Inflation Reduction Act: Another Biden Deception

Democrats' green energy boondoggle, disguised as the Inflation Reduction Act, unleashes $485 billion in new federal spending and tax credits in the middle of the highest inflation in 40 years. The legislation includes $468 billion in new taxes weeks after the nation officially plummeted into a recession. 

By enlisting the media's support, Democrats have successfully packaged the legislation as a climate game changer that will reduce the deficit.  The Democrats' political propaganda has been drummed into the national conscience.  Only one problem. It's mostly untrue.  

Here is a list of the most egregious examples of sleight of hand in the massive, 755-page bill that passed without a single Republican vote:

• Despite the administration claims, an independent review of the bill reveals the act will have "no meaningful effect on inflation in the near term." By reducing long-term economic growth, the bill may actually worsen inflation, according to another study.
• The act contains $80 billion in funding for the Internal Revenue Service (IRS) to double the size of the agency by recruiting and hiring of 87,000 new employees. Don't call these recruits "agents" because it offends the administration.
• Reforms in prescription drug pricing, billed as saving Americans billions of dollars, will have little or no impact for at least seven years. And it excludes those individuals with company provided insurance.  
• President Biden insisted the new minimum 15% tax on corporations was aimed at big firms that pay no federal tax. In actuality, the new law raises taxes on all corporations currently paying less than the 15% rate. 
• Hailed as revolutionary, the green energy section contains $386 billion in spending for so-called energy security and climate change.  Yet, $4.275 billion will go for rebate programs for consumers, including those on Indian Reservations, who install water pump heaters, electric stoves and ovens, insulation and ventilation.  

                                             Inflation Reduction

The Wharton School of Business at the University of Pennsylvania estimates the Biden act will reduce inflation by around 0.1 percent by the middle of the first decade under this bill.  In addition, the new law would slightly "reduce GDP" in the first decade while  increasing economic growth by 2050. 

Deficit reduction is just a gleam in the eyes of the Congressional Budget Office (CBO), especially after President Biden issued an executive fiat forgiving student debt for 43 million borrowers. Preliminary estimates are the costs will be about half-a-trillion dollars.  So much for deficit reduction. 

                                                IRS Spending

Originally, the president proclaimed the new IRS agents would go after greedy billionaires.  But when Forbes reported there were 735 billionaires, 87,000 new non-agents (insert laughter here) appeared to be overkill.  The new party line is the IRS recruits will zero in on taxpayers making over $400,000.

Anyone who believes the administration's "fact-sheet" that asserts the non-agents will collect $124 billion in new taxes knows nothing of IRS history.  In 2010, Congress showered millions on the IRS in hopes of raising $9 billion in new revenue.  The results were deplorable.

The bloated agency, which already has 78,661 employees, spent $574 million to collect $14 million in new taxes.  From fiscal 2015 to 2017, the IRS audited 73% of returns from taxpayers earning $200,00 and lower after stating its mission was to target high-earners. 

 

                                                Prescription Drugs

The American Medical Association (AMA) reviewed the bill's provisions for lowering prescription drug prices and praised the reforms. However, the top 10 drugs, which account for 40% of Medicare Part B drug spending, likely won't be eligible for negotiated prices until 2029.  That's not a typographical error.

                                                Corporate Taxes

The president initially claimed 55 corporations paid no federal taxes in 2021.  His statement had to be walked back.  Actually 26 companies in the S&P 500 and the Fortune 500 paid no taxes.  The 15% minimum would apply to hundreds of firms that paid federal taxes but at a lower rate.

Corporate taxes are ultimately paid by the firm's  customers. Companies pass along the cost in the form of higher prices.  

                                                        Green Energy 

Two of the beneficiaries of the $386 billion in climate spending will be electric car buyers and the solar industry.  Under the act, the business investment tax credit will be lifted to 30% for solar construction projects before the end of 2024.  Purchasers of pricy electric vehicles will receive generous rebates. 

The act changes the current law to give electric vehicle  purchasers an instant $7,500 credit on new cars and $4,000 on used EV's.  Under the old provisions, buyers applied for a tax rebate post-purchase. With the average cost of a new EV reaching  $66,000, few middle-income Americans will reap the benefits.

For an administration which thinks it needs a ministry of disinformation, the Inflation Reduction Act qualifies as misinformation. What little trust Americans had in government, has been ripped to shreds by this disguised legislation. Truth in legislation is an oxymoron in Washnington. 

Green Energy Runs Into Coal, Hard Facts

Washington is expected to spend $1 trillion to underwrite green energy production this year in an effort to reach the administration's goal of net zero emissions by 2050.  Even if the U.S. achieves its target, it might not reduce global emissions because coal plants are springing up like mushrooms everywhere.  

Although China is a signatory to the Paris Climate Agreement, its actions do not match its state-sanctioned support for the green agenda. China built more than three times as much coal plant capacity as the rest of the world in 2020.  This translates into more than one coal plant every week.  

A report by San Francisco-based think tank Global Energy Monitor and the Centre of Research on Energy and Clean Air documents China's thirst for coal power.  Research shows China grew its coal power by 29.8 Gigawatts (GW) while the rest of the world decreased capacity by 17.2 GW.

In 2021, China added more coal plants since 2016 as its power demands increased.  The world's most populous country has 1,100 coal fired power plants producing electricity.  That is nearly four times as many as the second-largest coal energy producer, India, which has 285 plants.  

Climate activists claim that because of the Paris agreement China has reduced its dependence on coal.  The country produces less of its total energy from coal than it did 10 years ago, dropping from 85% to 56%. But coal remains the chief energy source to power China. 

China not only is the biggest consumer of coal power, but the largest producer too.   China produced 4.7% more coal in 2021 than the previous year.  Coal companies churned out more than 3.7 billion tons.  The country's coal industry plans to significantly hike production this year, reports Chinese media.

Despite its efforts to reduce its dependence on coal, the Chinese are involved in building and funding more than 70% of all coal plants abroad.  Since 2013, China's Belt and Road Initiative has committed to $50 billion in financing for 26.8 Gigawatts of coal facilities in 152 countries. 

Chineses Banks are bankrolling 60 new coal plants across Eurasia, South America and Africa.  When those projects are completed, the coal facilities would emit about as much carbon dioxide as all of Spain. Ignore Chinese propaganda; the country is exporting pollution to other nations.

Carbon Tracker, a financial think tank, calculated that China, India, Indonesia, Japan and Vietnam plan to build 600 coal power plants. India with 285 coal plants generates more than 75% of its power needs through thermal coal. India has 39 thermal coal plants under construction with plans for more. 

No surprise to learn China is the world's biggest polluter.  The Communist nation contributed 21.4% of the world's greenhouse gasses, according to data from the World Resources Institute.  The U.S. ranks second with 12.5% of the global emissions.  India and the European Union are tied at 7% each.   

Weaning countries off coal is proving difficult because the demand for energy is soaring.  Electricity demand is projected to triple globally by 2050, a McKinsey report estimates.   Estimates are the electricity demand in the U.S. will jump 28.8% for the same period. 

With rising demand, America's push for green energy has paid dividends.  Wind turbines and solar accounted for about 20% of the electricity generated in 2021.  Including hydroelectric dams and nuclear, the total rises to nearly 40%.  But coal still produces 21% of electric power. 

Germany is a cautionary tale for adopting a green policy cold turkey without regard for the long-term impact on the economy.  Since 2000, the country shutdown coal plants, scuttled nuclear facilities and spent billions of dollars on renewable power, mostly wind and solar. 

However, those renewables are subject to intermittent output, meaning the country needs a dependable, alternative power source. For Germany, that has been Russian natural gas.  When Russia began cutting back supplies this year, Germany had no other option but to restart its coal fired plants.

Germany had planned to eliminate coal by 2030, but that target seems unachievable in light of the reactivation of coal plants.  The lesson of the German experience is that the shift to renewable energy cannot happen overnight and without fossil fuel backup power, electricity rationing is a certainty. 

With winter months away, officials in the country's second largest city Hamburg are warning warm water will only be available certain times of day. Across Germany, streets light are dimmed, water is rationed and swimming pools have been closed.  

Most Americans are on board with replacing fossil fuel electricity with green energy.  On the other hand, Americans want affordable, reliable energy.  This summer major electric grids across the nation are under stress sometimes because wind and solar are offline due to weather conditions.

America's appetite for wind and solar energy is growing, which is driving down the cost of each megawatt-hour of energy, making it more competitive with fossil fuels. But for the foreseeable future, fossil fuels will be required to meet the nation's rising energy demand.

GOP Overconfidence Spells Trouble in Midterms

Giddy Republicans are popping the champagne corks in celebration of a Red Wave in the midterm elections.  That over exuberance may prove their undoing in November.  While the GOP is in party mode, Democrats are building a war chest and sharpening their political rhetoric to pull an upset.

For months, President Biden's underwater poll numbers fed GOP confidence.  Scorching inflation, record gas prices, a porous border, and education issues foreshadowed a Red avalanche.  Early national polls showed voters preferred GOP control of the House and Senate. Happy times are here again. 

Republican also have history on their side.  The president's party usually loses 30 House seats in the midterms.  Democrats currently hold a thin majority in the House, 220-211.  If history repeats, the GOP would begin 2023 with a solid 241-180 majority.  But history can be fickle.  

Currently, the Senate is deadlocked 50-50, although Vice President Kamala Harris casts the deciding vote in the event of ties. There are 34 Senate seats up for grabs this year.  However, Senate control will likely hinge on closely contested races in 10 key states, where turnout will tilt the outcome. 

The latest Monmouth University Policy Institute poll offers a clear picture of voters issues. Inflation and gas prices are the chief concerns.  More than four in ten Americans told pollsters they are struggling financially.  Despite the Democrat drum beating, abortion is a priority for just 5% of voters. 

Beware: Some polls show abortion as a priority issue but those are not open-ended, where respondents select their own priorities. Democrat-sponsored research limits the choices for respondents, forcing survey participants to select from a narrow list of issues, which includes abortion.  

Irregardless,  Democrats insist the emotionally charged issue will motivate its voters to turnout in the midterms.  To up the ante, Democrats are disingenuously claiming the Supreme Court ruling on abortion also imperils gay marriage, racially mixed marriages and LGBTQ protections.

Democrats are also banking on smearing Republicans as extremists in the January 6 hearings.  Although former President Trump is the target, the House committee is crafting a narrative that many GOP House and Senate members were tangentially involved in the Capitol riots. Thus Republicans are fanatics.

As an extension of this strategy, Democrat fund raising committees are supporting Trump-endorsed GOP candidates in the primaries in hopes they will be easier to defeat in the midterms. Some Democrats are beginning to notice and are criticizing their party for being hypocritical. 

In light of the Democrat maneuvers, Republicans need to quit reading the polls and stop taking victory laps.  Elections are won in November and voters preferences can flip in a heartbeat. Instead of just regurgitating voter issues, the GOP must begin offering solutions.    

Voters want to know how Republicans will govern and what changes they will make.  This is especially important to woo independents as well as traditional Democrat voting blocs, such as Hispanics, Asians and African-Americans.  Voters are keen on a change of direction in the country.

Republicans need a clarion call that resonates with voters.  How about the American Prosperity Plan? GOP candidates for the House and Senate should rally around an action agenda that stirs voters passion. instead of just reminding voters who bad things are. Here are a few suggestions:

To deal with inflation, the GOP should vow to stop the Democrats inflationary spending.  Republicans should pledge to reject boondoggles with clever names, such as the Inflation Reduction Act. They should adopt a "no new spending" mantra and end government welfare for green industries.

Since the House controls the purse string, the GOP should argue for less spending on federal government agencies, which are expanding. Republicans should insist on across the board 5% budget  cuts at every Washington agency to reduce the federal budget.

Budget cuts would also be a way to reign agencies or in other cases reduce the size of regulatory bureaucracies.  A plan to eliminate the Department of Education, for example, would draw broad support. States have their own Departments of Education.  No need for another layer of bureauracy.

On taxes, Republicans should campaign on lowering tax rates for all Americans making less than $400,000 annually.  Such a promise would offer a stark contrast to the Democrats plans for raising personal and corporate taxes in the midst of an economic recession. 

The border issue reverberates in many key election states, such as Arizona.  Republicans should pledge to pass legislation to finish the border wall.  The suppliers and the construction materials have been paid, but President Biden halted construction.  No additional funding would be required. 

To address energy, Republicans would pledge to revive the GOP-backed Keystone XL bill that died in 2021 in the Democrat controlled House. The bill to authorize completion of the  construction on the oil pipeline, specified the project would not need a permit from the president. 

Health care costs are a factor in rising inflation.  Republicans, who had a chance to end Obamacare in 2016, should cap funding of subsidies for government health insurance, which enrich private insurers.  Another way to reduce health costs is to oppose further expansion of Medicare.

Some Democrats are no doubt shaking their heads in laughter. President Biden would veto any legislation that does not fit the Democrat agenda.  Actually, that would help Republicans draw a clear distinction between the parties on key issues for voters now and in the 2024 presidential election.

Listen Republicans.  Don't waste this opportunity by touting an investigation of President Biden and his son Hunter will be your first act.  That might fire up the base, but average Americans don't care. There will be a time to address the issue at some point.  For now, can the comments.

There will be a time for celebration.  But right now the priority is to unite GOP candidates under a broad agenda to restore American prosperity.  That's what voters want to hear.