A cruel irony is that legislation sometimes has the opposite effect of its intention. If that’s the case with the Inflation Reduction Act of 2022, then taxpayers and businesses alike should brace themselves. Senator Joe Manchin (D-WV) played a starring role as the drama unfolded. He won kudos for standing up to Build Back Better, forcing the Democratic caucus to repackage a slimmed-down version of it as the Inflation Reduction Act of 2022, which passed along partisan lines.
Manchin initially refused to support the Inflation Reduction Act of 2022, too, before doing an about-face during the first week of August. The coal operators of West Virginia knew this would happen. As the mainstream media was trying to portray Manchin as some kind of coal darling, coal operators were having none of it on social media. Fiery comments on several LinkedIn posts that touted Manchin’s support for West Virginia’s coal and natural gas sectors warned people that he fakes right and goes left every time. Their posts appear to be prophetic now.
Manchin claimed he supported the legislation because it doesn’t pick winners and losers. He said he supports all of the above, meaning coal, natural gas, nuclear, etc., when it comes to power generation, and the legislation will advance a “realistic energy and climate policy that lowers prices today and strategically invests in the long game.” He said he didn’t want to undermine the U.S. by removing dependable and affordable fossil fuel energy before new technologies were ready to reliably carry the load. Even though he said “this legislation ensures that the market will take the lead, rather than aspirational political agendas or unrealistic goals,” the truth is that the Inflation Reduction Act of 2022 offers substantial subsidiaries that tilt the scales in favor of renewable programs that seem to fail to deliver energy when it’s needed most.
The Inflation Reduction Act could raise $739 billion through a corporate minimum tax of 15%, prescription drug pricing reform and tax collection enforcement. With $369 billion going toward energy security and climate change and $64 billion toward an extension of the Affordable Care Act, Congress will have $300 billion to apply toward the U.S. deficit.
On the surface, it looks like left-leaning policymakers are taking money from large corporations, Big Pharma, and wealthy Americans, and redistributing it to their constituents that support the Green New Deal. Those decisions will likely drive up energy costs as well as the cost of doing business in general, which will ultimately drive inflation higher.