RELEASE: Zandi, Blinder, and Clausing Speak on the Economic Benefits of the Inflation Reduction Act
Washington, D.C. — Today, in a wide-ranging conversation on the benefits of the Inflation Reduction Act, Center for American Progress President and CEO Patrick Gaspard spoke with Dr. Alan Blinder, Gordon S. Rentschler memorial professor of economics and public affairs at Princeton University and former vice chair of the Federal Reserve; Dr. Kimberly Clausing, Eric M. Zolt chair in tax law and policy, UCLA School of Law; and former Deputy Assistant Secretary for Tax Analysis, U.S. Department of the Treasury Dr. Mark Zandi, chief economist at Moody’s Analytics.
The conversation, which is fully archived here, touched on how the bill will move the economy in the right direction, strengthen the U.S. tax system, and reduce many Americans’ largest costs, among other benefits.
Dr. Zandi spoke about the ways the legislation will lower costs:
If you’re a senior and you buy prescription drugs, this is a big deal. If you’re a low-income household that receives health insurance through the Affordable Care Act, this is a big deal. And ultimately, in the longer run, this is going to be a bigger deal for all of us, because in my mind the most significant aspect of the legislation is the provisions around climate change, and those play out over a long period of time . . . If you do the arithmetic here, this is a very significant piece of legislation that will ultimately reduce energy costs for everybody. So, I do think it’s a very, very important piece of legislation.
Dr. Clausing discussed the ways that the Inflation Reduction Act would strengthen the tax system and make it more fair:
[The Inflation Reduction Act] is fair in the sense that the tax system itself has ceased to function as well [as] it should because of persistent, long-standing underfunding of the IRS. When you deplete the IRS of resources for a long time, they can’t audit millionaires, they can’t enforce the tax code on businesses, they can’t make sure that people aren’t misrepresenting their economic well-being. This has particularly helped tax cheats and tax cheats at the top of the income distribution, so being able to give people faith that when they pay their taxes honestly that other people are also being asked to pay their taxes honestly will also be another point in the fairness category for this legislation.
Dr. Blinder touted the ways in which the Inflation Reduction Act compliments the bipartisan infrastructure law and the CHIPS Act:
The [Inflation Reduction Act], which we all hope will pass very, very soon—I think it will, I hope it will. It’s a very good bill. The CHIPs Act, which just passed and then go back to last year’s bipartisan infrastructure bill, another minor political miracle. You put all that together and what you have is a serious program of real supply-side economics. And I want to distinguish that from cutting the income taxes of the richest Americans, which is what supply-side economics has come to mean for many Republicans going back to Ronald Regan. Most of us economists have poo-pooed the positive supply effects of those types of policies.
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