Moody’s: Schumer-Manchin deal will ‘nudge’ economy, inflation ‘in the right direction’
by Alexander Bolton - 08/01/22 3:08 PM ET
The deal announced last week by Senate Majority Leader Charles Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) will “nudge the economy and inflation in the right direction” and “meaningfully” address climate change, a new analysis by Moody’s Analytics found.
The analysis comes at a critical moment when Schumer and Manchin are hoping to persuade the last hold-out Democratic senator to support the deal: centrist Sen. Kyrsten Sinema (Ariz.).
The deal, which would raise $739 billion in new revenue, spend $369 on an energy security and climate investments, and pay down more than $300 billion in debt, is scheduled to come to the Senate floor this week, pending approval by the Senate parliamentarian.
Senate Republicans have attacked the bill, arguing it will worsen inflation and raise taxes on Americans across income brackets.
But Moody’s predicts the Inflation Reduction Act “will modestly reduce inflation over the 10-year budget horizon.”
The financial services company predicts the consumer price inflation index will be 0.33 percent lower by the fourth quarter of 2031 because of the bill.
“This translates into a reduction in CPI inflation of 3.3 basis points per annum on average over that period,” it said, projecting the legislation will have a “marginal” impact on inflation in the middle of the next decade but then become “more meaningful later in the decade.”
Moody’s says the legislation will curb inflation in several ways.
more
https://thehill.com/policy/finance/3582989-moodys-schumer-manchin-deal-will-nudge-economy-inflation-in-the-right-direction/
