(CNN) — Democrats’ package of measures in Congress on climate and health care is getting a boost from a group of high-profile economists, who wrote in a new letter that the so-called Reducing Inflation Act will lower prices for American consumers amid high inflation.
“This landmark legislation makes critical investments in energy, health care and strengthening the nation’s tax system. These investments will fight inflation and lower costs for American families, while laying the foundation for strong, stable and sustainable economic growth.” widely shared in the long term,” 126 economists said in a letter sent Tuesday to congressional leaders, first obtained by CNN.
The letter is signed by key economists, including former Clinton Treasury Secretary Robert Rubin and Obama Treasury Secretary Jack Lew; the chief economist of the Obama Department of Labor, Betsey Stevenson; Moody’s Analytics Chief Economist Mark Zandi; the former director of the Congressional Budget Office, Doug Elmendorf; and Nobel Prize-winning economist Joseph Stiglitz, among others.
“Late last week, some of the signatories contacted each other to discuss how they could highlight the economic value of the bill and tackle the economic misinformation surrounding it,” said a source familiar with the letter.
Economists highlighted the bill’s historic $369 billion investment in combating the climate crisis and, they wrote, will “quickly and dramatically reduce health care costs for families” by allowing Medicare to negotiate certain drug prices. along with expanding Affordable Care Act subsidies.
Those investments, the group wrote, “would more than pay for themselves,” noting its willingness to impose a minimum 15% tax on certain corporations.
“This proposal addresses some of the country’s biggest challenges on a significant scale. And because it reduces the deficit, it does so while putting downward pressure on inflation,” the economists said.
This relief comes at a time when prices continue to rise, with inflation hitting 40-year highs. The latest data from the Bureau of Labor Statistics shows that inflation spiked in June to a pandemic-era high, with US consumer prices rising 9.1% year-on-year.
The bill, negotiated by moderate Democratic Senator Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer of New York, is currently undergoing a technical process in the Senate known as the “Byrd Bath,” a test designed to keep extraneous provisions out of the legislation using the reconciliation process. Once the legislation has gone through that process, Democrats should be able to pass the bill with a simple majority.
It remains to be seen, however, whether Sen. Kyrsten Sinema, a moderate Democrat from Arizona, will vote with her party on the legislation.
Schumer said Monday that he hopes the parliamentary process is complete and the Senate votes on the bill this week before the August recess.
“This week, the Senate will take action on groundbreaking legislation, the likes of which we haven’t seen in decades,” he said on the Senate floor. “In the coming days, both sides will continue discussions with the congressman to move the bipartisan ‘Byrd Bath’ process forward. Our timetable has not changed, and I look forward to bringing this legislation to the full Senate floor to begin a vote on it this week.”
Some economists have said the legislation would do little to curb rapidly rising prices, especially in the short term. Moody’s Analytics estimates that the legislation would have a “small” impact on inflation, and the Penn Wharton Budget Model also indicated that it would have little impact on prices.
And Senate Republicans who oppose the legislation point to an analysis by the nonpartisan Joint Committee on Taxation, which said the bill would raise taxes on Americans.
Kimberly Clausing, one of the letter’s signatories and an economist at UCLA Law School, disputed the JCT’s analysis, suggesting in a tweet that it was incomplete.
“Many key factors are left out of these tables, including, importantly, the effects of deficit reduction, the positive effects of spending on clean energy, and the benefits of lower drug prices,” Clausing wrote.
CNN’s Tami Luhby, Matthew Egan and Ali Zaslav contributed to this report.