In the second installment of news the Biden administration didn’t want to hear about Friday (the first being the record-breaking inflation report), the Congressional Budget Office (CBO) released an analysis of making permanent the programs in Democrats’ Build Back Bankrupt spending spree.
Democrats immediately claimed the bill they want to pass through Congress doesn’t resemble the CBO’s parameters in the slightest. In that case, Republicans should respond by bringing a legislative proposal resembling those parameters to the Senate floor, and forcing Democrats to vote against it.
Trillions in Additional Spending
The analysis, conducted at the request of congressional Republicans, examined 19 separate policies included in the House-passed bill. The Republicans asked CBO to provide the costs of extending all the programs for the entire ten-year budget window—and the results proved shocking.
Making those 19 programs permanent raised their ten-year cost from approximately $891 billion over the decade to nearly $3.5 trillion, a four-fold increase. The costliest policy, a larger child welfare subsidy, went from a $185 billion cost for a one-year extension in the bill to $1.6 trillion over a decade. In short, the analysis exposed the inherently gimmicky nature of using permanent tax increases to pass temporary increases in spending.
Make no mistake: Democrats do want to make those programs permanent—most of them, anyway. Perhaps they would let some of the smaller programs included in the CBO analysis, such as greater insurance subsidies for the unemployed, expire as scheduled in the bill. But they will definitely seek to make the biggest programs—the child welfare subsidy, “free” federalized child care and preschool, Obamacare subsidies, and home health care—permanent.
Why All the Temporary Policies?
Democrats called the analysis disingenuous, claiming the bill will not increase the deficit by $3 trillion, the outcome CBO arrived at if the 19 programs get extended without offsetting revenue increases or spending cuts. Treasury Secretary Janet Yellen claimed in a Thursday “pre-buttal” memo that “the president has been clear that any long-term policies should be paid for….Any analysis that assumes otherwise is an inappropriately [sic] analyzing the Build Back Better Act.”
That claim won’t answer one simple question: If Democrats want to make all, or even most, of these programs permanent, why are they creating them on a temporary basis, in several cases for as little as one year? After all, given escalating talk about Republicans taking back one or more chambers of Congress next year, why on earth would President Biden and House Speaker Nancy Pelosi, D-California, want to risk letting any of these “essential” programs expire?
None of the likely answers suggest anything other than political gamesmanship as the explanation:
- Democrats don’t want to pay for extending the policies, even though they claim otherwise at present;
- Democrats do want to pay for extending the policies, but the extensions will require economically and politically painful tax increases, including on the middle class, of such a magnitude that they dare not advertise them now; and/or
- “Moderate” Democrats won’t agree to vote for $5 trillion of spending in one fell swoop, so Democratic leaders will let them vote for it in smaller increments of “only” a few trillion at a time.
Call Democrats’ Bluff
In response to all this political gamesmanship and policy gimmickry, Republicans should call Democrats’ bluff and give them what they want—or at least what Democrats say they want. Republicans should offer an amendment fully extending the 19 policies in the CBO report, paid for by offsetting tax increases, and demand a vote on the proposal during the Senate’s “vote-a-rama.”
Mind you, Republicans shouldn’t vote for such a proposal themselves, but they should offer it, and see what Democrats do. While unorthodox, this idea has three important strategic advantages.
First, if the current version of the legislation passes, Democrats will spend the next several years arguing for extensions of the various “temporary” policies in the bill. Offering this amendment will give Republicans an easy rebuttal to any attempts to extend the various programs: We gave you the chance to make these policies permanent, but you voted no.
Second, any Democrats who vote against the long-term proposal, but for the “temporary” spending—and some will undoubtedly want to do so—will immediately face questions. If you support these policies, why do so only for a year or two? Conversely, if you oppose making these policies permanent, why did you vote for them at all?
Third, Republicans may not be able to compile enough tax increases to pay for an additional $2.6 trillion in spending without hitting the middle class. At some point, tax rates will become so high (e.g., a 90 percent rate on “the rich”) that people will stop working, reducing rather than increasing revenue to the Treasury.
If Republicans reach that point when drafting this proposal, they should certainly advertise that Democrats cannot make the policies in their bill permanent without either 1) raising the deficit or 2) raising taxes on people making under $400,000 per year, thereby breaking candidate Biden’s campaign promise.
Boiling Lobster Pots
My greatest regret in my time on Capitol Hill came in the early months of 2010, when House Republicans failed to stop Obamacare when they had a chance. After Republican Scott Brown won a special election to the Senate, Democratic lawmakers panicked. Instead of taking the initiative and forcing a vote on Obamacare while Democrats remained shell-shocked, Republicans gave Pelosi the time to rally her troops and ram the bill through.
The same analogy applies here. Republican leaders should throw the proverbial lobster into the boiling pan, rather than allowing Biden and Pelosi to turn up the heat slowly. With a little luck, forcing Senate Democrats to swallow $5 trillion of socialism in one fell swoop could give them quite a case of indigestion.
Source: The Federalist
