Manchin’s deal with Schumer will not curb inflation, former Congressional Budget Office director warns

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Democratic Senator Joe Manchin III in West Virginia was not “cheated” into forging what Democrats say is anti-inflationary legislation with Senate leader Chuck Schumer, but the bill will not slow inflation, as Manchin believes. a former head of Congress. Budget Office told TBEN News on Monday.

“The Senate goes on with whatever we want to call this inflationary anti-inflationary bill. And combined [with the CHIPS act]they will spend a lot up front and promise to pay them later — and the deficit won’t diminish for six years,” said Douglas Holtz-Eakin, president of the American Action Forum and former CBO director.

On that note, if the Federal Reserve can’t bring down inflation within that time frame, the economy will be in even worse shape.

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“If the Fed doesn’t get inflation under control in six years, we’re all in big trouble. This won’t help,” Holtz-Eakin said of the Manchin-Schumer compromise.

Holtz-Eakin noted that the Joint Tax Committee, which was positive about the Democrats’ infrastructure bill, was actually critical of this legislation, saying that none of their calculations or procedures have changed in the meantime, but lawmakers are now ignoring their analysis:

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Schumer

Schumer
(Elizabeth Frantz/PoolviaAP)

“[They] haven’t changed the way they do anything. They get tax laws. They look at the consequences. They assign it to income groups. For them this is business as usual. So they took the language as written, interpreted it, wrote it down and it affects people of all income levels,” he said.

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Inflation chart

Inflation chart
(istock)

“And it’s inevitable that it will happen, because it’s a big tax increase for American companies that employ a lot of Americans, sell products to a lot of Americans — and this will lower wages for the former and prices go up for the latter. “So that’s bad news for Americans of all incomes. It’s not a complicated analysis.”

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Holtz-Eakin stressed that he does not believe Manchin has been abused by his caucus, but that he has “tried in good faith to negotiate something he believes in.”

“So I don’t think he’s been tricked, but I’m not sure he should trust the track record on the other side of that deal.”