Biden Admits Inflation Reduction Act Will Have Less Impact on Inflation Than Originally Promised

Daniel 8/11/2023

President Biden on Thursday admitted that the Inflation Reduction Act (IRA) will have "less to do with reducing inflation" than he originally said. He also said that he "wishes he hadn't called it that."

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President Joe Biden speaks during an event in the East Room of the White House in Washington, DC, US, on Tuesday, July 25, 2023. (Ting Shen/Bloomberg via Getty Images)

The IRA was a $739 billion spending bill that was passed by Congress in August 2022. It was designed to help address the rising inflation that was occurring at the time. However, the Congressional Budget Office (CBO) has estimated that the IRA will have a negligible impact on inflation.

Biden's admission is a blow to his administration, which has been under fire for its handling of inflation. It also raises questions about the effectiveness of the IRA.

In a speech at a campaign fundraiser in Park City, Utah, Biden said that he "misspoke" when he said that the IRA would help reduce inflation. He said that the bill was designed to "address the supply chain issues and other factors that were contributing to inflation."

Biden also said that he "wishes he hadn't called it the Inflation Reduction Act." He said that the name was "misleading" and that it created the impression that the bill would do more to reduce inflation than it actually will.

Biden's admission is a setback for his administration, which has been struggling to address the issue of inflation. It also raises questions about the effectiveness of the IRA. Only time will tell how the IRA will impact inflation. However, Biden's admission is a reminder that the fight against inflation is still a long way from over.

In addition to the CBO's estimate, some economists have also criticized the IRA, saying that it will not do enough to address the root causes of inflation. They argue that the bill is too focused on short-term solutions and that it does not address the long-term structural problems that are contributing to inflation.

It is still too early to say what the ultimate impact of the IRA will be on inflation. However, Biden's admission is a reminder that the bill is not a silver bullet and that it will take more than just a spending bill to address the issue of inflation.