Why the Senate should kill the Build Back Better bill
For those who believe in limited government, fiscal responsibility and the free enterprise system, Friday was one of the most ignominious days in the history of the House of Representatives. The House-passed Build Back Better bill was the fourth multi-trillion-dollar spending package that the Democratic-controlled chamber has enacted in just 12 months.
Let us recount: First, in the last days of the Trump administration, the House approved a $1 trillion COVID relief bill. Then, in March, Congress approved a $1.9 trillion bill that mostly bailed out blue states which shut down their economies the year before during the pandemic. Then, last month, the House approved a $1.2 trillion sham infrastructure bill that is mostly subsidies for green-energy programs. And now we have the $2 trillion to $3 trillion social welfare/climate change bill.
Add this all up and you have $6 trillion to $7 trillion of spending — almost all of it being spent during an economic recovery. Oh, and that doesn’t even include the $5 trillion annual federal budget that will be approved next month. All together, Congress will have authorized more spending this year than the combined costs of the Revolutionary War, the Civil War, World Wars I and II, the intercontinental railroad, the interstate highway system, and the Apollo moon landing, adjusted for inflation.
Why are we doing this?
There is no economic justification in adding trillions of dollars of spending and debt to an economy that is already in recovery. The latest Build Back Better spending and debt bill is especially foolhardy, given that the biggest threat to the economy now is runaway inflation that could flatten the economy and family finances.
Democrats argued that this was all justified to reduce income inequality and, as President Biden has said umpteen times, to make the rich pay their “fair share.” But then, in an act of towering hypocrisy, House Democrats added back a loophole allowing the wealthy to deduct state and local taxes from their federal tax bills. It turns out that, thanks to this shameless giveaway to high-tax blue states, most millionaires and billionaires will pay less federal income tax under this bill. That pretty much leaves it up to the middle class to pay the freight.
On the spending side, even the New York Times has described BBB as “cradle to grave” government. We all know that the stampeding cost of entitlement programs like Social Security, Medicare, Medicaid and welfare are all starting to swim in red ink, with the deficits scheduled to get worse every year until they run out of money. So, instead of fixing the finances of these programs, we are going to create several trillion dollars of new entitlements? This is the fiscal equivalent of putting more passengers on the deck of the Titanic.
One of the most offensive features of this bill is the addition of 75,000 — the number of seats in the Rose Bowl football stadium — new IRS agents to get more revenues. Conservatives should be horrified by this idea. Has Congress forgotten that, less than 10 years ago, the Obama administration’s head of enforcement at the IRS illegally targeted conservative groups and donors for audits and was let off scot-free? Is there any doubt that the Biden administration would do the same thing with squadrons of new IRS snoops?
Then there are the higher tax rates on American businesses embedded in this bill. The Wall Street Journal reported last week that, under the House bill, the United States would see federal tax rates above 50 percent and, in some states, the combined state and federal tax rates would climb to near 65 percent — the highest in the industrialized world. These taxes would be paid by successful small businesses, their investors, owners and operators. This reverses 40 years of keeping tax rates low — especially under Reagan and Trump — to make America more competitive. It worked: Under Trump, we had the lowest unemployment rate in at least 50 years.
There’s a basic economic truism that if you tax something, you get less of it. How is America going to create more jobs by raising taxes into the stratosphere on the people who create jobs? Do Democrats really think that our $10 trillion federal government is going to create all the jobs?
The Senate should kill this bill and pour salt in the sand on its burial site so it never comes back. More debt, spending and printing of money at this stage of our economic recovery would be the equivalent of pouring gasoline on an inflation forest fire.
It should start by stripping the most economically destructive features of the bill:
- The income tax rate increases.
- The restoration of the state and local tax deduction (SALT).
- The child-care subsidies. (Government programs make services more expensive, not less expensive – just look at the exploding cost of health care and education.)
- The four weeks of paid parental leave — a killer for employers.
- The $40 billion addition to the IRS budget.
- The civilian climate corps program. (We don’t need tens of thousands of paid federal employees harassing American businesses.)
- The special tax breaks for unions, trial lawyers, the media and green-energy producers.
President Biden issued a statement after the BBB passed the House, describing it as a “great step forward.” To what? Big government socialism?
No thanks, Joe.
Stephen Moore is a senior fellow at FreedomWorks and a co-founder of the Committee to Unleash Prosperity. He served as a member of President Trump’s Economic Recovery Task Force.