which they argue “would create immediate inflationary pressures by boosting demand, while the supply-side tax hikes would constrain supply by discouraging investment and draining the private sector of much-needed resources.”
They also write that of “particular concern” is the corporate minimum tax that they say will undercut efforts to restore functioning supply chains.
Some of those who signed the letter included “Nobel laureate Vernon Smith, former Chair of the Council of Economic Advisers Kevin Hassett, former Director of the Office of Management and Budget Jim Miller and Robert Heller, former president of the Federal Reserve Board 1986-1989.”
But that is not what President Biden has said.
“This is the strongest bill you can pass to lower inflation, continue to cut the deficit, reduce health care costs, tackle a climate crisis and promote America’s energy security and reduce the burdens facing working-class and middle-class families,” the president said.