STATEMENT: Roosevelt Institute Scholars Respond to President Biden’s Inflation Reduction Act of 2022
Agreement presents a historic opportunity to lower costs for families while laying the groundwork for sustainable growth, an equitable tax code, and a clean energy future.
July 28, 2022
NEW YORK, NY — Today, the Roosevelt Institute applauds the Biden administration’s Inflation Reduction Act (IRA) bill to address climate change, tax inequity, health care, and inflation—and is hopeful that it will be approved by Congress. The IRA recognizes that revenue provisions can go beyond their budgetary impact and independently move us toward a more equitable, sustainable economy. From drug price negotiation to a minimum corporate income tax to stricter IRS enforcement, the revenue side of the proposal includes structural interventions that build resilience and fairness into the economy and curb undue corporate power while funding vital projects.
Rather than just relying on the Federal Reserve’s blunt tool of interest rate hikes, the bill provides targeted interventions to stem rising prices by strengthening the supply of clean energy, curbing drug prices, and taxing those with the most ability to pay.
Specifically, to address the inflation challenges in the US economy, the bill:
- Expands and invests in the supply side of clean energy, which is crucial in addressing climate concerns, tackling one of the most volatile sources of inflation in this recovery, and bringing down the costs Americans face in cooling their homes and getting to work;
- Directly addresses skyrocketing costs in prescription drugs and health care, a central pocketbook issue for families and increasingly a source of inflationary pressures; and
- Improves the tax code by ensuring large corporations pay at least 15 percent of their profits in tax while ensuring the wealthiest pay their fair share.
In response to this news, Roosevelt Institute experts had the following comments:
“This agreement shows the emergence of a new common sense: Public investment can reduce carbon emissions, drive economic growth, and make essential goods more affordable for Americans. It addresses short-term price increases, especially on prescription drugs, by using the power of federal negotiation to curb the market power of pharmaceutical companies. And it makes long-term investments in the industries of the future, especially clean energy. This agreement is a welcome and necessary first step,” said Felicia Wong, president and CEO of the Roosevelt Institute.”
“This compromise is more than just an act addressing inflation, although it takes vital steps in that direction. It simultaneously addresses several key and long-standing problems facing our economy and, more broadly, our global society. It tackles the high cost of energy with a $369 billion investment in energy security and climate change. It addresses rising health-care costs by lowering premiums, capping out-of-pocket expenses, and curbing a ‘gift’ to the pharmaceutical industry, all for an estimated savings of $300 billion. And it raises an estimated $450 billion through a 15 percent corporate minimum tax, increased IRS tax enforcement, and closing of a gaping loophole that benefited some of the richest people on Wall Street. This is an important step in showing that we can be good global citizens,” said Joseph Stiglitz, Nobel Laureate and Chief Economist at the Roosevelt Institute.
You can find Stiglitz’s full statement on the Inflation Reduction Act here.