At
each of my 99 county meetings and in conversations with Iowans, the record cost
of living is top of mind as Iowa families feel the impact of 9.1 percent
inflation on their budgets.
Due
to rampant inflation spurred by reckless government spending, consumer prices
are escalating at a historic pace.
Middle-class
Americans are paying more on everything from gasoline, food and shelter, to
home furnishings, prescription drugs and clothing.
Since
President Biden took office in January of 2021, consumer prices have increased
on average 12 percent nationally. As a result, the average Iowa household has
seen its monthly living expenses increase by $670.
The
rising cost of transportation, energy and food, has hit household budgets
particularly hard.
Since
January 2021, Iowans on average are paying an extra $206 a month on energy,
$334 on transportation and gas and an additional $76 a month on food.
It’s
no wonder inflation is the number one concern I hear about as I tour Iowa’s 99
counties.
Rising
wages have helped some Iowans manage the rising cost of living. However, for
most, rising prices have far outpaced wage gains.
While
trying to make up an extra $600 a month is hard enough for wage earners, it’s
next to impossible for seniors living on a fixed income.
For
them, there is no prospect of a raise.
They
must make do by stretching their Social Security, pension or investment income
as far as they can.
While
there is an annual cost of living adjustment (COLA) intended to maintain the
purchasing power of Social Security benefits, this adjustment lags behind
inflation.
The
5.9 percent COLA for 2022 was the largest increase since 1982.
However,
that’s far below the 9.1 percent annual inflation rate reported for June.
The
Social Security Administration reports the 2023 COLA will be between 7.3
percent and 10.8 percent.
Unfortunately,
seniors have another six months until they see this relief in their benefit
payments.
The
current turmoil in the stock market has made it even harder for seniors to keep
their heads above water.
They
are seeing their retirement savings in 401(k)s, IRAs and non-tax advantaged
accounts eroded by stock market declines, inflation and taxes.
Seniors
are understandably looking to the administration and Congress to take action to
address inflation and rising prices.
Unfortunately,
all the administration and majority in Congress have offered them are false assurances,
more reckless spending and damaging tax hikes.
It’s
time we try a different approach.
One
focused on fiscal prudence, targeted non-inflation inducing relief and
increasing market competition or boosting supply.
The
most important thing Congress can do to fight inflation is stop its reckless
spending.
Even
better would be to trim the budget to eliminate unnecessary spending.
As
for providing inflation relief, it must be done in a way that won’t add to our
growing debt or further fuel the flames of inflation.
One
way to do this is by providing targeted inflation relief that incentivizes and
rewards taxpayers who save rather than spend.
Under
my bill, most middle-class savings and investment income would be subject to zero
tax.
This
means middle-class seniors would be subject to no federal income tax on their
long-term capital gain and dividend income. They would also be exempt from
federal tax on up to $600 of interest income they earn in a year.
Exempting
most middle-class savings from tax not only provides relief to seniors and
others, but also will reduce a tax bias that favors consumption over saving.
While
not a silver bullet to stop inflation, encouraging more consumers to save
rather spend may help reduce inflation pressures by dampening demand.
Importantly,
my proposal is fully paid for so it won’t add to our unsustainable debt and
deficits.
In
addition to practicing fiscal responsibility and providing sensible targeted
relief, I support policies designed to hold down prices by increasing supply
and promoting greater competition in the market place.
A
prime example of this is my work to rein in out of control prescription drug
prices.
Americans
– especially our seniors – are paying too much for their prescription drugs.
AARP says brand name drugs
that seniors use are going up more than twice the rate of inflation.
Recent
data indicates nearly a
half-million seniors filled a single prescription that met their out-of-pocket
threshold and millions of seniors are
reaching the catastrophic phase of Part D.
We
must act to lower prescription drug prices.
I
passed out of the Finance Committee a bipartisan and negotiated bill that will
lower the cost of prescription drugs.
It
saves seniors $72 billion and taxpayers $95 billion.
It
caps out-of-pocket costs at $3,100 and eliminates the donut hole.
It
will also cap year-to-year prices increase of drugs at inflation.
This
ends taxpayer subsidies of Big Pharma and provides real relief to seniors.
Let’s
not waste another minute to lower drug costs.
I
will work with anyone who wants to pass the bipartisan Grassley-Wyden bill.
In
addition to prescription drugs, I’m leading the charge to lower the cost of
grocery bills.
The
Big Four Packers who have over 85 percent of the market use anti-competitive
tactics to box-out smaller producers.
While
independent farmers in Iowa are forced to sell livestock at dirt cheap prices,
the costs to consumers are climbing.
This
is happening at the same time the Big Four packers are reaping record profits.
Just
this past week, Sysco, the largest food distributor in the U.S., filed a
lawsuit against these packers alleging price fixing.
They
claim that these packers intentionally reduced the number of slaughtered cattle
to inflate beef prices that families are forced to pay.
We
must maintain a cash market for cattle producers and increase competition.
Toward
this goal, I’m spearheading two bipartisan bills that sailed through the Senate
Agriculture Committee that would do just that.
Another
reason why we are seeing high prices at store shelves is the high price of
gasoline and diesel.
Contrary
to what some believe – food does not grow on grocery store shelves.
Food
comes to the stores on trucks, and our country has never seen prices at the
pump as high as they are right now. In fact, gas prices have doubled since
President Biden took office.
Instead
of focusing on domestic fuel production, the president and his administration
have caved to environmentalists to shape our energy policy.
Since
energy is an input in every good on store shelves, rising energy prices mean
climbing prices at the cash register at Hy-Vee and Walmart and every other
store.
It
is time to reverse course on President Biden’s energy policy and pursue an
all-of-the-above strategy.
Let’s
go back to being energy independent rather than energy dependent.
Instead
of just talking about inflation and its impact on Iowa families and seniors, it’s
time for Congress to stop the reckless spending and start focusing on commonsense
relief and reforms.
I
am leading the charge to do just that through targeted tax relief, market
reforms in key industries to hold down prices and by boosting the supply of
fuel to keep prices at the pump in check.
I
urge my colleagues on both sides of the aisle to join me in my efforts.
