Chuck Schumer, the Senate Majority leader, finally reached an agreement with recalcitrant Democrat Senator Joe Manchin to push forward a watered-down version of the bill that was originally known as the Build Back Better Act. Now called the Inflation Reduction Bill, it will be brought to the Senate floor before the start of the August recess. The bill is expected to bring down inflation which has reached record highs for several factors including the stimulus check payments.
The new bill is to offer a solution for families in need of an immediate and real economic solution. It will help lower health care costs and also address the broken tax code. The latter has allowed the extremely wealthy corporation to avoid paying their fair share of the taxes till now.
Will It Help Lower The Stimulus Check-Fuelled Inflation?
There are multiple provisions of the legislation that will benefit working people. One vital segment is that it will bring down the price of medicines. Medicare will begin negotiating for lower drug prices for people with disabilities and seniors. There will be a renewed focus on the highest expenditure drugs present in the market for 9 to 12 years. The Medicare program could result in nearly $100B in savings annually.
The legislation will lead to historic public investment in clean energy deployment and local manufacturing of clean energy products. It is more than just solar and wind. It includes hydrogen, carbon capture, and nuclear. The cost of energy will come down drastically.
But the study reveals that the Inflation Reduction Act will not directly have a positive impact on inflation. This is despite President Biden’s assertion that the legislation could lead to inflationary relief all around.
What is more worrisome for administrators and policymakers is the prospect of a further spike in inflation due to the infusion of more money through state stimulus checks. Around 18 states have plans to send stimulus checks to residents to counter the effect of inflation.
Already Maine and New Mexico have started sending out stimulus checks to their residents, while California has changed its plans to send gas cards to vehicle owners and has moved to direct stimulus checks. Republican-ruled Florida has also announced a $450 stimulus check.