Inflation reduction act: what it actually means

There has been a lot said about the inflation reduction act. Questions around the act is will it work? Is it working? What will be the economic outcome and more. But, nothing speaks more than when a proponent of the act begins to tell the public what it’s truly about.

During an interview aired on Tuesday’s broadcast of NPR’s “All Things Considered,” Treasury Secretary Janet Yellen said that the investments in the Inflation Reduction Act “are mainly geared toward the longer-term issues around climate change.”

The npr host Ailsa Chang asked, “I do take your point that the new Inflation Reduction Act does a lot to promote green energy, promotes cleaner cars, tries to address healthcare needs. But it doesn’t do much to fix inflation in the short term, which is really the Federal Reserve’s job. Are you concerned that this will set people up for disappointment?”

This is the point many republicans and conservatives have brought up that the inflation reduction act does nothing to address the needs of inflation but is the green new deal renamed. This is also why almost every republican voted against it

Yellen responded, “Well, look, we have to address both short-term problems and longer-term problems. And the investments in this historic legislation are mainly geared toward the longer-term issues around climate change, although the Inflation Reduction Act will significantly lower the cost of drugs and health insurance. And those are short-term gains that offset some of the other cost of living increases that Americans are experiencing. And we’re doing other things that are supportive of the Fed’s efforts.

“We’ve had historic releases of oil from the Strategic Petroleum Reserve, and Americans have now seen gas prices fall substantially off their peak.” Although most of this gas actually went to China and not the American people. She went on to say, “We are trying to also address the cost of oil here and globally by imposing, with our G7 allies, a cap on the price of Russian oil. So, we’re taking complementary actions but recognize the Federal Reserve primary role to play here.”