Democratic Senator Joe Manchin has suggested that the measures included in the recently adopted Inflation Reduction Act will not have an immediately positive effect on US consumer prices.
In comments to reporters, Manchin noted that the Democrats, who passed the law through Congress practically unilaterally, never promised that the law would do what it says in the title immediately.
"Why would it [be going to make everyday goods less expensive]? Well, immediately it's not. We've never [said] anything would happen immediately, like turn the switch on and off," the senator said.
Manchin insisted that the bill requires certain investments to be made, investments which won't occur naturally with the passing of the bill and the work of the Federal Reserve on reducing inflation. He projected that it would take a decade for the incentives included in the passed bill to fully kick in.
"If you think that you’re going to wait on the Federal Reserve to raise rates, discourage you from buying anything (and) that’s going to take care of our inflation, that’s not how you take care of inflation," the senator argued.
The Democratic went on to suggest that incentives for installing solar panels and purchasing electric cars will be introduced gradually over the ten-year-long term indicated in the act. The bill suggests that the government will spend some $375 billion on these incentives.
The Inflation Reduction Act was approved by Biden on August 16. It was all that was left of POTUS's original and ambitious Build Back Better Act, which mulled spending as much as $3.5 trillion. Most of this proposed investment was intended for Biden's green agenda initiatives, with the rest set aside for resolving social issues, such as high prescription drugs prices, immigration, universal preschool, and extensions to Medicare, Medicaid and the Affordable Care Act.
However, the Build Back Better Act failed to gain enough traction among Democrats, while Republicans vehemently opposed its exorbitant spending that they feared could speed up inflation. Some Democratic senators, Manchin included, shared the GOP’s concerns.
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After several rounds of negotiations, a number of programs were removed from the bill and spending was slashed almost tenfold. What was left of the bill was renamed the Inflation Reduction Act in line with Biden's months'-long promises to deal with inflation that has been hitting the US since November 2021.
The Democrats claim that the bill not only pays for what it spends, via an increase to corporate tax and boosting IRS capabilities to collect, but also reduces the US budget deficit by earning more money than it spends. However, some nonpartisan economists have aired their expressed skepticism over the claims.