SPX3,655.04-38.19 -1.03%
DIA292.72-3.14 -1.06%
IXIC10,802.92-65.00 -0.60%

UPDATE 1-Biden celebrates 'Inflation Reduction Act' as food, rent prices climb

UPDATE 1-Biden celebrates 'Inflation Reduction Act' as food, rent prices climb

Reuters · 09/13/2022 14:14
UPDATE 1-Biden celebrates 'Inflation Reduction Act' as food, rent prices climb

Adds inflation data, Biden statement

By Jeff Mason

- President Joe Biden celebrates his climate change and drug pricing law, The Inflation Reduction Act, on Tuesday on the White House lawn, to highlight Democrats' commitment to progressive priorities even as high consumer prices continue to bite.

Biden signed the $430 billion bill, seen as the biggest climate change package in U.S. history, into law last month in a low-key ceremony.

The Tuesday event on the White House South Lawn will bring together hundreds of CEOs, lawmakers, activists and interest groups who supported it, and give Biden an opportunity to tout drug price caps, electric vehicle grants and a minimum corporate tax, key issues for his political base.

However, the event coincided with the release of Labor Department figures that showed an unexpected August rise in U.S. consumer prices, as rent and food continued to climb. The economy continues to be the biggest issue for voters ahead of the November midterm elections, posing risks for Democrats trying to maintain control of Congress.

"It will take more time and resolve to bring inflation down, which is why we passed the Inflation Reduction Act to lower the cost of healthcare, prescription drugs and energy," Biden said in a statement.

Rating agencies Moody's Investors service and Fitch Ratings told Reuters last month they expect the bill to cut inflation, but over the medium to long term, this year.


The president will use the event to take aim at Republicans, who didn't support the bill. Biden will say his opponents "unanimously opposed lowering costs for the American people," the White House said in a preview of his remarks.

Republicans suggest the legislation will lead to higher energy prices and aggressive audits from the Internal Revenue Service.

In addition to providing incentives for the clean energy industry, the law allows Medicare to lower drug prices for the elderly, seeks to ensure corporations and wealthy people pay their taxes through beefed-up IRS resources, and aims to combat inflation by reducing the federal deficit.

Biden had hoped to secure a trillion-dollar-plus "Build Back Better" bill with measures to fight global warming and tackle other social issues but could get it through the 100-member U.S. Senate, which is evenly divided between Democrats and Republicans and whose rules require 60 votes to advance most legislation.

Support from and concessions to Senator Joe Manchin of West Virginia, a conservative Democrat who supports fossil fuel projects and opposed the more expensive bill, helped get the Inflation Reduction Act passed. At the Aug. 17 signing ceremony, Biden gave Manchin the pen he used to sign the legislation into law.

As a presidential candidate Biden promised to make fighting global warming a top priority, returning the United States to the international Paris climate accord, from which Republican President Donald Trump had withdrawn. He also pledged to prioritize clean energy, electric vehicles, and lower greenhouse gas emissions.

Younger, left-leaning voters are especially eager to fight climate change, and the president has sought to appeal to them ahead of the congressional elections in November in which Democrats risk losing control of the House of Representatives and Senate.

(Reporting by Jeff Mason; Editing by Tim Ahmann, Heather Timmons, Gerry Doyle and Aurora Ellis)

((jeff.mason@thomsonreuters.com; +1 202 898 8300; On Twitter: @jeffmason1; Reuters Messaging: jeff.mason.thomsonreuters.com@thomsonreuters.))