When President Joe Biden last week signed the Inflation Reduction Act into law, ostensibly to reduce debt, the big question was: Will the American public buy it?
“Well, I hope they do,” Rep. Tom O’Halleran, who represents Maricopa in the U.S House, said during an exclusive interview with InMaricopa. “I guess we have a lot more information, those of us who have to make that decision. We know prescription drugs costs are high. We know that for our elderly this allows a $2,000 maximum on costs (on out-of-pocket for people with Medicare Part D). This invests in our future in a way that we are going to be able to accomplish some goals worldwide that will keep our economy going, and a stronger economy will help slow down the inflationary cycle.
“Is (acceptance) going to be automatic? I can’t look at the American public and say, yes, but I can say we will be better off as we move along.”
InMaricopa readers who took part in the unscientific poll last week aren’t so sure.
Most – 53% – said they thought the legislation, which passed with no Republican support, actually will increase inflation, 28% said it would have no effect, 16% thought the act would reduce inflation as intended and 2% said they don’t care.
The U.S. Senate Congressional Budget Office agrees with the majority in the InMaricopa poll, saying the Joe Manchin-Chuck Schumer-sponsored bill would do nothing to address inflation, calling it “negligible at best.”
Click here to see in InMaricopa poll about Inflation Reduction act.
O’Halleran, a Democrat who has voted with President Biden the vast majority of the time, has plenty at stake with his support of the law. The three-term representative’s seat is among a handful of competitive races across the country this year that could swing the balance of power in the House. He faces Donald Trump-endorsed Eli Crane in the November General Election.
“Any normal bill going through Congress takes a bit of time to get into process, where any agency can make it work, and that’s what’s going to go on with this,” O’Halleran said. “So, I’m not making people promises because I know it’s not going to be doable in the next six months.
“But we will gradually get to that point where it will help.”
The Inflation Reduction Act is designed to lower costs for middle-class families, close tax loopholes for the rich and big corporations, take the most significant action ever to fight the climate crisis and create good-paying jobs.
The law, which comes as inflation is at a 40-year high, promises to raise $739 billion in new revenue by setting a minimum 15% corporate tax rate. That and the changes to Medicare drug pricing are to help pay for climate and health initiatives. It aims to curb inflation by reducing the deficit and investing in domestic energy production while promoting clean energy.
“When it comes to the Manchin-Schumer so-called ‘inflation reduction’ proposal, another shoe has just dropped,” Senate Budget Committee Ranking Member Lindsey Graham (R-South Carolina) said in a statement. “According to CBO analysis, the proposal’s effect on inflation is negligible at best. The estimate ranges from reducing inflation by 0.1% to increasing it by 0.1% in the near term. The idea that this tax-and-spend proposal is going to blunt inflation is yet again rejected, this time by CBO.”
The law, essentially a scaled-down, second generation of the $1.75 trillion Build Back Better plan that failed late last year, authorizes $369 billion in spending on energy and climate change, $300 billion in deficit reduction, three years of Affordable Care Act subsidies and a large expansion and modernization of the Internal Revenue Service, including 87,000 new IRS agents to scrutinize corporations and high-income individuals, according to O’Halleran.
The law is projected to bring the U.S. significantly closer to Biden’s goal of reducing greenhouse-gas emissions to 50% below 2005 levels by 2030.
O’Halleran said he prefers to look at the act an as investment rather than an expenditure.
“We’re having some inflationary issues, but we have people looking for work. China does not have that. China has tremendous economic issues. They are laying people off left and right,” O’Halleran said. “Russia has economic issues.
“With this investment, we are trying to find a way to address (inflation) to allow America to be strong militarily, allow us to be strong as a country economically and allow our families to have a future. People all the time want to refer to it as spending, and it is costing money, but it is an investment into the future, it’s not just putting money out the door.”
The slow-turning wheels of government, which could slow rollout of the new law, frustrates anyone accustomed to making quick decisions in life, and O’Halleran acknowledges he is among them, “especially when politics gets in the way of the future of America.”
“When it’s obvious that your competition is moving ahead of you, you have to find a way to catch up and move back ahead of them,” he said. “It’s obvious when we have a China in the world that has gone from a desire to be a regional power, to taking over the military power level of the world, that we have to make investments in that.
“I know we have a deficit in this country, but part of the issue here is we waited 20 years to address the infrastructure issues. And what happened? You get to a point, and you take a look at the round number of what’s needed — $1.2 trillion — and that’s a huge number. How much could we have gotten done 20 years ago? Where would we be now, whether it’s with our ports, our roadways, our hospitals, you name it. What has impacted that is that over time the costs have gone up and especially construction costs go up much faster than the Consumer Price Index.”
The new IRS agents will come onboard incrementally to ensure compliance and payment among corporations and high-earning individuals. O’Halleran conceded that “we are in a difficult market to find that many people of that level,” and that it is going to take time.
“People say how come so many?” he said. “Well, find out how many people a corporation uses to put its tax structure together and how many attorneys. How much court time is taken up? We will be getting back money, too. I believe it’s somewhere south of $400 billion to offset some of that expenditure and it goes to debt reduction, too.
“So, we need those 87,000 people when you have an agency that hasn’t had enough personnel the last decade and a half. It’s important we have these revenue streams. We don’t want to overtax people, but you have to invest in America, and if we don’t invest in America now, it’s going to cost us a lot more.”
O’Halleran cited gaining back the semiconductor industry – acknowledging Intel building two new plants in Chandler, strengthening infrastructure to compete with the rest of the world and having a workforce that is trainable as keys to future economic security in the U.S.
“These are necessary elements,” he said. “For the last number of decades, no matter which party you were looking at, we have not made these investments. At some point in time, you look at your roof and say, I have to have a new roof, or it will ruin the entire interior of the house.”