FOX Business’ Madison Allworth reports from Jersey Shore.
The White House is defending the Deflation Act against a report by the nonpartisan Congressional Budget Office that suggests the legislation will not significantly reduce inflation in the coming years.
“Could you address the new CBO analysis of the DCA that says it will have little or no impact on inflation in 2022 and 2023,” the press secretary was asked White House spokeswoman Karin Jean-Pierre during a briefing on Friday.
Jean-Pierre replied, “You know, leading economists have said that this Deflation Act that was analyzed by them, that was analyzed by these economists, will indeed reduce inflation.”
Jean-Pierre was then asked if her response meant she was “rejecting” the CBO report and if it was fair to call the legislation the “Inflation Reduction Act” when the CBO says inflation will not be significantly reduced.
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White House Press Secretary Karin Jean-Pierre speaks during the daily briefing at the White House in Washington (AP Photo/Susan Walsh/AP Newsroom)
“Well, if you think about the Inflation Reduction Act, it’s going to have an effect on drug costs as well,” she explained. “Price reductions in pharmaceutical costs that will make a big difference for seniors and families.”
Jean-Pierre also said the legislation would cut energy costs, utility costs and Medicare, while providing $300 billion for deficit reduction.
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A man shops at a Safeway grocery store in Annapolis, Maryland. (Gene Watson/AFP via Getty Images/Getty Images)
“It will matter,” Jean-Pierre said. “It’s going to fight inflation, and that’s why it should be called the Deflation Act, because that’s exactly what it’s going to do.”
Jean-Pierre was reacting to a report this week from the CBO that said the bill would have a “marginal” effect on inflation.
“In calendar year 2022, passage of the bill would have a negligible effect on inflation, according to CBO’s estimate,” the office said. In calendar year 2023, inflation would likely be between 0.1 percentage point lower and 0.1 percentage point higher under the bill than it would be under current law, CBO estimates.
Jean-Pierre’s defense of the legislation comes the same day Senate Majority Leader Chuck Schumer, D-N.Y., said a group of 230 economists who warned the legislation would increase inflation were “wrong.”
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“They’re wrong… I don’t know who that list was… it’s as obvious as the nose on your face,” Schumer told reporters.
The economists wrote in the letter that the U.S. economy is at a “dangerous crossroads” and that the “inappropriately named ‘De-Inflation Act of 2022’ will do nothing of the sort and will instead perpetuate the same fiscal policy mistakes that helped accelerating the current troubling economic climate.”
U.S. job growth unexpectedly accelerated in July, defying concerns about a slowdown in hiring, even as the labor market faces the twin threats of inflation and rising interest rates.
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