A Slimmed-Down “Build Back Better”

President Biden has signed a slightly slimmed-down version of his “Build Back Better” bill called the Inflation Reduction Act into law. Brendan Cullerton reports:

WASHINGTON (Gray DC) – President Joe Biden signed the Inflation Reduction Act into law Tuesday, August 16.

Biden said measure will allow spending on combating climate change and improving healthcare at the expense of increasing taxes on large corporations and drug manufacturers.

“The American people won, and the special interests lost,” the president said.

The $750 billion extends subsidies as part of the “Affordable Care Act,” reduces Medicare drug prices, and provides tax credits for clean energy items like solar panels.

Let’s hope that the act achieves the objectives set for it.

One of the major developments that increasingly separates how modern businesses operate from the way that government operate is that projects that follow best practice have clear statements of their objectives (a “charter”) and ways of measuring whether they are accomplishing those objectives (“key performance indicators” or KPIs).

Identifying and committing to such details is rare in government programs. One of the consequences of that is that there are government programs that have been around for more than a century without a great deal of evaluation as to whether they’re working or even needed.

As an exercise let’s define some objectives for the Inflation Reduction Act and provide some KPIs for it. It’s not easy to synopsize a 273-page bill so let’s just use three of the objectives that have been widely publicized.

The objectives of the Inflation Reduction Act are to

• Reduce the rate of inflation as measured by the revised CPI by 1 percentage point over 5 years.
• Reduce the temperature based on the United Nations climate model by 1% over the next 5 years.
• Reduce the price of prescription drugs in the United States as measured by the MIDAS index by 1 percentage point over 5 years.

Are those its objectives? If not what would the correct ones be?

Both the Congressional Budget Office and Penn-Wharton think that the likelihood of the IRA actually reducing inflation is negligible. Those who have plugged the imputed impact of the IRA into the UN climate model have found that it didn’t do much there, either.

What are the key performance indicators for those objectives?

Please leave your own charters for the IRA and its KPIs in comments.