Who benefits from Democrats’ infrastructure and spending package? Not average Americans
Democrats in Congress are pushing hard to pass their version of an infrastructure and spending package. Americans still struggling to recover from the pains of the pandemic haven’t been paying too much attention to the details. But as the facts slowly emerge, it’s becoming clearer that their plans are much more about growing government and helping favored groups than solving problems that working Americans face every day. We see the potholes and the need for rebuilding our infrastructure. Unfortunately, our leaders in Washington see an opportunity to advance their socialist agenda.
Their spending plans will not only raise taxes and the national debt to astronomical levels, but they will also give the federal government more power to decide who succeeds in the marketplace.
Our friends on the left have spent years arguing that we should pillage the bank accounts of billionaires for the “public good” and that we need massive spending to “correct” supposed market failures, like global warming/climate change, which they say disproportionately affect the most vulnerable among us. But it is becoming clear that the Democrats’ infrastructure package will create a less efficient economy that ultimately benefits a few billionaires and favored companies at the expense of everyone else.
The Wall Street Journal Editorial Board recently highlighted one example of this truth. They pointed out that this package will extend additional subsidies to carmaker Tesla. The same company that recently crossed the trillion-dollar valuation mark. Not long ago our government gave companies like Tesla and SpaceX a huge broadband subsidy worth over $900 million. Subsidies like these have contributed to a handful of company’s valuations. Tesla, for example, is now worth more than the next nine auto companies combined. And SpaceX now the second most profitable private company in the world. Yet, thanks to congressional Democrats’ infrastructure wish list, the richest man in the world now appears poised to obtain even more taxpayer subsidies.
After facing heavy pushback a few weeks ago on how their pure income tax approach to the infrastructure package, a plan that would leave many of the Democrats’ wealthiest donors unscathed, they changed course. They’ve begun exploring more comprehensive alternatives, including additional taxes on corporate profits and a bizarre tax on yearly (unearned) capital gains. However, these new proposals within the infrastructure package appear to drive an even greater barrier between a few billionaires and their competition.
Not only will Tesla and other “preferred” companies benefit from direct subsidies, but the package’s proposed tax increases on billionaires will act as a type of wealth redistribution amongst themselves. For example, Elon Musk might pay more in taxes, but that new tax revenue will go towards subsidies that increase Tesla’s valuation. So the Democrats will take from one pocket to fill the other.
Companies and consumers who will see little direct benefit from the infrastructure subsidies will fund those who do. Once again, Washington is picking winners at the expense of the marketplace. This is absurd wealth redistribution that will only create greater inefficiencies.
And the problems they want to create do not end there.
The Democrats are also working to increase the nation’s social safety net with massive expansions to social programs like Medicare, despite the fact that these programs already struggling financially.
Thanks only to the sanity of Senator Joe Manchin — a Democrat, at least for the time being — that America has any hope of avoiding these financial icebergs. He had the temerity to ask the critical question, “If Social Security is about to reach insolvency, why would we double the size of entitlement spending?” Like the boy with his finger in the dike, we cannot know how long he can hold back the flood.
Not only will the Democrats’ spending package hasten the bankruptcy of America’s social safety net, it also threatens to accelerate the hyperinflation we are experiencing. Inflation punishes the poor and middle class far more than the fat cats. It will also put increasing pressure on those entitlement programs.
Democrats can promise all they want that the middle class will not finance their new programs. But it will be average working Americans who will pay the freight. They will pay for it through hidden taxes and the inflation that the left’s agenda is creating. Unless you live under a rock — or are the president’s chief of staff — then you know that rising prices are already causing pain, whether it’s at the pump or the grocery store. Even The New York Times acknowledged that voters are growing increasingly sour over this unvarnished reality.
With the estimated size of this infrastructure package easily clearing $2 trillion, it will be nearly impossible to stop inflation from spiraling. Perhaps the president and congressional leaders sincerely believe that they are doing what is best for the country. As more details come out, it’s becoming harder to believe that this administration cares much about the working class.
Democrats may have mobilized the distaste for Donald Trump to return to power. But they are showing America (and indeed the world) that they are the ones who are genuinely incapable of governing. It may be impossible to stop the infrastructure bill from becoming law due to arcane Senate rules.
Americans want their roads and bridges fixed. They don’t want to subsidize certain favored billionaires. They don’t want entitlement spending to balloon when we’re already $30 trillion in debt. They certainly don’t want stagflation. Perhaps this reckless spending and mismanagement will awaken the body politic and fuel a Republican rout in the midterms next year. We can only hope that the cavalry won’t be too late.
Gil Gutknecht served as a Republican member of the U.S. Congress from Minnesota from 1995 to 2007.
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