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The House of Representatives voted Friday in favor of the Lower Inflation Act — a social spending and tax increase bill — and the fallout from its passage could imperil Democrats who face tough election or re-election battles against Republican opponents.
The measure, which passed the Senate over the weekend with the deciding vote from Vice President Kamala Harris, received support from all Democrats in the House of Representatives, passing by a vote of 220-207 on Friday.
All but three House Republicans voted against the bill, which now heads to President Biden’s desk for his signature. Three Republicans did not vote for the measure.
Key elements of the measure, negotiated and introduced by Sen. Joe Manchin, D-West Virginia, and Senate Majority Leader Chuck Schumer, D-N.Y., last month, include expanding subsidies under the Affordable Care Act, a set of climate-related spending and tax credits, regulations on fossil fuel energy, 15% minimum corporate tax rate and others.
DEMOCRATS’ CUT INFLATION ACT COULD MEAN LOWER WAGES FOR MILLIONS OF AMERICANS
Left to right: vulnerable Democratic Reps. Henry Cuellar of Texas, Cindy Aksne of Iowa, Tom O’Haleran of Arizona and Marcy Kaptur of Ohio. (Kevin Deitch, Zach Gibson, Angelo Merendino, Tom Williams/CQ Roll Call via Getty Images)
Democratic Congressional Campaign Committee (DCCC) spokesman Tommy Garcia told Fox News Digital that the legislation “puts people before politics” and accused the Republican Party of lying about “provisions of the bill to scare voters.”
“Democrats have introduced widely popular legislation that puts people before politics, lowers prescription drug and health care costs, cuts the deficit, fights inflation and boosts America’s energy production — all without raising taxes on families earning under 400 000 dollars,” Garcia said. “Republicans chose to play politics, lie about the provisions of the bill to scare voters, and do nothing to help address the challenges facing American families: showing voters that Democrats are the only ones who struggle to introduce solutions for people.’
In contrast, Mike Berg, a spokesman for the National Republican Congressional Committee, insisted that the bill does nothing to reduce inflation and that voters will go to the polls in November to hold Democrats accountable.
ANALYSIS SAYS INFLATION CUT ACT WOULD REDUCE ANNUAL INFLATION BY ONLY 0.1 PERCENTAGE POINT
“This bill does nothing to fight inflation, raises taxes and hires an army of IRS agents to harass the middle class,” Berg said in a statement to Fox News Digital. “Voters will fire any vulnerable Democrat who supports the Democrats’ latest reckless spending spree.”
Earlier this week, Fox News Digital reached out to 20 of the most vulnerable House Democrats to see if they plan to vote for the bill and to ask for reaction to a part of the bill that would fund more IRS agents. None of them answered.
The Internal Revenue Service headquarters building in Washington, DC (Chip Somodevilla/Getty Images)
The measure also includes $80 billion a push to the IRS over a 10-year period, with more than half earmarked to help the agency tackle tax evasion. The increase in IRS funding is slated to help fill 87,000 IRS positions, greatly expanding the size of the agency.
In a statement to Fox News Digital this week, Congresswoman Gwen Moore, D-Wis., insisted that “no family making less than $400,000 will directly pay higher taxes” and that the increase in funding for the IRS will be used to “go after sophisticated rich people and big corporations who avoid taxation so they can finally pay their fair share as well.”
Democrats in the Senate predicts that increased funding for the IRS could add an additional $124 billion in federal revenue over the next decade by hiring more tax officials who can deal with wealthy individuals and corporations trying to evade taxes.
AMERICANS FEAR IRS WILL USE INFLATION ACT FUNDING TO AUDIT MIDDLE AND LOW INCOME TAXPAYERS
But Republicans warn the bill would fund an “army” of IRS agents to deal with small business owners and lower-income workers. Americans earning less than $75,000 a year are slated to receive 60 percent of the additional tax checks expected under the Democratic spending package, according to an analysis released by House Republicans.
US Capitol in Washington, DC (Bill Clark/CQ-Roll Call, Inc)
An analysis by Penn Wharton of the University of Pennsylvania published Friday found that the Deflation Act will do little to reduce the annual rate of inflation in the midst of an economic recession. The bill would reduce annual inflation by just 0.1 percentage point over the next five years.
Late last month, the nonpartisan Joint Committee on Taxation (JCT) revealed in an analysis that the Cut Inflation Act would raise taxes by billions of dollars, including for the middle class.
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According to JCT, Americans making less than $10,000 a year will see a 0.3% tax increase starting in 2023. Overall, starting in 2023, taxes will increase by $16.7 billion for Americans who earn under $200,000. For taxpayers earning between $200,000 and $500,000, the bill would raise taxes by a cumulative $14.1 billion.
President Biden repeatedly promised during his election campaign and even as president that he would not raise taxes for Americans earning under $400,000.
Fox News’ Tyler Olson, Jessica Chasmar, Megan Haney and Brandon Gillespie contributed to this report.
Kyle Morris covers politics for Fox News. On Twitter: @RealKyleMorris.
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