Tipsheet

Did the 'Inflation Reduction Act' Help to 'Reduce Inflation at the Kitchen Table'?

Mia Cathell
Mia Cathell  |  September 14, 2022 1:30 PM

Standing alongside Vice President Kamala Harris, Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) on Tuesday afternoon, President Joe Biden celebrated last month's partisan passage of the falsely named "Inflation Reduction Act," even as a new troubling report shows prices are still rising.

Biden's celebratory event was hosted on the same day of the report's release that exhibits a continued climb in inflation throughout August, opposing hopeful expectations and prompting markets to have their worst day since June 2020. Now, the cost of groceries is through the roof. So why is Biden celebrating the Democratic Party's government spending spree? Has the "Inflation Reduction Act" actually helped to reduce inflation, especially when it comes to food?

CLAIM: In remarks delivered on the South Lawn of the White House, Biden trumpeted the massive spending package that was passed with only Democratic votes in Congress, also taking the televised opportunity to chastise Republican lawmakers he believes "could have and should have joined us on this bill as well."

"After all, this bill cut costs for families—helped reduce inflation at the kitchen table, because that's what they look at: How much are their monthly bills and how much do they have to pay out for their necessities? And it gave them just a little more breathing room, as my dad would say," Biden said with a microphone in hand.

FACTS: It was a bad day on Wall Street. Consumer-level inflation in August, as measured by the Bureau of Labor Statistics, ran hotter than expected after many optimistic economists predicted inflation would decline. Markets nosedived with the Dow falling 1,200-plus points, the worst in over two years since June of 2020.

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The headline Consumer Price Index (CPI), a key measure of inflation, printed at 0.1% month-over-month and 8.3% year-over-year, far from the Federal Reserve's eventual inflation target of 2% a year. While the latter print was down from July's percentage, both of the numbers were above consensus as the cost of food remains high, suggesting worrying signs of further Fed rate hikes and greater economic pain in the foreseeable future.

Meanwhile, the middle class is in sticker shock at the grocery store's checkout line. The food index experienced the largest 12-month increase since May 1979, an 11.4% spike over the last year. Tuesday's economic report illustrates a harsh reality that many working-class Americans are very much living in despite the blissful ignorance embraced by an out-of-touch Biden administration splurging taxpayer dollars willy-nilly.

Egg prices soared 39.8%, flour became 23.3% more expensive, the cost of milk grew 17%, and bread's cost leaped 16.2%. Meat and poultry are also costlier with chicken prices jumping 16.6%, meats rising 6.7%, and pork increasing 6.8%. Fruits and vegetables together are up 9.4%. Overall, grocery prices hiked up 13.5%.

RATING: Biden's claim that the falsely named "Inflation Reduction Act" has "helped [to] reduce inflation at the kitchen table" is FALSE. At the same time Biden touted the tax-and-spend legislation on the national stage, the latest CPI report topped forecasts. Biden's victory lap coincided with a hotter-than-projected reading on consumer prices, revealing that U.S. inflation surged again to 0.1% in August for an annual rate of 8.3%.

Economists polled by The Wall Street Journal had forecast a 0.1% drop in the CPI. In addition to the -0.1% change to the CPI that didn't happen, the month-over-month figure, instead, increased 0.1%. Elsewhere, the morning CPI data displayed the food index's jarring jump, breaking a record last set in the late 1970s.

With stocks sent tumbling and the economy crashing, it's a long, exhausting way to go before the inflationary fire, the worst in decades, is extinguished. Throwing money on the fire won't douse it, only kindle the flames.