By Michael Fahn
Last month, Senate Democrats announced a $3.5 trillion budget proposal geared towards education, antipoverty, and the climate agenda. The proposal marked a compromise between the centrists’ $2 trillion and the progressives’ $6 trillion packages.
With a 50-50 split in the Senate, Democrats will need to push past amendment votes. The special budget reconciliation process waives the 60-vote threshold; every single caucus member will need to toe the party line for a simple majority to clear the bill.
Already, centrist Senate Democrats have expressed concerns about increasing taxes and prolonging unemployment benefits. Political unpalatability aside, the bill’s size and contents prove it is both fiscally corrupt and economically senseless.
The economy is currently poised for a full-scale recovery despite recent sub-optimal rehiring numbers and $6 trillion of already-injected government relief funds since the spring of 2020. However, paid family leave, medical leave, child tax credit expansion extension, affordable housing, Affordable Care Act subsidy expansion extensions, and subsidized child care – among other liberal wishlist items – are still expected to appear in the bill, in adherence to President Biden’s vision of bipartisan unity.
As though that were not enough, entitlements like Medicare that have bankrupted this country are scheduled to expand amidst the skyrocketing of inflation and debt. According to Forbes, spending was expected to exceed revenue prior to the pandemic, but the governments has lost even more payroll-tax revenue from the pandemic’s massive job layoffs.
To stave off the climate Armageddon, Democrats have proposed clean energy investment tax credits, carbon emission-lowering clean electricity standards, and emission tariffs in the form of polluter import fees. Disappointingly, the most Democrats can do to project a hint of fiscal responsibility is to double the top capital-gains tax rate and dust off age-old budgetary techniques (like sunsets, sunrises, killing the dead, clock shifts, and growth assumptions as they are known on Capitol Hill) to square the absurd math.
But of course, the assault on fiscal restraint and the rising cost of the bill that the next generation of American working taxpayers will have to foot from said reckless spending do not stop there. Even with the flimsy “pay-fors” and radical tax hikes, Democrats understand that “every major program that President Biden has asked for,” as Senate Majority Leader Chuck Schumer put it, still cannot be fully funded. In fact, the nonprofit Committee for a Responsible Federal Budget flagged reconciliation’s instruction for $1.75 trillion, in other words, half of the spending bill, to be paid for through outright borrowing and found that an honest estimate of the cost of the bill falls not around $3.5 trillion, but rather $5 - $5.5 trillion over the course of a decade. A trick among many to get to the former, an already-astounding figure, is to pretend that the programs being introduced in the bill will remain as small and as temporary as they appear in the present. While this allows Democrats to keep deficit spending barely within the 10-year budget window to avoid prompting a 60-vote threshold to take hold, no serious liberal Congress member who actually wants their base’s vote in the next few election cycles will fail to vote to extend the programs beyond the confines of these disingenuous sunset clauses. The Committee’s estimate takes this into account as well as other suspect accounting tactics that Democrats and swing constituency congresspeople plan on using to make their behemoth easier for their tax-paying voters to swallow.
However, even if Congress could legitimately pay for this untimely, and frankly, wanton spending, one truism still remains to be hurdled before Democrats can stamp their disbursements with red block letters reading “justified”: money used to finance their immoderate spending is money not spent to address America’s more pressing fiscal obstacles. Debt has already exceeded GDP a decade early, will double GDP in 30 years, and will never dip below 100% of GDP again according to Congressional Budget Office long-term estimates. Our options to mitigate fiscal disaster are already limited and unbearably uncomfortable to implement; pulling out all the stops on our resources now to finance partisan pet projects only further circumscribes our courses of action. Those who fail to recognize this must have missed Day 1 of Economics 101: opportunity cost.
Taxpayers are tired, Washington is gridlocked, and ideologies are more bitterly divided than ever, but one thing we can be sure of in this new era of dismal prospects is that if we continue down this path of fiscal prodigality, then we are on a one-way road to economic catastrophe.