Does the Inflation Reduction Act live up to its name? Fact-checking the campaign claims

Will the Inflation Reduction Act reduce inflation?

That’s one of the arguments that North Carolina’s Democrats and Republicans are having as they sharpen their attacks less than three months before the November election.

The parties held opposing news conferences this week discussing key issues in Congress and why their candidates deserve a seat at the decision-making table.

Below, we break down the facts behind some of their claims. But first, a little background about the candidates.

First, the Republican National Committee hosted North Carolina Republican Party Chairman Michael Whatley and U.S. Rep. Ted Budd, the party’s candidate for Senate, on a press call.

Democrats followed Wednesday with a news conference outside the state party headquarters in Raleigh with Chair Bobbie Richardson and state Sen. Wiley Nickel, a congressional candidate.

Budd is in his third term representing North Carolina’s 13th Congressional District, but is now running to replace U.S. Sen. Richard Burr, who is retiring at the end of the year. He faces former state Supreme Court Chief Justice Cheri Beasley, a Democrat, in the general election.

Nickel is running to represent the 13th district, but not to replace Budd. The N.C. General Assembly redrew the state’s congressional districts this year, moving the district from the Triad, where Budd lives, to the Triangle, where Nickel resides. He faces off against Republican Bo Hines, a 26-year-old Yale graduate.

Will the climate and health law reduce inflation?

Republicans focused in their news conference on the climate, energy, health and tax law that Democrats championed and President Joe Biden signed last week.

Out of the four candidates, Budd is the only one who had a say in whether the law passed Congress. Budd, like all Republicans in Congress, voted against it.

“We see that Cheri Beasley continuously proves that she will serve as a rubber stamp for Joe Biden,” Budd said in his news conference. “For example, she supported this so-called Inflation Reduction Act, which really should be called the ‘Inflation Acceleration Act,’ because it does nothing to reduce inflation and also increases taxes on the middle class.”

Richardson, by contrast, said in the Democrats’ news conference that the law would indeed reduce inflation.

“With the Inflation Reduction Act, President Biden and Democrats are siding with working families over special interests to reduce inflation and lower costs for working families,” Richardson said.

Penn-Wharton Budget Model, the Congressional Budget Office, the Tax Foundation, the Committee for a Responsible Federal Budget and Moody’s Analytics all rejected this claim, PolitiFact reported, saying that the bill does little, if anything, to affect inflation.

In a letter to Sen. Lindsay Graham, the Congressional Budget Office told him that in 2022, the bill would have “negligible effect on inflation.” In 2023, inflation would be between 0.1% lower and 0.1% higher under the bill than under current law, the CBO said.

“That range of likely outcomes reflects the uncertainty about how various provisions of the bill would affect overall demand and output, the supply of labor, the persistence of disruptions in the supply of goods and services, and how the Federal Reserve would respond to offset any increase in inflationary pressure,” the letter stated.

Will the law increase taxes? On who?

Budd is wrong in saying that the law increases taxes on the middle class, a claim he and others made in Republicans’ news conference.

The law sets a 15% minimum tax on large corporations, but does not raise taxes on middle-class individuals.

Whatley said that Americans making less than $400,000 will shoulder the brunt of the tax burden and that taxes will increase on those making as little as $20,000 a year.

Similar claims have been made by other Republicans, leading to an Associated Press fact check that determined those to be false. One possible middle-class impact: The 15% minimum tax on large corporations could have a trickle-down effect that could result in lower wages for workers of those corporations, The AP reported.

Will the Inflation Reduction Act add IRS agents?

Whatley falsely claimed Biden wants to use the law to earmark $80 billion for the IRS for additional audits and “an army of 87,000 new IRS agents.”

The AP fact-checked a similar claim and found that the IRS requested the money for its 10-year plan to hire around 87,000 employees after losing as many as 50,000 workers through attrition. Some of these workers would be enforcement agents, but others would be clerical workers and customer service representatives.

The $80 billion will also be used to make upgrades to the IRS, including its technology.

As for those making under $400,000 per year, the U.S. Treasury says it is not expecting to see any increase in audits.

Are we in a recession?

Whatley claimed the United States is currently in a recession, which is a widespread argument, though not one made by the Biden administration.

“Over the course of his term, President Biden has turned a recovery into a recession,” Whatley said. “The U.S. economy has now shrunk for two consecutive quarters, meeting the definition of a recession that Republicans, Democrats and economists across the country have previously touted as the way that we defined a recession.”

The National Bureau of Economic Research defines a recession as a significant decline in economic activity that is spread across the economy and lasts more than a few months. Bureau officials say standards of depth, diffusion and duration need to be met individually to some degree, but extreme conditions of one could offset another.

The NBER does not base its definition on a recession solely on the GDP but includes several factors. The agency acknowledges that most, but not all, recessions identified do have two or more consecutive quarters of declining real GDP.

Is there a plan to end Social Security?

Democrats also bashed the opposing party for its priorities.

“If Bo Hines gets elected, North Carolinians can count on him to be a rubber stamp on the MAGA (Make America Great Again) Republican agenda from wanting to ban abortions without exception to calling to defund the FBI to pushing the GOP plan to cut Social Security and Medicaid and continue to prove he is too extreme for North Carolina,” Richardson said.

There’s a lot to unpack in her sentence.

Richardson is correct that Hines recently called on Congress to defund the FBI and that he has taken a hard stance against abortions.

Earlier this month, radio talk show host John Fredericks asked Hines if Congress would consider defunding the FBI.

“We have to,” Hines said. “We’re at a point in our country now where we have an unregulated fourth branch of government that’s targeting middle-class Americans on a daily basis. I mean, it’s unbelievable what we’re seeing.”

On April 4, Hines posted to Twitter a video in which he says, “Abortion has certainly been the greatest moral atrocity. I think that we’ll look back in generations to come and say that we had a mass genocide that occurred in our country. Abortion is absolutely murder, and any Republican politician that’s not willing to say that should not be in office.”

As for cutting Social Security and Medicaid, the Annenberg Public Policy Center tackled a similar attack in a fact check.

Sen. Rick Scott, a Republican from Florida, proposed a plan to downsize the federal government by sun-setting all federal legislation after five years. Both programs were created under legislation, but both Scott and Senate Minority Leader Mitch McConnell have said Republicans would not get rid of either program. However, Scott said he would like to improve them to be “financially solvent.”

For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at https://campsite.bio/underthedome or wherever you get your podcasts.