Colorado Democratic Sen. Michael Bennet said that the Inflation Reduction Act is not reducing inflation because it hasn’t set in yet.
Appearing on CNN’s “State of the Union” Sunday, Bennet said that the cost-saving provisions of the Democrats’ $740 billion tax and spending plan have not been implemented. Bennet claimed that high gas prices, a broken global supply chain, and the time it takes to put the law into effect are the primary reasons Americans aren’t seeing any relief.
“Why isn’t the Inflation Reduction Act reducing inflation?” host Dana Bash asked.
“Well, because the elements of the Inflation Reduction Act aren’t going to kick in for a while, Dana,” Bennet responded. “I mean, the cap on drug prices for seniors and the requirement finally — finally, we overcame pharma to have a requirement that Medicare negotiate drug prices on behalf of the American people — capping insulin at $35 a month, I mean, these are things that are going to take a while to put in place.”
“Today, gasoline is $3.70 a gallon,” he continued. “Here in Colorado, a gallon of milk costs $4.20. That’s really tough on people. And I think one of the things I have been trying to explain to folks is that this is a global problem. Canada has the same inflation that we have. The European — every country in Europe has the same inflation we have. The U.K. does as well. India has as well, because as we’re facing broken global supply chains that we have to address. And we’re facing increases in energy prices because, two years ago, oil was at $20 a barrel, went to $93 because of the economic recovery, and then Putin invaded Ukraine. The fact that it is global is cold comfort when you’re paying $3.70 a [gallon].”
Despite Bennet’s claims, expert analyses have shown that the Inflation Reduction Act won’t reduce inflation in the short term or the long term.
An analysis by the Wharton School of Business in July found that the bill could actually increase inflation through 2024. But even after that, the law’s impact on inflation would be “statistically indistinguishable from zero” through the rest of the decade, “thereby indicating low confidence that the legislation will have any impact on inflation,” Wharton’s budget model found.
The Inflation Reduction Act likely won’t lower prescription drug prices in the short term either. Under the law, the Secretary of Health and Human Services can negotiate the prices of certain drugs beginning in 2026.
Critics warn that it might not lower gas prices, as it imposes a 16.4 cents per barrel tax on imported crude oil and petroleum products.
