Colorado Democratic Sen. Michael Bennet recently issued the claim that the reason that the Inflation Reduction Act has not actually reduced inflation is just that it has not been able to take effect quite yet.
While speaking on the Sunday edition of CNN’s “State of the Union,” Bennet claimed that the various cost-saving provisions within the $740 billion tax and spending plan for the Democrats have not yet been rolled out. The Senator claimed that the extreme prices at the pump, a shattered supply chain on a global level, and the time it takes to push a law into effect are the main reasons that the individual American has not yet experienced any of the promised relief or assistance.
“Why isn’t the Inflation Reduction Act reducing inflation?” expressed Dana Bash, the show’s host.
“Well, because the elements of the Inflation Reduction Act aren’t going to kick in for a while, Dana,” shot back Bennet. “I mean, the cap on drug prices for seniors and the requirement finally — finally, we overcame pharma to have a requirement that Medicare negotiate drug prices on behalf of the American people — capping insulin at $35 a month, I mean, these are things that are going to take a while to put in place.”
“Today, gasoline is $3.70 a gallon,” he went on. “Here in Colorado, a gallon of milk costs $4.20. That’s really tough on people. And I think one of the things I have been trying to explain to folks is that this is a global problem. Canada has the same inflation that we have. The European — every country in Europe has the same inflation we have. The U.K. does as well. India has as well, because as we’re facing broken global supply chains that we have to address. And we’re facing increases in energy prices because, two years ago, oil was at $20 a barrel, went to $93 because of the economic recovery, and then Putin invaded Ukraine. The fact that it is global is cold comfort when you’re paying $3.70 a [gallon].”
In the face of the claims from Bennet, analysis from many experts has indicated that the Inflation Reduction Act will not actually reduce inflation in either the long term or the short term.
On such analysis stemming from the Wharton School of Business, this past July discovered that the bill would actually end up sparking further inflation out through 2024. Going even past that, however, the impact of the law regarding inflation would be “statistically indistinguishable from zero” throughout the rest of the decade, “thereby indicating low confidence that the legislation will have any impact on inflation,” expressed the budget model found in the Wharton study.
