Iowans are paying $5,000 more per year under inflation, are Democrats to blame?

Republicans have blamed Democrats a lot for rising inflation this past year. Democrats, after all, are in power at the White House and both chambers in Congress and this is an election year.

Thus, Rep. Zach Nunn, R-Bondurant, who is seeking a seat in Congress, brought it up in a recent tweet that introduced a campaign ad that attacks his opponent in Iowa’s 3rd District race, incumbent Democratic U.S. Rep. Cindy Axne, for out-of-control spending in Washington, D.C.

"Iowans are paying $5,000 extra for everyday goods under Biden and Axne’s inflation," the tweet stated.

We examined a couple of things in that statement: that Iowans will pay an extra $5,000 this year because of inflation and that Biden and Axne can share some of the blame for that inflation. 

We start with the numbers. Contacted by Politifact Iowa, Nunn’s campaign said they were taken from a March report by Bloomberg News. The report states that by, Bloomberg’s calculations, Americans would pay $5,200 more on average this year for goods using the Personal Consumption Expenditures index. This number is an estimate of inflation throughout 2022 and could be different at the end of the year. 

Inflation can be measured across other time periods so other measures exist, depending on where you live and from when you measure the rise in consumer good prices. A July report from the Republican side of Congress’ Joint Economic Committee went back to January 2021 — when Biden took office — to state that Iowans were projected to pay $7,997 more this year than they would have for the same goods back then, for a state inflation rate of 13.7% since the start of 2021. 

The U.S. Bureau of Labor Statistics, whose announcements get widespread news coverage, reports Consumer Price Index inflation every month, measuring against the past 12 months. The bureau reported an August rate of 8.1% in the Midwest region for the previous 12 months. That would amount to a yearly increase in costs from August 2021 to August 2022 of $4,176, using the Consumer Price Index report from the Bureau of Labor statistics for the Midwest region. 

Next, who's to blame. Nunn’s campaign, when contacted by Politifact Iowa, stood by its claim that Democrats are to blame for inflation. The campaign ties Axne to Biden by pointing out accurately, according to the FiveThirtyEight data analysis website, that Axne has voted with Biden 100% of the time during Biden’s term as president. 

We have looked previously at claims that tie inflation to Biden. Sources in an April 2022 Politifact story said that, although the American Rescue Plan Act, a stimulus package passed in 2021 that cost about $1.9 trillion, added 2 points to inflation, international pressures and supply chain issues had a greater impact on inflation. 

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Marc Goldwein, with the Committee for a Responsible Federal Budget, a group that promotes lower deficits, said in that PolitiFact story: "With no American Rescue Plan, we would still have inflation above the Federal Reserve’s target of 2% to 3%."

None of the experts PolitiFact talked with for the April story, liberal or conservative, said Biden’s actions were responsible for all of the inflation. 

Sources cited in other PolitiFact stories have said that supply chain disruption, low supply of goods and  international market pressures have contributed to inflation. Financial experts in a June New York Times story said strong demand, supply shortages and the aforementioned factors on the service industry also are major pressures on inflation. 

In a letter to congressional leadership, 126 economists wrote that the Inflation Reduction Act will have a downward pressure on inflation after a short-term upward pressure when the bill was first passed. The letter was obtained first by CNN. 

Stanford University economist John Taylor and others have said that the Federal Reserve’s fiscal policy during the COVID-19 pandemic could be a factor. That policy aimed to artificially stimulate the economy by keeping interest rates lower than usual. However, the Fed operates on its own, not by Democrats or, when they are in power, Republican partisans.

Democrats blame inflation on international pressures such as the war in Ukraine. President Joe Biden said in May blamed inflation on Russia’s invasion of Ukraine. The war is affecting supply chains but the full impact will not be known for a while. Some countries have higher rates of inflation than the United States, with Turkey having an inflation rate of 54.8%, according to the Pew Research Center. 

Wendy Edelberg, director of The Hamilton Project and a senior fellow in economic studies at the Brookings Institution, said in a Politico story that the supply chain disruption caused by the war in Ukraine is impactful but not the whole story of why inflation is rising internationally. 

Nunn’s campaign said Iowans would pay $5,000 more this year because of inflation, and that Democrats were to blame. 

Bureau of Labor Statistics data shows that Iowans will pay $4,176 more on household goods this year because of inflation, based on a bureau report for the Midwestern region going back to August 2022. The $5,000 figure comes from an estimate that Bloomberg News analysts predict for 2022. But it is an estimate. We must wait to see how close the prediction was to what happens.

The effect the American Rescue Plan ultimately will have on inflation has yet to be determined but it is having some effect, analysts said. But, solely blaming Democrats for inflation does not take into account the whole picture. Supply shortages and strong demand for products, supply chain problems and international market pressures combine with federal monetary policies to affect inflation. We rate the statement Half True.