Sen. Joe Manchin (D-WV) is an odd duck. He’s not a far-left ideologue like Rep. Alexandria Ocasio-Cortez (D-NY) or a crony politician like House Speaker Nancy Pelosi (D-CA). Manchin’s pattern of politics is harder to follow because there isn’t really a consistent pattern. He’s unpredictable.
Until now.
Manchin has unveiled a monstrous, 725-page, $700 billion spending bill negotiated behind closed doors with Senate Majority Leader Chuck Schumer (D-NY). Now, we understand Manchin: He’s gullible. Manchin and Schumer issued a joint statement about the so-called “Inflation Reduction Act of 2022” claiming it will “fight inflation, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030.”
It will do no such thing.
In fact, the Democrats are peddling lie after lie, claiming the bill will fight inflation, reduce the deficit, make healthcare more affordable, and increase energy supply, all without raising your taxes. Every one of those claims is an audacious falsehood.
Manchin himself claimed his bill “didn’t raise taxes.” There aren’t enough Pinocchios in the world to rate this claim false. The reality is the Manchin/Schumer bill raises taxes on everyone who makes over $30,000 a year. 50% of the tax increases in the Manchin/Schumer bill will target people making less than $400,000 a year. Does that last number sound familiar?
“Nobody making under 400,000 bucks would have their taxes raised, period, bingo.” That’s candidate Joe Biden on CNBC’s Squawk Box on May 22, 2020.
Biden lied.
According to the Joint Committee on Taxation, “In 2023, taxes will increase by $16.7 billion on American taxpayers earning less than $200,000 — a nearly $17 billion tax targeted solidly at low- and middle-income earners next year.” JCT adds, “The proposal would raise another $14.1 billion from taxpayers earning between $200,000 and $500,000.” Keep in mind, JCT data show that 98% of tax returns in the $200K-$500K bracket are those earning less than $400K.
The Manchin/Schumer spending bill won’t make healthcare more affordable, either. The bill extends the Obamacare subsidies, which were set to expire, for three more years. But it’s within this provision that the nastiest lie occurs. The bill collects revenue (aka taxes) for 10 years. But it only extends the Obamacare subsidies for three years. The Democrats claim this math adds up. But what happens when the subsidies run out in three years? Congress will obviously extend them again. So where is the money to pay for the subsidies coming from? 10 years of taxes to pay for three years of subsidies. This shady math is where the Democrats claim the bill reduces the deficit. That’s deliberately misleading.
Even the Penn Wharton Budget Model admits, “Under an illustrative scenario where that provision was extended indefinitely, the 10-year deficit reduction estimate falls to $89 billion.” As Sen. Pat Toomey (R-PA) added, “They are also counting huge amounts of additional tax revenue from giving more taxes, money, to the IRS, which the [Congressional Budget Office] does not agree with. They’re also not taking into account how much our economy will slow down from this big corporate tax increase that will mostly hurt manufacturing and domestic investment.”
As for the name of the legislation, that is also a big fat lie. The reality is, until 2024, inflation is expected to increase due to this spending bill, then reduce in such a statistically insignificant way that it’s indistinguishable from zero, prompting the Penn Model to mention “low confidence that the legislation will have any impact on inflation.”
Who will be hurt by the bill?
You will. It contains a corporate tax hike, which history shows us causes companies to pass on the increased cost of their goods and services to consumers (which hurts middle- and low-income families the most). It also causes businesses to cut investment, jobs, hours, and benefits. But don’t worry, while you’re hurting, Democrats will spend $80 billion earmarked in this bill to double the size of the IRS to make sure you’re paying every penny they can squeeze from you.
That Manchin fell for all the lies about this bill is frustrating. Hoping voters will be as gullible is infuriating. Let’s hope Sen. Kyrsten Sinema (D-AZ) is able to torpedo this monstrosity.
Liz Wheeler hosts The Liz Wheeler Show, a popular conservative podcast.
