The Inflation Reduction Act, which is a watered down version of the Build Back Better Act that the Democrats touted when they first took power, miraculously passed the Senate recently. It is expected to pass the House and be signed into law. It will create incentives to fight climate change through clean energy tax credits, a green bank, and incentives to plug methane leaks.
There will also be healthcare reforms in the measure. Protecting human lives is always a good thing. And there will be measures in it to reduce the deficit, important since inflation, although it has eased recently, is still there and gas prices are still too high.
No, the Democrats did not just save civilization. But they finally, belatedly, woke up and realized that there was more to life than just sticking it to the Russians.
We’re all called to stewardship of God’s resources. You can’t love the creator and hate the creation. If you hate the creation, then you hate the creator who made it. Jesus’ parables made consistently clear time and time again that we would be judged based on how well we were stewards of his creation. So anything that helps prevent the planet from overheating is a good thing.
This measure will undoubtedly help the Democrats at the polls this year. But will it help enough?
The problem with the bill is that it doesn’t go far enough. Last year, the International Energy Agency said fossil fuel development must stop in order to meet emissions targets. The bill will allow more oil and gas lease sales on public lands and waters. This means more spills and accidents waiting to happen on fragile ecosystems that cannot afford it.
The positive side of this bill is that maybe the Biden Administration, for once, is on to something – you’re much more likely to get meaningful legislation passed by carrots and not sticks. Maybe we could apply this to other issues. On abortion, for instance, maybe we could focus on passing legislation that helps make every child a wanted child and that rewards motherhood; after all, Missouri has a near total abortion ban, but women can still go to other states to get one.
And maybe the way to conduct diplomacy is through carrots and not sticks. Ever since Russia began its “Special Military Operation” on February 24th, the US policy has been to try to stick it to the Russians. That hasn’t worked. All that has happened is that Putin has dug his heels in and is more entrenched in power than ever. If sanctions were an effective tool, we would have resolved the North Korea conflict decades ago.
You have to be careful in how you go about transitioning to a green economy. The danger is that many jobs will be lost and many families destroyed, many more women will get abortions, and many communities decimated if it is not done right. However, it turns out that, according to a working paper from the National Bureau of Economic Research published this month that green jobs are frequently created in counties that have high shares of employment in fossil fuel extraction. Green jobs are also created in occupations that are about 21% higher paying than average.
On the healthcare side, there are some meaningful measures passed as well. One of the most obvious measures, one of the most common sense, and consequently, one most strenuously resisted in Washington is the notion that Medicare should be able to negotiate prescription drug prices. That measure is finally on the books. Other measures on the Inflation Reduction Act include limiting Medicare drug price growth to inflation, and limiting commercial drug price growth to inflation.
About $125 billion in taxpayer money would be raised though improving tax compliance. The IRS would be funded by $80 billion over the next ten years, which, according to the CBO, would result in an additional $204 billion over the next 10 years. The CBO estimates every dollar spent to reduce the tax gap would generate $2.50 of revenue.
On July 29th, the Penn Wharton Budget Model came out with an estimate saying that the Inflation Reduction Act would reduce non-interest cumulative deficits by $248 billion over the budget window.
More work needs to be done. Much of the social spending in the original BBB Act that Joe Manchin tanked – child tax credits, universal pre-K, and more – would have helped with the goal of making every child a wanted child. That is well worth the price of investment and one likely to give a big return.
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