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Depending on who you listen to, the Inflation Reduction Act is either a panacea for the country’s year-long price surge or a wasteful spending plan that’ll do little to cool inflation.
Neither side of the debate is entirely wrong.
Senate Democrats passed their party’s large-scale economic plan on Sunday, teeing up the measure for House approval and a signature from President Joe Biden. The package includes funding for clean-energy projects, lowering the cost of prescription drugs, and improving IRS enforcement. It also aims to counter high inflation by paying down the federal budget deficit by taxing profitable firms that currently pay nothing to the government.
The bill’s passage hinged on its inflation-fighting features. Sen. Joe Manchin of West Virginia — the holdout Democrat who blocked his party’s previous spending proposals — only backed the package once he and Senate Minority Leader Chuck Schumer shifted the plan’s focus to cooling price growth.
Yet different analyses of the IRA offer different forecasts for where — and when — the plan will actually cool inflation.
Analysts largely agree on where the bulk of the IRA’s inflation relief will show up. The plan allows Medicare to negotiate drug prices with pharmaceutical companies for the first time, opening the door for millions of Americans to enjoy significantly lower costs for crucial medicine.
“To seniors who’ve faced the indignity of rationing medications or skipping them altogether, this bill is for you,” Schumer said on the Senate floor soon after the IRA’s passage on Sunday.
