Democrats are moving forward with a reckless tax and spending spree. They are proposing enacting the largest single spending and tax increase in U.S. history. Along with it, a massive increase in the size and scope of government.
Senate Budget Committee Chairman Bernie Sanders called his budget plan “the most significant spending on government programs since the Great Depression.” House Budget Committee Chairman John Yarmuth said they were going to pass “the biggest bill in the history of the country.”
After passing a $1.9 trillion spending bill just a few months ago, congressional Democrats now want to spend $1.2 trillion on an infrastructure bill and $3.5 trillion on another reconciliation bill. That’s $6.6 trillion in new spending in a few months. Add that to the $3.6 trillion in spending on pandemic relief enacted last year and you have $10.2 trillion in new spending in just 1 1/2 years.
This is quite extraordinary stuff.
To put $10.2 trillion in perspective, it equals half of our gross national product, or half the size of the U.S. economy. It is one and a half times the amount of money people have saved in their 401K accounts. For an even broader historical perspective, $10.2 trillion is three times the total amount of money the federal government collected in taxes in 2020.
It is equal to the total amount of money the federal government spent in the 30 years between 1960 and 1990. And $10.2 trillion is equal to the total amount of taxes employees and employers paid in Social Security payroll taxes in the 43 years between 1960 and 2003.
This massive spending spree will see the federal government spend nearly $70 trillion over the next 10 years and even more if temporary spending programs are made permanent. Massive tax increases will accompany the massive spending, with Democrats proposing the largest tax increase in our nation’s history. Under this budget, individual taxes will more than double over the next 10 years. Corporate taxes will more than triple.
Millions of people earning far less than $400,000 will pay for these tax increases in lower wages, higher prices, and lower retirement savings. Even with record-breaking tax increases, federal deficits will soar, running at more than $1 trillion a year for the next 10 years. The debt will nearly double, reaching a level never before reached in our history, even during World War II.
The reckless amount of taxes, spending, deficits, and debt will cripple our economy and our country. Generations of working middle-class people will pay for it for years to come.
This tax and spending spree will fuel even more inflation, which is now rising at the fastest pace since 2008. The corporate tax increases will lead to lower wages and fewer jobs. With the economy starting to stall, this budget will stop the economic recovery in its tracks. Democrats have overreached on tax and spending in the past, and they have paid a steep price for it every time.
In 1993, Democrats passed a massive tax increase, increasing individual and corporate tax rates, on a party-line vote. In the 1994 midterm elections, Democrats lost control of the House and the Senate, losing 54 seats in the House and eight seats in the Senate.
In 2009, Democrats passed a massive fiscal stimulus bill, tried to pass a cap and trade bill, and pushed through Obamacare on party-line votes. In the 2010 midterm elections, Democrats lost control of the House, losing 63 House seats and seven Senate seats.
The lesson is clear. The people do not support partisan, big government overreach by the party in power. This reckless tax and spending spree could put Democrats back in the minority again in 2022.
Bruce Thompson was a U.S. Senate aide, assistant secretary of the treasury for legislative affairs, and the director of government relations for Merrill Lynch for 22 years.
