Hope springs eternal, especially among politicians facing an electoral wipeout. Democratic leaders and their media confederates quickly embraced the latest life-preserver: the recent deal between Senate Majority Leader Chuck Schumer and Sen. Joe Manchin (D., W.Va.) to resurrect the Build Back Better Bill.
The two senators slimmed down the legislative monstrosity and restyled it the Inflation Reduction Act. That nonsense label is worthy of a P.T. Barnum ad campaign. The Penn Wharton Budget Model predicts that the bill’s impact on inflation will be “statistically indistinguishable from zero.”
It isn’t clear this slimmer bill can pass, but already the Washington Post has trumpeted the hodgepodge of climate provisions, a three-year extension of ObamaCare subsidies, and price controls on some drugs provided through Medicare as having “the potential to change the narrative” of Joe Biden’s presidency.
Mr. Biden needs all the help he can get: His 38% approval rating in a late July Gallup Poll is down from the 40% average in the sixth quarter of his presidency, itself the lowest figure for any president since Gallup began routinely measuring in the 1950s.
So Democrats are pumping this latest Build Back Better incarnation big time, hoping it’ll be the life raft they need. A White House spokesman says it shows “Democrats have a plan to lower costs for middle class families.” Retiring Illinois Rep. Cheri Bustos claims it gives her party “the Big MO,” while Virginia Rep. Abigail Spanberger proclaimed it will “change people’s lives.”
Such hyperbole won’t save Democrats; voters will see that the promises don’t match reality. Take California Rep. Mike Levin’s claim that the bill “will dramatically reduce costs for the average American that has to pay exorbitant prices for prescription drugs.” These price controls would apply only to expensive drugs with no generic competition offered through Medicare, starting with 10 such drugs in 2026. Consumers won’t feel any cost difference ahead of the midterms.
That’s a major problem for a bill claiming to ease the high prices fueling voter frustration. This $485 billion legislation won’t reduce inflation in the near term and could even make it slightly worse.
Like last year’s version of Build Back Better, the bill also has cost-hiding gimmicks. Take the ObamaCare subsidies that the American Rescue Plan extended for a year. The new bill would extend them for three more years, though Democrats almost certainly intend them to be permanent. This “temporary” extension allows Democrats to pretend this measure would cost only $65 billion, concealing the $155 billion the expansion would cost for the rest of the decade. Voters didn’t like this hocus-pocus when Democrats tried it last year, and now they’ve also seen what unnecessary spending does to inflation.
The bill is also likely to harm growth with its $470 billion in revenue increases via new taxation. As Republicans will surely note again and again, that’s the last thing Washington should be doing during a recession. And so much for Mr. Biden’s promise never to raise taxes on families making less than $400,000. Analysis from the Joint Tax Committee says taxes on families making less than $100,000 a year will rise by $5.8 billion in 2023 and taxes on those making less than $500,000 a year will jump by $30.8 billion.