Following the Penn-Wharton Budget Model debunking Democrats’ central claim that their Inflation and Recession Act would reduce the deficit, President Biden’s favorite economic forecaster, Mark Zandi of Moody’s Analytics, also admitted the bill would only decrease by a mere .33 percent.
Elsewhere, Zandi described the bill as “nudging” prices downward – hardly reassuring to families being crushed by 40-year record high inflation.
CNN: “What will this deal likely do to inflation?”
Zandi: “It’ll nudge it lower… You know, it’s not a game changer by any respect, Kate, you know, certainly not in the near term but the senator is right it will reduce inflation over the ten-year budget horizon that they’re focused on.”
Ten years for a .33 percent reduction in inflation? This won’t help anyone.
In order to reach even this lukewarm assessment of the tax increase proposal, Zandi’s own weekly memo:
- Omits the true cost of Democrats’ plans to permanently extend temporary subsidies for Obamacare that include the wealthy (which would cost $210 billion, not just $64 billion)
- Assumes that the IRS will actually be able to hire new agents (its struggle to hire quickly in the recent past is one reason for its backlog of tax returns) and can raise $124 billion simply through greater enforcement (which will impact lower- and middle-income earners, not merely the wealthy).
- Takes seriously a budget gimmick that allows the White House to “delay” a rule that was never implemented and claim it as $122 billion in “savings.”
- Ignores the clear evidence from the Joint Committee on Taxation that these tax increases will fall on lower- and middle-income Americans.
Zandi had previously admitted that earlier versions of this bill would do little to curb inflation, and would likely make it worse.