July is normally the time of year for holidays and barbecues. Yet instead of grilling steaks or hot dogs, Congress is preparing to ignite America’s economic recovery.
This week, the Senate will begin a series of votes on a $ 1.2 trillion infrastructure package that includes highways, public transit, airports, intercity trains, and more.
While the infrastructure deal has many flaws, those issues pale in comparison to what is likely to follow, which is the biggest tax and spending bill in the country’s history. It would create a cradle-to-grave welfare state paid for by destructive tax hikes.
Under normal circumstances, infrastructure would have nothing to do with social programs. But these are not normal times. Democrats have spent the year trying to use the word “infrastructure” as a shield for agenda items that have nothing to do with roads and bridges.
Now the best Democrats like the leader of the senator majority Chuck schumer, DN.Y., and President of the Chamber Nancy Pelosi, D-Calif., Demand that the infrastructure bill move forward only in conjunction with a high-spending bill filled with Liberal priorities that uses a procedure known as reconciliation, which would allow him to pass the Senate along party lines.
To achieve reconciliation, they must first pass a budget resolution for the coming year. A budget deal between Democrats on the Senate Budget Committee revealed they will seek a gargantuan $ 3.5 trillion in new spending. The budget agreement will seek to expand several government programs.
First, the budget deal would create the biggest expansion in social benefits since the 1960s, which would encourage dependence on government and discourage work. This would go even further than the negative effects of excessive unemployment benefits on the economy.
Second, the budget deal would include a host of programs linked to the Green New Deal, which would provide enormous amounts of welfare to favored industries while generating minimal environmental benefits.
Third, the budget deal would expand existing health programs like Medicare, bringing America closer to government-run health care and reducing consumer choice and medical innovation.
Fourth, it would likely include a massive amnesty for illegal immigrants, which would encourage new waves of illegal border crossings and violate fundamental aspects of budget reconciliation.
This vision of centralizing power in Washington, DC through a command and control economy and an endless array of federal benefit programs, is bad enough.
The destructive tax hikes that would accompany the spending would make matters worse. Tax increases would slow down economic recovery by discouraging private investment, which is a source of job creation and economic growth.
Additionally, Democrats hope to use the concept of “dynamic scoring” to reduce the number of tax increases needed to pay for expenses. The theory is that federal policy can lead to new economic activity and generate additional tax revenue.
However, this only works if the legislation actually makes the economy grow. Combining anti-labor social benefits with anti-investment tax hikes would do the exact opposite, which would mean lower incomes and add to the national debt.
The Congressional Budget Office has already shown that large spending increases funded by tax hikes shrink the economy, lower wages and reduce overall investment. Likewise, experts from the Heritage Foundation have shown that spending on infrastructure is not a reliable way to grow the economy and that overall spending fails to achieve the promised growth effects. (The Daily Signal is the Heritage Foundation media)
All of this spending – $ 1.2 trillion for infrastructure, $ 3.5 trillion for climate and well-being – does not happen in isolation. Adding in the deeply flawed $ 1.9 trillion package that was passed in March, the grand total rises to $ 6.6 trillion in new past spending in a single year.
In other words, it would cost about $ 51,000 to every household in the country.
Beyond the problems of unnecessary and counterproductive spending, inflation is another factor that can further hurt the economy.
The federal government has pumped trillions into the economy in 2020 and trillions more in 2021. Excessive amounts of stimulus have yet to trigger the type of hyperinflation that sparked the unrest in the 1970s.
However, expanding the spending frenzy further could quickly push inflation to the brink of collapse.
By marrying the radical reconciliation package to the bipartisan agreement on infrastructure and rushing infrastructure to the Senate before it has even been written, Schumer has many Republicans questioning their support for the infrastructure deal.
One of the factors behind this faltering support is how the reconciliation package undermines the foundations of political compromise.
Negotiations on infrastructure have been going on for months, which is fully justified given how much Democrats want to spend. Yet if Democrats can use reconciliation to get almost anything they don’t get in the infrastructure bill, it turns negotiations into a head-to-head, toss-up proposition.
Votes on infrastructure should not be tied to a spending program that pushes America toward New York stagnation and Cuban misery.
Instead of rushing to vote on half-baked legislation in the name of an arbitrary target of completing infrastructure work in July, lawmakers should engage in the open deliberation process major legislation deserves.
Additionally, rather than trying to impose a single federal approach on the country, Congress should cut red tape and empower the private sector and state governments to improve the country’s infrastructure.
This would help the economy to continue cooking without the risk of overheating.
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