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The Senate’s passage of the Inflation Reduction Act is a major legislative victory for the Biden administration and it comes after months of negotiations on Capitol Hill. Brian Deese, chair of the National Economic Council and President Biden's top economic adviser, joins Judy Woodruff to discuss.
The passage of the Inflation Reduction Act is a major legislative victory for the Biden administration, and it comes after months of negotiations, as we have heard, on Capitol Hill.
Joining me to discuss it all is Brian Deese, chair of the National Economic Council and the president's top economic adviser.
Brian Deese, welcome back to the "NewsHour."
As we have been saying, this is only a fraction, maybe a fourth of what the administration originally asked for last year. But, at this point, what is this going to mean if it becomes law for the country and for the Biden administration?
Brian Deese, Director, National Economic Council:
Well, thanks for having me.
This is a truly historic piece of legislation. For decades in this country, we have been talking about doing something about prescription drug prices. This bill would allow Medicare to negotiate lower prescription drug prices for the first time. For decades, we have been trying to do something to address climate change. And this bill would make the largest single investment in climate change and energy security ever.
And it will do both of those things in a way that actually reduces the federal deficit, which is what we need right now economically to try to help reduce inflation as well.
So what this is going to mean for American families is lower prescription drug prices, lower health care costs, lower energy bills across time, and the Congress and the president together acting to try to reduce inflation as well.
That's an impressive list.
The title of the bill, though, Brian Deese, is the Inflation Reduction Act. The Congressional Budget Office took a look at this, as you know. And what they came up with is, they say it's likely to change the inflation rate by less than a tenth of 1 percent over a few years. And they're saying they're not sure whether the change is up or down.
So is it fair, do you think, to call it inflation reduction?
I think it is.
Look, economists who have looked at this closely, including former Treasury secretaries from both political parties, have come to the conclusion that this would help on easing price pressures throughout our economy.
But let me explain why that's the case. First, it will lower costs for families. So the families who are struggling with high prices will face lower costs. As early as just this fall, 13 million Americans will see their health insurance come down as a result of this bill.
And, second, by reducing the federal deficit, that is complementary to what the Fed is trying to accomplish and will help reduce prices. And, third, and importantly, by increasing the supply, supply of energy in particular, in this country, while moving us toward clean energy, we're going to reduce price pressures overall.
We had the CEOs of utility companies here. And they said, the principal impact of passing these long-term tax credits, for example, for clean energy is that they pass those directly on to rate-payers, meaning a customer who's getting the utility bill is going to see that benefit on her utility bill.
So, I think, across the board, in practical terms, it means lower costs for consumers. And, in economic terms, it's going to mean reduced price pressures across the economy.
I'm asking you about what this is going to mean for ordinary Americans and whether most Americans are going to feel this, because we heard Senator Bernie Sanders say on the floor of the Senate — and I'm quoting him — "This bill does nothing to address the greatest financial challenges facing families in this country."
Well, look, we're working across the board to address the financial challenges that families face.
And, as you and I have talked about before, there are things like gas prices that are front and center for American families. We have made a lot of progress on that front, seeing gas prices down by almost $1.
But, in very practical terms, this piece of legislation will make a big difference for families in areas that are really consequential to their lives. Prescription drugs and the costs that that faces for families, that's a big deal, particularly for families that face — have a member of the family who has a chronic condition.
This bill would cap the out of pocket costs for Medicare recipients and those with chronic conditions at $2,000. That's a big game-changing deal. For people who have health insurance and are wondering this fall whether they're going to see their premiums jump up in the Affordable Care Act, this bill is going to provide, as I said, 13 million Americans the security to know that they're going to be able to keep those health insurance premiums low.
And for people who sit around the kitchen table and think about how to make their monthly bills add up, things like prescription drugs and health care premiums and their utility bills and energy costs, those are meaningful in their lives.
Well, you — and you also mentioned clean energy here.
But we know that also in this legislation is — are provisions that are going to provide for more oil and gas exploration in the country. I think people are trying to understand what the balance is here, more fossil fuels, but clean energy. How do you square that?
Well, I think what's most important for people to understand is that this bill puts the United States on a path to meet its climate commitments by the end of this decade.
And for the first time in decades, the United States, if this bill is signed into law, will be in a position where we can clearly and credibly say that we will meet our climate commitments. The way it does so is to provide long-term incentives, technology-neutral incentives, to invest in cleaner and lower emissions technologies across the board, from wind and solar, to storage, hydrogen, carbon capture.
These are the technologies that are going to drive us to a lower-emissions economy. And, also, they are the technologies that, if we develop them, we innovate here in the United States, we can export to the world. That means more jobs. It means more manufacturing capacity here in the United States.
But, ultimately, it means that we can hit our climate commitments as a nation, and then we can hold other nations to account to hit theirs as well.
Two other very quick questions, Brian Deese.
You said this is going to reduce the deficit. But the Committee for a Responsible Federal Budget looked at this, and they said yes, yes, but only by a very small amount, $25 billion over the next five years, which is, they said, a drop in the bucket.
Well, look, over the next 10 years, this bill will reduce the deficit by about $300 billion. And just to put that in context. That will come on top of the fact that, already this year, the deficit is down $1.7 trillion. So this is deficit reduction that will build on a record of reducing the deficit.
And I wouldn't downplay the significance of that, particularly at a moment where our economy is facing the price challenges that we — that we are facing. Demonstrating that we can continue to make progress on deficit reduction is important part of this bill.
Finally, the last thing I want to ask you is, we know some of the richest Americans, hedge fund executives, private equity executives, virtually untouched by this because of provisions that were taken out.
But what are some provisions that were in there originally that the administration, that the president would like to come back to in months to come?
Well, on the tax side, let me start with what's in there.
We will now for the first time have a minimum, tax so that the largest corporations in the country, those with more than a billion dollars in income, will have to pay a 15 percent minimum attacks, which is a matter of basic fairness and good tax policy. And we will be able to get that done if this bill is signed into law.
Look, There are other provisions that the president feels strongly about, particularly making sure that the highest-income individuals, the billionaires of this country, are also paying a reasonable amount as well.
And we have got a number of proposals on that front. Still have work to do on. That will be work remaining once we get this bill enacted into law.
All right, we are going to leave it there.
Brian Deese, who is a chief economic adviser to the president, thank you.
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