Biden's Inflation Reduction Act bad news for American incomes: Holtz-Eakin
Former CBO director Douglas Holtz-Eakin reacts to backlash over Democrats' spending push as inflation surges on 'Your World.'
West Virginia Democratic Sen. Joe Manchin III wasn't "tricked" into forging what Democrats claim is counter-inflationary legislation with Senate Majority Leader Chuck Schumer, but the bill won't slow inflation, as Manchin believes, a former head of the Congressional Budget Office told Fox News on Monday.
"The Senate's moving on to whatever we want to call this inflationary anti-inflationary bill. And combined [with the CHIPS act], they will do a lot of spending upfront and promise to pay for it later -- and the deficit won't go down for six years," American Action Forum President and former CBO Director Douglas Holtz-Eakin said.
In that regard, if the Federal Reserve cannot tamp down inflation within that period, the economy will be in even worse shape.
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Sen. Kyrsten Sinema's position on the compromise is still up in the air, reports say. (AP/Getty Images)
"If the Fed doesn't have inflation under control in six years, we're all in really big trouble. This will do nothing to help," Holtz-Eakin said of the Manchin-Schumer compromise.
Noting the Joint Committee on Taxation, which was positive on the Democrats' infrastructure law, was conversely critical of this legislation, Holtz-Eakin said none of their calculations or procedures have changed in the interim, yet lawmakers now ignore their analysis:
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Schumer (Elizabeth Frantz/PoolviaAP)
"[They] haven't changed the way they do anything. They get tax legislation. They look at the implications. They assign it to income groups. This is business as usual for them. So they took the language as written, interpreted it, wrote it down, and it hits people of all incomes," he said.
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Inflation graphic (istock)
"And it's inevitable that it will because it's a large tax increase on American corporations who employ a lot of Americans, sell products to a lot of Americans -- And this will make the wages for the former go down and the prices for the latter go up. And so that's bad news for Americans of all incomes. It's not a complicated analysis."
Holtz-Eakin underlined he doesn't believe Manchin was taken advantage of by his caucus, but that he made a "good-faith effort to negotiate something that he believes in."
"So I don't think he was tricked, but I'm not sure that he should trust the track record on the other side of that bargain."