Republicans use sleight of hand to blame Inflation Reduction Act for boosting prices

Republican vice presidential candidate JD Vance unveiled a new catchphrase in his quest to tie Democrats to inflation: Democratic presidential nominee Kamala Harris cast the tiebreaking vote for the "Inflation Explosion Act."

Vance said this on at least three recent occasions, including a Sept. 16 rally in Sparta, Michigan. "Kamala Harris cast the deciding vote on the Inflation Explosion Act," he said. "It’s the biggest driver of inflation in the United States today."

Vance, a U.S. senator from Ohio, is speaking rhetorically; the "Inflation Explosion Act" echoes the name of the Inflation Reduction Act. President Joe Biden signed the law after Harris, in her role as vice president, broke a tie as president of the Senate. Vance joined all Republicans in opposing the bill.

Other Republicans in competitive Senate races have similarly argued that the Inflation Reduction Act, contrary to its name, sent prices higher.

In Montana, Republican Tim Sheehy posted on X that his opponent, Democratic Sen. Jon Tester, voted for the "‘Inflation Reduction Act’ (which) increased inflation and drove prices sky high!"

In Pennsylvania, an ad by the pro-Republican Senate Leadership Fund targeted Democratic Sen. Bob Casey, saying Casey "promised us his vote 'will reduce inflation.'" It shows a clip of Casey saying those words in an August 2022 floor speech in favor of the Inflation Reduction Act.

The attacks are misleading.

After the Inflation Reduction Act passed, inflation didn’t rise; it fell. Although this was mostly for reasons other than the act itself, it undercuts the talking point. 

An earlier law passed by Democrats, the American Rescue Plan Act, is generally blamed for exacerbating inflation. The Republican messaging doesn’t focus on this law; it inaccurately hypes a different law with a catchier name.

Kevin Madden, a former presidential campaign aide to Sen. Mitt Romney, R-Utah, said Republicans are trying to turn the tables on Democrats by describing the Inflation Reduction Act as a spending bill that didn’t address the core drivers of inflation.

"Democrats, recognizing inflation is a core concern of many voters, have sought to claim credit for the current trend line on inflation — trending lower, though with a somewhat stubborn pace — by pointing to their support and passage of the Inflation Reduction Act as a key part of addressing those voter concerns," said Madden, now a senior partner with the Penta Group, an international communications and consulting company.

"Republican message efforts have sought to flip the script," Madden said.

Biden signed the Inflation Reduction Act on Aug. 16, 2022, following approval by Democratic-led party-line votes in the House and Senate. Its main provisions addressed reducing carbon emissions, letting Medicare negotiate over drug prices and boosting Internal Revenue Service funding.

When the law was signed, year-over-year inflation was 8.3%, not far below its June peak around 9% — the highest in about 40 years.

In June 2023, year-over-year inflation fell to 3%, and it has remained below 3.7% every month since. August’s 2.5% rate is similar to its prepandemic level and near the Federal Reserve’s 2% goal.

The Inflation Reduction Act didn’t actually play much of a role in reducing inflation since mid-2022.

The bill’s provisions may one day help keep prices down, such as enabling Medicare to negotiate some drug prices. But elements of the law were phased in over several years and could not have had a significant effect during 2022 and 2023, when most of the two-thirds decline in the inflation rate occurred.

Economists said Federal Reserve rate hikes, falling oil prices and an economic slowdown in China played more important roles in easing inflation over the past two-plus years.

Inflation’s easing after the bill’s passage undercuts claims such as Vance’s that the Inflation Reduction Act is "the biggest driver of inflation in the United States today."

If Vance and his allies had specified a different bill with a less ironic name, they would have had a stronger point.

The American Rescue Plan Act, which Biden signed as a pandemic relief bill shortly after he took office, included $1,400 direct payments to about 85% of Americans, $360 billion for state and local governments and $242 billion in expanded unemployment benefits.

As lawmakers worked on the measure, some economists, including Larry Summers, who directed the National Economic Council under former President Barack Obama, warned the bill would spark inflation. Fiscal conservatives joined in the warning.

Economists now widely agree that the critics had a point. They say the law put too much money in Americans’ pockets when the pandemic was hampering global supply chains, meaning too much cash was chasing too few goods and services. Because demand outstripped supply, prices surged.

However, most economists also agree that the American Rescue Plan didn’t alone cause inflation’s rise. The supply chain shortages, economists say, ignited the inflation increase, and Russia’s 2022 invasion of Ukraine — which prompted an oil price spike and other trade interruptions — worsened it.

The Senate Leadership Fund ad tacitly acknowledges the sleight of hand: On screen, the ad shows Casey discussing the Inflation Reduction Act on the Senate floor, but later says "Casey's vote made (inflation) worse" by offering a footnote that refers to the American Rescue Plan Act.

When we contacted the Trump-Vance campaign, Republican National Committee spokesperson Anna Kelly cited Harris’ role in enacting both the Inflation Reduction Act and the American Rescue Plan Act. 

"Kamala Harris was the tie-breaking vote on both the failed $1.9 trillion stimulus and Inflation Explosion Act — both of which caused prices to rise by 20.3 percent since Harris and Biden took office," Kelly said. "Everyday Americans don’t care which of Harris’ runaway spending proposals led to higher taxes and less money in their pockets."

Focusing on inflation alone ignores the parallel growth in wages, however.

Since August 2022, when the Inflation Reduction Act was passed, prices have risen by 6.4%, but wages have risen faster — by 8.5%. In other words, since the bill’s passage, consumers have come out ahead.