Biden’s Big Bill Full of Nonsense Signifying Trouble
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
President Biden’s infrastructure bill is a shopping cart full of left-wing causes, most of which have nothing to do with infrastructure. There is nothing in principle particularly wrong with omnibus bills covering a number of different policy objectives, but such misnomers as this proposal and the preceding Covid relief bill, 90% of which had nothing to do with the coronavirus, are irritating and insulting to the intelligence of the public.
The president is absolutely right to wish to address inadequate roads and bridges and railways and other notorious shortcomings of the country’s basic services, and he is right to address the hydroelectric system in Texas, which failed so badly in the recent storms. This is one of the few areas, along with healthcare, where President Trump had promised action and failed to deliver it, and President Biden does deserve credit for moving to address these problems.
However, there are two particularly serious failings in the measure that he revealed in Pittsburgh on Wednesday afternoon. It is the largest peacetime tax increase in American history and it attempts to attach to infrastructure improvement climatological and environmental goals that have nothing to do with the purported subject to the legislation and are in themselves substantially spurious.
It is nonsense to spend $174 billion in such a bill as this to install half a million charging stations in the next nine years for electric vehicles which make up about two percent of new auto sales in the United States. It is also nonsense to retrofit a tokenistic two million homes to increase energy efficiency on the fatuous grounds that they are low-income and minority communities which are most vulnerable to climate change.
No one would dispute that it is a reasonable public policy objective to expand access to medical care for the elderly and disabled, but not the insertion of $400 billion for it in what is billed as an infrastructure and jobs bill.
The administration has not made a successful argument on climate change, and it is either a matter for further research before hurling vast chunks of money escalating the outrageous war against the oil and gas industry, or if there were adequate evidence to justify a full-scale carbon reduction effort, it should go far beyond the minor increments that are provided here. The creation of an “energy efficiency and clean electricity standard” is a dubious goal of questionable utility and doesn’t belong here.
The most glaring misnomer is the title of the measure, the American Jobs Plan. Tax increases must occasionally occur, but there has never been a tax increase in American history that did not have a negative effect on the economy. Since what is proposed here is to raise taxes on all those whose income is $400,000 a year or more and on all businesses by fully a third, putting American corporate tax rates above almost any other economically sophisticated country, it will have a negative effect on employment.
The country might have hoped that after the unmitigated fiasco of President Obama promising twelve years ago to create a vast slew of green jobs, none of which materialized, and after environment czar John Kerry’s admonition to oil pipeline and offshore oil exploration workers who were being laid off, to go and get “union jobs making solar panels,” the administration would be less cavalier about sharply curtailing economic demand in the system while reducing the ability of corporate America to pursue job creation.
While the president is amiable and professed his support and admiration for those who by their own initiative become legitimately wealthy, and he certainly avoided soak-the-rich invective and the old vocabulary of class warfare, he completely ignored the principle underlying economic facts: under the Trump administration there were, just prior to the Covid outbreak, 750,000 more jobs to fill than there were unemployed, and the lowest 20% of income earners were gaining income in percentage terms more quickly than the top ten percent. The United States became the first serious jurisdiction in the world that had begun to address the almost universal problem of income disparity.
By the Biden administration’s combination of opening the borders to a flood of unskilled workers who will put a rod on the backs of America’s working-class and betray that important traditional component of the Democratic voting coalition, going back to the first term of Franklin D. Roosevelt, and tax increases to restrict the ability and motivation of American employers to hire, all this progress will be squandered at once.
Another deeply annoying aspect of the president’s presentation is his continued insistence that the Trump tax cuts only benefit the wealthy. President Trump’s tax cuts reduced the taxes of every American corporation and the taxes of 83% of individual American taxpayers.
The only taxpayers whose rates were not reduced were relatively wealthy citizens of chronically mismanaged Democratic-governed states such as New York, California, and Illinois, where administrative ineptitude had forced those states into imposing their own income taxes.
The Trump administration determined that incompetently run states should no longer be favored by having federal taxpayers pick up the bill for state income taxes imposed to pay for the extravagance and negligence of big spending, high taxing, heavily over-borrowed state governments.
This is another big and sloppy bill, feeding the Democratic constituencies and trying to sell the canard that throwing borrowed money out of the windows will do more for employment than fiscally incentivizing the private sector to grow. These endless expansions of the money supply are already jacking up inflation. The administration’s catastrophic energy policies have more than doubled the cost of a tank of gasoline.
Know this: If this ramshackle, misnamed, blunderbuss of a bill is adopted, inflationary pressures will build, and if federal debt interest rates start to rise, anyone capable of passing out of a grade one arithmetic class will run for what the left used to call the “commanding heights” of the economy — but if this bill passes, the heights will be laid low.
CMBLetters@gmail.com. From the National Interest.