GOP campaign group distorts the timeline to blame Inflation Reduction Act for spiking inflation

A Republican political action committee used a deceptively edited clip to claim Sen. Bob Casey, a Democrat running for reelection in Pennsylvania, cast a vote that led to surging inflation. 

"Two years ago, Bob Casey promised us his vote will reduce inflation," the ad that began airing Sept. 17 said.

The ad included an August 2022 clip of Casey speaking in favor of the Inflation Reduction Act,  saying the bill "will reduce inflation."

"Casey’s vote for reckless spending didn’t reduce inflation," the ad said, "it made it worse."

But an on-screen footnote pointed to Casey’s vote on the earlier American Rescue Plan, not the Inflation Reduction Act. Congress passed the American Rescue Plan more than a year before Casey made the comments quoted in the ad; President Joe Biden signed it into law in March 2021. 

The ad's distorted timeline conflated two pieces of legislation and falsely attributed Casey's vote on the Inflation Reduction Act with increasing inflation. It leads viewers to believe Casey broke a promise on reducing inflation by voting for the 2022 law. But that’s not what happened.

The Inflation Reduction Act did not worsen inflation; inflation has fallen by about two-thirds in the two years since the law was signed.

However, Casey joined Democrats in supporting the American Rescue Plan of 2021, which economists said helped worsen inflation.

The Senate Leadership Fund, a super PAC working to build a Republican Senate majority, paid for the ad, which a spokesperson defended to PolitiFact.

"Bob Casey's votes for trillions in reckless spending made inflation worse," Senate Leadership Fund spokesperson Torunn Sinclair said.

On Aug. 16, 2022, Biden signed the Inflation Reduction Act, following approval by Democratic-led party-line votes in the House and Senate. Though it had "inflation" in its name, the law focused mainly on climate change, health care and taxes. "The package, which economists expect to cost up to $1 trillion over 10 years, included clean energy subsidies and tax credits, allowed Medicare to negotiate drug prices and boosted Internal Revenue Service funding."

In August 2022, when the law was signed, year-over-year inflation was 8.3%, not far below its June peak of 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 2024’s rate was 2.5%, close to its pre-pandemic level and near the Federal Reserve’s 2% goal.

So, the Inflation Reduction Act didn’t worsen inflation. But, despite what Casey said before the bill’s passage, economists generally agree the bill was not a major cause of the easing inflation in the two years that followed.

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Bernie Sanders

stated on November 10, 2024 in an interview on CNN's "State of the Union"

Inflation-adjusted weekly wages “are lower today than they were 50 years ago.”

Some of the bill’s provisions may one day help keep prices down — for example, rules 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 told us in a previous fact-check that 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 the Senate Leadership Fund’s claim that Casey’s vote for the Inflation Reduction Act "made (inflation) worse."

The Republican PAC blurred the distinction between two major Democratic-backed laws passed in the past four years. 

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 Lawrence Summers, who directed the National Economic Council under former President Barack Obama, warned the bill would worsen inflation. Fiscal conservatives joined in the warning.

Economists widely agree the law put too much money in Americans’ pockets when the pandemic was hampering global supply chains. In other words, too much cash was chasing too few goods and services; because demand outstripped supply, prices surged.

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.

Dean Baker, a senior economist at the liberal Center for Economic and Policy Research, told PolitiFact that although the American Rescue Plan likely contributed to higher inflation, it was not the sole factor behind the spike. Baker estimated the law was responsible for around 2 percentage points of the inflation increase at the time.

"Every wealthy country had a comparable rise in inflation rates in these years," Baker said. "Surely the (American Rescue Plan) contributed to this rise, but we would have seen a similar story in any case."

Douglas Holtz-Eakin, president of the center-right American Action Forum, also estimated a 2- percentage point rise in U.S. inflation related to Biden’s legislation.

A final note: Focusing on inflation alone ignores the parallel growth in wages. Since August 2022, when the Inflation Reduction Act was passed, prices have risen by 6.4%, but wages have risen faster — by 8.5%. So, since the bill passed, consumers have come out ahead.

The Senate Leadership Fund said, "Two years ago, Bob Casey promised us his vote will reduce inflation," but "Casey’s vote for reckless spending" made inflation worse. The ad distorted the timeline of Casey’s votes and blurred the difference between the Inflation Reduction Act and the American Rescue Plan. 

Casey was speaking about the Inflation Reduction Act in the clip shown in the ad. Inflation has fallen significantly since that law’s passage in August 2022, though economists believe the law was not a major reason why. 

However, Casey voted for the American Rescue Plan in 2021, which economists say contributed to the historically high inflation from 2021 to 2022. But that’s not the bill Casey said "will reduce inflation."

The ad has an element of truth but was edited in a misleading way to leave voters with a false impression of Casey’s comment and the Inflation Reduction Act’s effect. We rate the claim Mostly False.