One of those last-minute changes delayed the implementation of a Trump-era drug rebate rule, rather than repealing it completely. The repeal would have saved about $550 billion over the next two decades, CRFB estimated. Delaying the implementation until 2032, as the current law would do, will save the government only $150 billion. Altogether, CRFB estimates the IRA will reduce deficits by a little less than $1 trillion over the next two decades — about a third less than the original bill. But Goldwein says it’s not too late : CRFB is calling on the Biden administration to use its authority, through the federal rulemaking process, to cancel the rule for good, which they say would fulfill the original intent of the IRA. That would restore about $400 billion in cost savings, they estimated. We reached out to the White House, but no word on whether administration officials are considering the move. Also on the group’s radar? Student debt. A pause on student loan payments, first implemented during the pandemic, is set to expire at the end of the month, and the Biden administration hasn’t said whether or for how long it may extend it. An extension through the end of the year would cost the government about $20 billion — equivalent to the amount of deficit reduction expected in the first six years of the IRA, CRFB has warned. It would also likely fuel near-term inflation by putting more money in Americans’ pockets, though the magnitude would depend on the length of the pause, Goldwein said. The president is also contemplating canceling student debt for some Americans, which would likely cost the government more over the long term, but have less of an effect on price pressures, Goldwein said. “From an inflation perspective, the worst thing you can do is continue the pause, the second worst thing you can do is cancel a bunch of debt,” Goldwein said. Others aren’t so worried. White House officials have said they don’t see a short-term extension of the repayment pause or targeted debt forgiveness fueling higher inflation. Ending the repayment freeze in tandem with debt cancellation could even ease price pressures, Moody’s Analytics chief economist Mark Zandi said on Twitter Thursday . While debt cancellation could generate higher spending among some borrowers, he said, it would be more than offset by the disinflation from billions of dollars a month in debt payments resuming. Roosevelt Institute economists Mike Konczal and Alí Bustamante made a similar point in a new paper Wednesday that pushed back on CRFB’s conclusions. Among their arguments: there’s very little evidence that increases in wealth — which would result from debt cancellation — have led to higher spending so far in this recovery. IT’S FRIDAY — Maybe grab a cold one from the fridge later today. Or a bottle of something best served chilled. And if that beverage gives you an idea, send us a tip (or story idea, or feedback) at kdavidson@politico.com, ssutton@politico.com or aweaver@politico.com.
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