One of the current issues facing the U.S. economy is more demand than supply can keep up with. Part of the issue has been government programs that have incentivized workers to stay home, and the result is a labor shortage and a record number of job openings, while the workforce participation rate drops to the lowest in decades.
In the meantime, Democrats on Capitol Hill have been busily working on a new spending package.
The cradle-to-grave subsidies in the 2,448-page, $3.5 trillion spending bill that Democrats in Congress are crafting will create a welfare trap for millions more Americans, send inflation soaring, and drive our nation much deeper into debt.
Economic policy professor Chuck Blahous of the Mercatus Center at George Mason University analyzed the health benefit proposals in the spending bill. He wrote that expanding Medicare, Medicaid, and “so-called Obamacare” will “represent a major escalation of the fiscal irresponsibility lawmakers have practiced for the past several years.”
Former White House chief economist Casey Mulligan, now a professor at the University of Chicago, wrote that the spending bill would “implement the single largest permanent increase in work disincentives since the income tax came into its own during World War II.”
“The implicit employment and income taxes in [this legislation] would increase marginal tax rates on work by about 7 percentage points,” he wrote. “I expect that such a change in the disincentive would reduce full-time equivalent employment by about 4.5%, or about 7 million jobs.”
“Progressives know—and the whole country should understand—that piling on these vast new programs would be a major step in turning the United States into a European-style social democracy, along the lines of France, Germany, Spain, or Italy,” Lipson wrote. “Voters never elected [Joe] Biden to do that.”
…the House reconciliation bill would let the Internal Revenue Service peer into the bank account of virtually every American. …Here’s the proposition: You permanently sacrifice your financial privacy, and the Democrats get a small step closer to funding their agenda. …Treasury secretary Janet Yellen claims the IRS will overcome perennial bureaucratic incompetence and track down “opaque income streams that disproportionately accrue to the top.” …If it’s high earners we’re worried about, why spy on everyone? …The administration is seriously arguing for a new oversight regime that would gather data on nearly every American on the off chance that a billionaire opens several thousand bank accounts. …this move on bank accounts would represent a new, jaw-dropping level of federal intrusiveness and is a power no government should have. Biden officials from Yellen on down have had trouble defending it — because it is literally indefensible. -- National Review----------------------------------------
Congressional Budget Office Director Phillip Swagel wrote in a letter to Senate Minority Leader Mitch McConnell, R-Ky., last week, “The agency has not estimated how the entire package would affect direct spending, revenues, deficits, or spending that would be subject to appropriation. [The Congressional Budget Office] also has not completed its analysis of all of the mandates that the bill might impose on intergovernmental or private-sector entities.”
He says that instead of doing their primary job of estimating costs, Congressional Budget Office experts are spending time with congressional staff drafting the complex bill.
John Goodman, president of the Goodman Institute for Public Policy Research, wrote that the proposed bill is “throwing good money after bad” instead of focusing “on rational reform of existing programs.”
Because entitlements comprise so much of the new spending, Goodman wrote, “The Committee for a Responsible Federal Budget estimates that the full cost is not the $3.5 trillion that has been widely advertised, but at least $5 trillion and possibly as much as $5.5 trillion.”
Apart from direct federal spending, there are other huge costs to the private economy. It would cost about $171 billion in the first year just to provide the salaries and facility spaces to meet the demand for increased subsidized child care, according to an analysis by Tara O’Neill Hayes of American Action Forum.
Blahous’ “A Pictorial Guide to Congress’ Irresponsible Health and Budget Proposals,” shows that the Democrats’ proposed legislation “adds substantially to runaway federal spending that is already outpacing U.S. economic output.”
In a dozen or so charts, Blahous shows how the spending blowout will influence the vast number of affected programs. “In practical terms, the current trend must stop,” he wrote. “No population will tolerate its discretionary income perpetually shrinking to support lawmakers’ addiction to promising bigger health benefits.”
Halloween is the new target date for passage. We should all be scared. When even the Congressional Budget Office is daunted in figuring out how much the monstrous bill would cost, it is way past time to press “pause,” as Sen. Joe Manchin, D-W.Va., pleads.