President Biden on Tuesday hosted a White House celebration to mark the passage of the sweeping Inflation Reduction Act against an unhappy backdrop: a tumbling stock market that fell on the news that consumer prices rose in August.
Biden, in remarks to a crowd of more than 1,000 people, called the bill the “single most important legislation passed in the Congress to combat inflation, and one of the most significant laws in our nation’s history, in my view.”
“With this law, the American people won, and special interests lost,” Biden declared.
It was a jovial mood on the South Lawn, where lawmakers, activists and administration allies gathered and musician James Taylor performed before Biden took the stage. Taylor called it a “hopeful moment” in a break between songs and urged collaboration to fight climate change.
But the party-like atmosphere masked the reality that Biden must still manage a precarious economy that threatens his positive message heading into the midterms.
The consumer price index (CPI), a closely watched gauge of inflation, rose 0.1 percent in August after staying flat in July, according to data released Tuesday by the Labor Department.
Economists expected the steady decline in gas prices throughout last month to lead to a 0.1 percent decline in monthly inflation, but prices for food, electricity and other products kept rising.
The worse than expected inflation numbers sent the stock market tumbling. The Dow Jones dropped more than 1,200 points, while the S&P 500 had its worst day since June 2020.
Inflation has for months been a thorn in the side of Biden and Democrats, providing fodder for Republican attacks and sinking Biden’s approval ratings. But with the passage of the $740 Inflation Reduction Act with all Democratic votes and months of falling gas prices, Biden and his party have finally felt like they can run on good economic news.
“We’re making progress,” Biden said in high inflation, touting that gas prices have decreased. “We’re getting other prices down as well.”
The legislation has already been used as a top achievement that Democrats are pointing to on the campaign trail ahead of the midterms.
“Inflation Reduction Act, so beautifully named for all it does,” Speaker Nancy Pelosi (D-Calif.) said.
Democratic lawmakers in the audience included Sens. Joe Manchin (D-W.Va.) and, Kyrsten Sinema (D-Ariz.), as well as Reps. Pramila Jayapal (Wash.), Ayanna Pressley (Mass.), and Sean Patrick Maloney (N.Y.), head of the democratic congressional campaign arm.
White House press secretary Karine Jean-Pierre said at a briefing Tuesday prior to Biden’s speech that the inflation data shows how “critical” it is that the White House host the IRA event on Tuesday. She stressed that the bill is a “huge historic win” and called it a win for consumers.
Asked if the White House was concerned about a disconnect between the celebratory mood on the South Lawn and the rising prices that are a problem for many Americans, Jean-Pierre argued the focus should be on how Democrats were able to take on pharmaceutical companies to lower drug costs and bring down energy costs for families.
“That is why Democrats and this president have to do the hard work to lower costs in health care to lower cost of prescription drugs and also energy costs as well,” she said.
Republicans, for their part, took aim.
“Biden and Democrats throwing themselves a party for raising taxes on families during a recession proves just how out-of-touch they are,” GOP chairwoman Ronna McDaniel said in a statement.
“After ramming through the Bidenflation Scam bill under the guise of reducing inflation it is clear Democrats don’t care about lying to the American people, they only care about power,” McDaniel said. “This November, voters will be the ones celebrating when Democrats are voted out.”
Biden officially signed the bill at a smaller event at the White House last month, during which the president handed the first pen off to Manchin. The bill was passed via the reconciliation process, garnering zero Republican votes in either chamber of Congress.
Majority Leader Charles Schumer (D-N.Y.) called out Republicans for not voting for the bill, accusing them of focusing on abortion issues as opposed to high inflation, which drew ‘boo’s!’ from the audience.
“That’s the difference between the two parties in a nutshell,” the leader said.
Biden also called out Republicans for not voting for this legislation, despite bipartisan efforts on other bills like the infrastructure law and the CHIPs act.
The legislation, which was over a year in the making, was significantly slimmed down from the original $3.5 trillion package some envisioned last fall, but nevertheless represents an undeniable win for Biden and Democrats in Congress that includes some of Biden’s key campaign promises.
By 2030, the law is expected to bring U.S. planet-warming emissions down to lower than they were in 2005 through many of its provisions to promote the deployment of clean energy. It also contains provisions that boost fossil fuels, which were included to secure the support of Manchin.
Additionally, it will allow Medicare to negotiate prices for some drugs and shore up health insurance subsidies, giving Democrats a victory over a pharmaceutical industry that has long opposed such measures.