House Budget Committee Republican Leader Jason Smith (MO-08) issued the following statement after Senate Democrats voted to spend hundreds of billions to increase inflation, increase taxes on the middle-class, and push the implementation of the Green New Deal on the backs of working families:
“The Inflation Act will only make the current economic and inflation crisis under President Biden and one-party rule in Washington worse. It spends hundreds of billions of dollars on the Green New Deal fantasy while shoveling more and more subsidies on wealthy Americans and corporations. It adds $30 billion to the debt over the next 5 years, throwing more fuel on the worst inflation crisis in forty years. The bill’s supposed ‘savings’ do not even begin to materialize until 2027 or later. And the only way they get there is by increasing taxes on middle class families and American manufacturers. When you clear away the fake sunset policies Democrats have no intention of keeping, this plan spends $745 billion over the next decade. Despite $597 billion in budget gimmicks and tax increases – half of which will be borne by Americans making less than $400,000 – it still manages to add $148 billion to the national debt. Only in Washington could Democrats pass a bill that increases spending and call it a reduction.
“The Democrats’ plan supercharges the IRS with $80 billion – 50 percent of which is earmarked for enforcement. With these funds, the Biden Administration can hire an army of new enforcement agents to target and harass the middle-class – including as many as 134 million Americans earning less than $400,000 who could be swept up in the Administration’s scheme to spy on bank accounts. Meanwhile, the Congressional Budget Office has confirmed that the Inflation Act’s proposal to lower prescription drug costs will actually drive-up prices for new drugs – leaving only the wealthiest Americans with access to the latest lifesaving medications and treatments.
“The country is mired in a recession, and Biden’s inflation crisis has cut Americans’ real wages by five percent. The Congressional Budget Office, 230 economists, and even Senate Budget Chair Bernie Sanders have said the bill the Senate has passed will either do nothing to address inflation or will in fact perpetuate it. Democrats are focused on advancing a partisan, Green New Deal agenda, not helping Americans who are hurting.”
Key Background: Democrats’ Inflation Act
The American Economy is in Recession under Joe Biden
- When Biden took office, CBO projected real GDP would grow 2.9 percent in the first quarter of this year. Real GDP fell by 1.6 percent.
- When Biden took office, CBO projected real GDP would grow 2.2 percent in the second quarter of this year. Real GDP fell by 0.9 percent.
- Over the last 75 years, every single time the economy has experienced consecutive quarters of negative growth, America has been in a recession.
- During the 2007-2009 recession, 9 million Americans lost their jobs and 10 million people fell into poverty, including 3 million children.
- The Federal Reserve just raised interest rates by 75 basis points – the fourth such rate increase since March – to combat the President’s inflation crisis. In total, the federal funds rate has risen by 2.25 percent, the fastest cumulative rate hike in 40 years.