President Biden and Congressional Democrats have proposed roughly $6 trillion in new spending over a decade of hard-earned taxpayer dollars. To put this into perspective, this exceeds the economic output of every country except the U.S. and China, matches the $6 trillion authorized for COVID-related items since the pandemic—with nearly $1.5 trillion unspent—and exceeds the annual federal baseline budget of $4.8 trillion.
To put it bluntly, this reckless spending will destroy America’s fiscal and economic institutions by pushing us toward insolvency, dependency, and insanity.
The first proposal that the Senate, with some Republican support, recently passed a motion to proceed on is a mostly a progressive wish list of spending. It’s $1.2 trillion on “infrastructure,” with an unfunded $550 billion of it being new spending as the rest are funds previously authorized but not yet spent.
But it has just $110 billion, or less than 10%, for what’s historically been considered infrastructure—roads and bridges. The other 90% is to fund mass transit waste, green energy nonsense, and more items that the states or the private sector could do.
This first proposal should die or at least be cut down to actual infrastructure projects.
The second proposal is a reconciliation package deemed as “human infrastructure” at an astronomical cost of likely $5 trillion over a decade (with little backing documentation on what human infrastructure is).
This proposal will not only dramatically expand the federal government’s role in everyday American life but will contribute to stagflation not seen since the 1970s. It would fundamentally expand people’s dependency on the federal government and destroy the potential of Americans.
Here’s how it spends money we don’t have and turns America into something she is not.
Authorizing Runaway Government Spending
- Congress has already authorized almost $6 trillion in new spending, allegedly due to Covid-19, and executive actions by the Trump and Biden administration has authorized almost $1 trillion
- As a result, the federal deficit tripled to $3.1 trillion in 2020 and is expected to be in the same ballpark this year.
- Instead, we need less spending in the short term and a spending limit imposed based on the Foundation’s Responsible American Budget.
- Raising taxes on corporations and investment by $3.5 trillion will decrease our global competitiveness, decrease investment in America and result in less economic growth, fewer jobs, slower wage growth, and higher taxes on many Americans. Despite Biden’s promise to not raise taxes on those earning less than $400,000 a year, this proposal will raise their burden both directly and indirectly, especially for low-income earners.
- These taxes disincentivize saving and investment so much that some tax increases will result in less tax receipts.
- Instead, faster economic growth, more job creation, and faster wage growth can be achieved by reducing taxes and spending.
Driving Higher Inflation
- The general level of prices (CPI) rose 4% over the last year—the largest 12-month increase since August 2008. Meanwhile, real wages fell 1.7% indicating that consumers are worse off.
- More government spending when the Federal Reserve has already doubled its balance sheet and is purchasing over a trillion dollars a year in Treasury bonds will exacerbate existing inflationary pressures and make things even worse.
- Instead, there should be strict fiscal and monetary rules to return to policy normalcy.
- Much of the newly printed money has subsidized the unemployed, giving the average family of four more than $109,000 in government assistance through September 2021.
- In 19 states, a family of four can currently receive the equivalent of over $100,000 in salary with no one working. Some in Congress want to further expand these handouts and make them permanent, but this will redistribute more from the private sector and trap many people in a cycle of dependency.
- Instead, we must stop disincentivizing work by not extending the federal enhanced unemployment payments and by not making permanent the enhanced child tax credit.
Interfering with Health Care
- The package imposes socialist price controls on prescription drugs which will reduce the number of new drugs introduced into the U.S. market.
- Congress already expanded costly Obamacare subsidies in the last 18 months and expanded Medicaid through emergency powers, and now it plans to expand Medicare. That’s despite Medicare Part A being on track to become insolvent by around 2024.
- Instead, we should increase price transparency, remove unnecessary regulations on prescription drugs, and use alternatives like direct primary care to provide better health outcomes at a lower cost.
Pushing the Green New Deal
- The plan aims to cut total U.S. carbon emissions in half by 2030 and to have 80% of the nation’s electricity come from zero-emission energy sources.
- Fossil fuels currently provide 60% of U.S. electricity, with another 20% coming from nuclear. Completely eliminating fossil fuels from electricity generation by 2030 would reduce global temperatures in 2100 by an immeasurable 042 degrees Celsius.
- Instead, these efforts should be trashed, and an all-of-the-above energy production strategy should be supported that removes obstacles to innovation and adaption.
“Free” Community College
- Tuition at community colleges is relatively low and programs like federal Pell Grants are already available to those who cannot immediately afford the tuition.
- Subsidizing community colleges further will only make these schools more inefficient, just as federal funding for other tertiary schools has caused their costs to explode, especially at the administrative level.
- Instead, students should find paths that best meet their unique needs and that meet the skills demanded by employers. This includes career and technical education along with apprenticeships that typically don’t burden students with debt without job opportunities.
Ultimately, these big-government, green-energy boondoggle, dependency-inducing, tax-and-spend proposals coming out of D.C. should be rejected; They will weaken families, destroy jobs, and hurt our future. Instead, Congress should focus on removing obstacles hindering opportunities for Americans to flourish.