Congress’ spending spree will increase debt and taxes
By Matthew Gagnon
On Wednesday, President Joe Biden unveiled his latest idea, which — sit down for this, because I know it will be shocking — proposes to spend a lot of money, and raise taxes.
In what the White House is calling the “American Jobs Plan,” Biden is to completely reshape the economy. If you can count on one thing in this life, it is that a left-wing politician will seek to “solve problems” in one, and only one way: spend money, and raise taxes.
Of course, the “Spend a Lot of Money and Tax Us Into the Stone Age” act doesn’t exactly sound that appealing, so our dear leaders in Washington call it a “jobs plan,” because we all like jobs, right?
There must have been a focus group somewhere, decades ago, that told political consultants that putting the word “jobs” in a piece of legislation is the way to get people behind an idea. Every unpopular idea ever proposed seems to come with the word “jobs” slapped onto it.
If all of these “jobs” bills that have passed over the years were to have actually produced jobs, then the United States would have a permanent zero percent unemployment rate.
But I digress.
Biden’s proposal is not surprising, but it is disappointing. Even if a massive infrastructure bill is a good idea — and believe me, it isn’t — the fact that he is actually proposing it now is one of the silliest things I’ve ever seen in government.
Let me remind you all of what we have done here in the last 12 months in response to the COVID-19 pandemic.
First, there was the Coronavirus Preparedness and Response Supplemental Appropriations Act, enacted in March of 2020. This provided a modest $8.3 billion in emergency funding for health agencies and vaccine research, and $7.8 billion in discretionary funding to various levels of government.
Then, there was the so-called Families First Coronavirus Response Act. This bill totaled about $192 billion, which was spent on unemployment insurance, Medicaid, support for employers for sick leave, and free coronavirus testing.
After that, we saw big stuff. Next came The Coronavirus Aid, Relief, and Economic Security Act — also known as the CARES Act — which spent roughly $2 trillion dollars, including a lot of support for businesses through the Paycheck Protection Program, and direct payments to taxpayers.
They weren’t done. In April of last year they passed the Paycheck Protection Program and Health Care Enhancement Act, which represented another $483 billion to boost the PPP program, among other things.
At the end of 2020, Congress passed the Consolidated Appropriations Act, 2021, which spent another $868 billion to continue to boost the PPP while providing more direct payments to taxpayers.
And then finally we arrive at the recently passed American Rescue Plan Act of 2021, a gigantic $1.9 trillion dollar boondoggle that once again was supposed to help the American economy, and support those affected by COVID-19.
All told, the last year has seen a total of $5.3 trillion spent on COVID-19 response alone, to say nothing of the $4.79 trillion that had already been budgeted by the federal government prior to the COVID-19 crisis. That $4.79 trillion, by the way, already represented a more than trillion dollar deficit for the year.
Which means that we are basically looking at more than $6 trillion of new debt in the last 12 months. And Biden’s next idea is to spend $2 trillion more?
And make no mistake, this will increase our nation’s debt, as the slew of new taxes that he has proposed — including a ridiculous hike of the corporate tax rate to 28 percent that could once again make America uncompetitive globally and wallop businesses that have already been devastated by the government response to COVID-19 — will not even come close to covering the new spending.
If you thought all that was crazy, then buckle up, because the Progressive Caucus in Congress is objecting to the plan because it is apparently insufficient. That’s right, it isn’t big enough.
I can’t help but just sit here and watch this, stunned and bewildered, wondering when voters are going to wake up to the cataclysmic damage these ideas will cause, and are causing.
Unfortunately, I don’t think people are going to wake up until it is too late, and the fiscal house of cards, built on irresponsible spending and dangerously high debt, finally comes crashing down.
Matthew Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.