Dems Hope To Boost Midterm Fortunes with Inflation Reduction Bill That Won’t Reduce Inflation

This week, President Joe Biden signed the Inflation Reduction Act (IRA)—a massive package of climate spending, health care subsides and price controls, and corporate tax increases—into law.

Now Democrats intend to sell it to the public in hopes of salvaging their midterm election fortunes. As Politico reportsa consortium of outside groups aligned with the Democratic Party is planning to spend $10 million advertising the law in “A 90-day sprint to promote the package and defy a brutal electoral environment for the party.” Democrats are planning to make the case directly to constituents, too.

But despite upbeat headlines showering Biden and his fellow Democrats with praise for their accomplishments, there’s little reason to think that the particulars of the legislation will make much difference at the polls this November, because it won’t live up to the promises it makes.

The best way to understand the IRA is as a repackaged, rebranded version of the “Build Back Better” spending plans that Democrats spent much of 2021 and early 2022 trying to pass. The IRA is smaller than any of the various Build Back Better bills that Democrats tried to push through Congress, but the mix of issues and priorities is essentially the same: It’s a climate spending bill attached to Obamacare subsides and prescription drug price controls along with an awkward tax reform that amounts to a corporate tax hike.

What’s different this time around, besides the smaller size of the bill, is the branding.

Instead of the Democrat’s ambitious social spending agenda, the bill has been repackaged as a more modest inflation reducer. It’s not hard to understand the reason for the rebrand: Polling has found that inflation is the number one concern for voters, and Biden has pledged to make fighting it his top priority.

But the IRA pursues that goal in name only. As the Manhattan Institute’s Chris Pope recently argued, although “rising inflation has forced Democratic leaders to scale back their ambitions significantly, the various provisions of the Inflation Reduction Act remains largely unaltered from a time when inflation was the least of their concerns.” Outside the title, in other words, this bill doesn’t have a whole lot to do with inflation.

Indeed, multiple nonpartisan analyzes a project that the bill will do nothing to mitigate inflation in the short term—and in the near future, it might even make inflation worse. An analysis from the Penn Wharton Budget Model found the IRA will “have no meaningful effect on inflation in the near term but would reduce inflation by around 0.1 percentage points by the middle of the first decade.” Similarly, economists for JP Morgan recently wrote that “despite the name, [the IRA] may not have a measurable impact on reducing inflation, which is being driven higher by energy and food prices, rents, and consumer goods and services spending.”

The public isn’t convinced either. Just 24 percent believe the law will actually reduce inflation, according to a recent Morning Consult poll. Democrats haven’t even convinced a majority of their own voters: The same poll found than half of Democrats—just 48 percent—think it will improve the country’s inflation situation.

With Biden’s approval rating hovering around the 40 percent mark and large majorities saying the country is on the wrong trackit’s easy to see why Democrats are worried about the coming midterm elections.

The best reason to think that Democrats will have a fighting chance in November is that polls have recently found that congressional Democrats performed slightly better than Republicans on a generic ballot (ie, one without specific candidates). But that improvement began before the IRA was signed into law.

Since Biden stepped into the Oval Office last year, Democrats have struggled to translate their agenda into voter approval. As GOP-aligned pollster Kristen Soltis Anderson recently wrote in her newsletter, CodebookPresident Biden has signed into law a lot of major bills during the last two years, a handful of which received bipartisan support and enabled him to maximize what he could achieve in a world where Democrats do not have 60 votes in the Senate. However, legislation have not given Biden and Democrats a lasting or notable political bump following passage of any of them.” Democrats can point to headlines about all the they’ve passed and all the policies they’ve enacted, but it doesn’t matter if people don’t like those policies.

Soltis Anderson’t completely rule out the possibility that this time will be different. But, she argues, voters will have to see a practical, positive difference in their own lives and attribute it specifically to Democratic governance.

One can never predict the results of elections with much confidence this many months out, and, given that inflation for the single month of July was effectively zero (even though inflation rose 8.5 percent over the previous 12 months), inflation may mellow somewhat on its own.

But if Americans need to feel and credit Democratic policies for improving their lives, and their number one priority is inflation, that may turn out to be a problem given the way Democrats have branded and sold their latest big-ticket legislation: How many voters do they expect to win over with an inflation reduction bill that is quite unlikely to reduce inflation?


FREE MINDS

A federal judge has put a stop to part of Florida’s Stop WOKE Act. The law, backed by Republican Gov. Ron DeSantis, aims to prohibit classroom discussions and corporate education that makes people feel discomfort about their race.

The judge said the employer portions of the law plainly violates First Amendment speech protections: “The challenged provision of the Act is a naked viewpoint-based regulation on speech that does not pass strict scrutiny,” US District Court for the Northern District of Florida Chief Judge Mark Walker writes in the ruling.

Later in the ruling, Walker writes: “Florida’s Legislators may well find Plaintiffs’ speech ‘repugnant.’ But under our constitutional scheme, the ‘remedy’ for repugnant speech ‘is more speech, not enforced silence.'”

The ruling also begins with an extended reference to the Netflix sci-fi series Stranger Things:

In the popular television series Stranger Things, the “upside down” describes a parallel dimension containing a distorted version of our world. See Stranger Things (Netflix 2022). Recently, Florida has seemed like a First Amendment upside down. Normally, the First Amendment bars the state from burdening speech, while private actors may burden speech freely. But in Florida, the First Amendment apparently bars private actors from burdening speech, while the state may burden speech freely.


FREE MARKETS

Speaking of Netflix: More people are now watching streaming services than cable TV, The Wall Street Journal reports:

Americans spent more of their July TV-viewing time streaming content on services such as Netflix, YouTube and HBO Max than they did watching cable television, according to Nielsen data, marking the first month that streaming has overtaken cable.

Nobody knows what television is anymore!


QUICK HITS

• Prosecutors say Salman Rushdie’s attacker was motivated by the belief that Rushdie disrespected Islam.

• A former executive with former President Donald Trump’s company admitted in court that “that he had conspired with the former president’s company to commit numerous crimes,” reports The New York Times.

• After a hearing, a federal judge indicated that he might unseal some part of the affidavit related to the FBI search of Trump’s Florida residence, Mar-a-Lago.

• The Biden administration is planning to deliver monkeypox vaccines to localities that plan to vaccinate people with one-fifth the previously recommended dose, in an effort to stretch vaccine supplies.

• Hackers are jailbreaking John Deere tractors.

• Inflation is so high that retirees are coming back into the work force in order to afford basic goods.

• She-Hulkthe new Disney+ sitcom-esque series based on a Marvel Comics superhero, is garnering pretty good reviews.

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