Q: What do you hear from Iovans about inflation?
A: So far this year I have met with Iovans at about two-thirds of my 99 annual meetings in the district. Without exception, I have heard deep concerns about inflation and an impending economic downturn. Volumes are up as the Biden economy raced non-stop towards $5 gas. The Biden administration insists the “temporary” has proven long-term and painful. US inflation hit a 40-year high, rising to 8.6 percent in March on reckless party spending carried out a year earlier. The ill-named US bailout plan was crushed by a party-line vote when the Senate Majority Leader used the budget voting process to avoid working down the aisle with Republicans. The Biden administration was leaning on the levers of a government controlled by a political party and look what happened. What did the Biden administration expect after Congress already injected $4 trillion in pandemic relief spending into business? He opened a fire hose on the US economy, ignoring warnings from Larry Summers, a Harvard economist and former Treasury Secretary and director of the National Economic Council under the Clinton and Obama administrations. He said more federal spending would fan the flames of inflation. You bet your shoes on it. The highest inflation in 40 years is eroding savings and making it harder than ever for Americans to meet their needs. Rising costs of consumer goods and services, from groceries to fuel, utilities and rent, are forcing families to eat out and reconsider their summer vacation plans. More and more Iowans are being forced to use their hard-earned savings, which have been destroyed by inflation, to pay the bills. Many Americans remember the Carter administration’s years of great inflation, which peaked at more than 13 percent in 1980. Today, homeowners, farmers and small businesses are buckled in anticipation of higher interest rates that will translate into lower inflation. Meanwhile, I’m hearing from Iowans across the state who are struggling to pay for groceries and fill gas tanks from week to week. Farmers struggled to find fertilizer and buy diesel to get their crops on the ground. Many are afraid to pay for the fuel at the time of harvest. Small businesses are thin with rising transportation, production and labor costs. I have called on President Biden to end his war on American energy. Instead of asking foreign dictators to increase production, reverse executive orders that have been driving up the cost of gasoline.
Q: How will your middle class savings and investment law help Iovans?
A: As a past chair of the Senate Tax Committee on Treasury, I have worked to implement financially responsible tax policies that allow Americans to keep more of their hard-earned money and encourage saving, saving and investing. permitted. I wrote pro-growth tax policies during the George W. Bush and Trump administrations that closed tax loopholes for foreign companies to bring investment back to the United States and encourage job creation, small business expansion, and entrepreneurship in communities across the country support financially. given, especially among minorities. Stimulating the economic pump with pro-growth tax policies helps raise wages, savings, and investment. Today, 40 years of high inflation are cash-strapped for Americans—particularly those on fixed incomes. I’m working on making things easier through the Federal Tax Code. Under the Biden economy, American consumers’ purchasing power is shrinking, squeezing budgets, eating up paychecks and eating away at savings. Middle-class households, retirees, small businesses and farmers have seen their savings fall in value while still facing taxes on profits that cannot keep up with inflation. This creates a distorted incentive to spend now rather than save, further fueling inflation. The Middle-Class Savings and Investments Act would target interest relief for low- and middle-income Americans to help them save and invest. In particular, it would exempt from taxation $600 interest income for married couples/$300 for individuals; doubling the level of the zero percent (lowest) tax bracket for long-term capital gains and qualifying dividends, indexing the income limit for inflation; abolishing the marriage penalty on the net investment tax, which imposes an additional 3.8 percent tax on certain incomes, and indexing their income limit for inflation; And increase the maximum “savings credit” a person can get to pay into a qualifying retirement account, expanding eligibility to more taxpayers. Paying to save rather than spend is one tool Congress can use to help stem inflation without the damaging consequences of reckless federal spending, dangerous windfall taxes, or wage and price controls.
Chuck Grassley is a senior United States Senator from Iowa and a member and former chair of the Senate Finance Committee.