Pelosi: “We’ve Never Spent This Much” on Inflation Reduction Act; Penn Wharton: “Low Confidence” It Reduces Inflation; Advisor Told to “Acknowledge Their Pain”

On 7/30/2022, Pelosi marveled at the Inflation Reduction Act saying “we’ve never spent this much, not even as much as we originally had — we’ve never invested this much.” The Penn Wharton Budget Model — the same one Senator Manchin had relied on — projected “low confidence” the bill would reduce inflation and even predicted a “small inflation increase” in the first two years. A White House economic advisor was told on live TV to “just acknowledge their pain” after insisting America wasn’t in a recession despite two consecutive quarters of GDP contraction. An economist put recession odds at “over three-quarters."

"We’ve Never Spent This Much”

Pelosi’s enthusiasm about the spending bill’s scale undercut the claim it would reduce inflation. “I learned what was in there — it was just transformational. We’ve never spent this much, not even as much as we had originally. We’ve never invested this much in such an important way,” Pelosi said.

The name itself drew skepticism. “We like to call it the Inflation Reduction Act. I’m aware — that’s the name of the bill. And because it does fight inflation,” KJP said.

Penn Wharton: “Low Confidence”

A reporter cited the Penn Wharton Budget Model — significant because Manchin had previously used it to justify opposing Build Back Better. “Penn Wharton found low confidence that the legislation will have any impact on inflation and even projected a small inflation increase in the first two years,” the reporter said.

“Senator Manchin has leaned on this model before to guide his support or opposition. How does this square?” the reporter asked.

KJP cited other economists. “Joseph Stiglitz said the compromise is a step forward. And that’s how we see it as well,” she said.

A reporter pressed on what the bill actually addressed. “This bill doesn’t address rising home costs, rent, food, and gas. Does the president think this is kind of it — this is what he can get legislatively from this Congress on inflation?”

“It is the only legislation out there in Congress that’s going to fight inflation. We need to move forward to get this done,” KJP said.

”Acknowledge Their Pain”

A White House economic advisor got into a heated exchange on CNN after insisting the economy was not in recession despite two consecutive quarters of negative GDP growth.

“Why, when you say we’re not in a recession, Americans hear that and think you’re out of touch? You almost make it sound like ‘let them eat cake’ — except the cake’s double the price,” the interviewer said.

“Except I didn’t. Except we aren’t, and I didn’t,” the advisor responded. “Every family is the greatest expert of their situation. People feel squeezed or even a gut punch.”

“They feel it’s a recession, Gene. When they go to the gas pump, they feel that,” the interviewer pressed.

“I don’t know what words they want to use to describe it, but we understand people feel the gut punch,” the advisor said.

“Gene, just acknowledge their pain. If you don’t want to call it a recession, fine. But acknowledge their pain,” the interviewer said.

Recession Odds “Over Three-Quarters”

An economist was blunt. “I would assume it’s more likely than not we’re going to have a recession if we’re not already there. I think the odds are very high — perhaps over three-quarters,” the economist said.

“It’s been two quarters in a row of negative GDP growth. That is an ugly fact. Traditionally, that has been the colloquial way a recession has been defined,” the economist continued.

The White House maintained its position. “For many people, even though it’s not the accurate definition, that has been a colloquial definition,” the advisor conceded — while insisting the economy was in “transition,” not recession.

”When Does the Transition End?”

A reporter asked the obvious question. “When can Americans expect that transition to be over?”

“It’s happening currently right now. That is what we’re stepping into. We see a little bit of a cooling with the jobs numbers,” KJP said. “Secretary Yellen explained this very well, much better than I am, because she is an economic expert.”

Key Takeaways

• Pelosi said “we’ve never spent this much” on the Inflation Reduction Act — while the Penn Wharton model projected “low confidence” it would reduce inflation and predicted higher inflation in the first two years.
• A White House advisor was told on live TV to “just acknowledge their pain” after repeatedly insisting the economy wasn’t in recession.
• An economist put recession odds at “over three-quarters” — with two consecutive quarters of negative GDP growth as “an ugly fact.”
• The bill didn’t address rising home costs, rent, food, or gas — but KJP called it “the only legislation out there that’s going to fight inflation.”
• KJP described the economy as in “transition” and said the cooling was “happening currently right now.”

Transcript Highlights

The following is transcribed from the video audio (unverified — AI-generated from audio).

• We’ve never spent this much. We’ve never invested this much in such an important way.
• Penn Wharton found low confidence the bill will have any impact on inflation — even projected a small increase in the first two years.
• They feel it’s a recession, Gene. Just acknowledge their pain.
• The odds are very high, perhaps over three-quarters, that we’re going to have a recession.
• This bill doesn’t address home costs, rent, food, gas. Is this it legislatively? It’s the only legislation out there.
• When does the transition end? It’s happening currently right now.

Full transcript: 889 words transcribed via Whisper AI.