The Sum of All Fears
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.
So what did they hide, and when did they hide it? Key Democratic committees — Ways and Means in the House and Finance in the Senate — are marking up unheard of spending and taxing plans. Right now. Yet they are not telling the public what they’re really up to.
The answer to “what did they hide?” and “when did they hide it?” is that they’re hiding it now, and information is starting to leak out on specifics. There’s no question that the Democrats want this $3.5 trillion reconciliation, which is really going to be more than $5 trillion, to avoid public scrutiny and to roll rapidly through both houses just to get it done.
Some say that it’s going to be a 10,000 page bill and that literally no one is going to know what’s in it. I remember when, a month or so back, I asked Senator Shelley Moore Capito, who is a friend, whether she’d read the 2,000 page infrastructure bill. She smiled and said she got through half of it. She was one of my great hopes that actually might know what’s going on in the second half of the bill.
This one — 10,000 pages worth — no one will know. Trust me. Not before, during, or after. It will take many years to figure this out. That’s just the specifics. In terms of the negative consequences, we won’t know for many years after that.
This is why Joe Manchin’s idea to “pause” the process is a good one — if he sticks to it. The senator’s track record is not fabulous, but hope springs eternal in the Mountain State. Meantime, there’s such a thing in Congress as regular order. Got it? It’s one of the most important concepts in democracy.
Regular order. It means that even in highly partisan bills, normal process is an open markup to thoroughly examine and debate key proposals. Policy experts on both sides of the aisle testify in open session to discuss these massive new programs. This is a time-honored tradition.
After the public testimonies, members then go back and discuss. Then they vote inside the committee to bring it to the floor of the Senate. This is not happening. Instead, Democrats are hiding the policies, foregoing any discussions, and avoiding score cards from the Congressional Budget Office and Joint Tax Committee.
That scoring will eventually come. The reconciliation instructions call — explicitly — for deficit reduction by not less than $1 trillion over the 10 year period ending in 2031. Trust me, there will be nowhere near a trillion spondulix in deficit reduction. Instead there will be significant deficit increases even with the largest tax hike in more than half a century.
Republican senators on the Finance Committee have just issued a press release calling for a full and open markup. Don’t hold your breath, friends. Now I don’t want this process issue, important as it is, to obscure the unprecedented cradle to grave spending increases. This will generate an unprecedentedly high social safety net.
Expanding Medicare and Medicaid. Expand the funding for child care. Universal Pre-K. Expanded refundable child tax credits paid monthly. Food stamps. School nutrition. Free community college, income supplements. Workforce training programs. This amounts to unprecedented dependency on government welfare and far left progressive planning schemes.
I just think of it as “go woke, go broke.” It’s redistribution on a grand scale. Take from Peter to pay Paul. We used to laugh at that. When workfare was introduced by President Clinton and Speaker Gingrich 25 years ago, we thought this kind of left-wing wishlist would never come to pass. Workfare worked. The economy flourished.
What’s happening now, though, is no workfare, and no work. In fact take the “r” out of work and you have “wok” — sure, go ahead and add an “e.” It’s still woke.
The great Art Laffer has pointed out that redistribution has damaged both sides — those whose success is penalized and those who depend on welfare lose all initiative to work. The economy suffers. And speaking of economic suffering, the list of tax hikes being hidden by the tax committees, though it has been starting to leak out today, is unbelievable.
Of course, we knew of the centerpiece policies of corporate taxes, international taxes, capital gains taxes, individual taxes, small business taxes, estate taxes, all that stuff has been out there for quite a while. It’s a tax assault on business and investment that will cripple the economy, generate higher inflation, and be paid for mainly by the blue-collar middle-class workforce.
Wait, though, there’s more. In a desperate revenue search, the Senate Finance Committee is looking at a stock buyback tax, a corporate alternative minimum tax, and a tax on so-called high salaries.
Not to mention a tax on CEO pay disparity, a tax on unrealized capital gains, a tax on carried interest, an end to the 20% small business deduction, a tax on estate planning, limits to active business losses, a tax on so-called mega retirement accounts, new bank reporting requirements for all depositary inflows and outflows, a plastics excise tax, a carbon tax, a fossil fuel tax, and what amounts to an international tariff on carbon emissions.
Now, the sum total of all this — call it the sum of all our fears — is to inflict major damage on the economy and the middle-class workforce, and investors. There will be consumer price hikes. Leading economic models have already scored this. Now the Democrats are adding to the tax damage.
That doesn’t include additional measures that will be hidden in a 10,000 page bill — features like illegal immigration amnesty, unionization via the so-called Pro Act, which stands for Protecting the Right To Organize Act. Lord knows what else (if even the Good Lord can find time to read a 10,000 page bill). And we haven’t even gotten to the Green New Deal.
This is the Democratic wishlist to transform America by exponentially raising the welfare state and exponentially punishing the productive side of the economy. This is a dodging regular order to give big government socialism a humongous boost and bury free enterprise capitalism. If and when all these details get out to the public, the vast majority of Americans are going to hate this.
The vast majority of Americans favor free market capitalism and oppose big government socialism. That’s precisely why the Democrats are doing as much as these can to hide these policies and get the legislation passed before anyone gets through reading the first 500 pages, let alone the last 9,500.
From Mr. Kudlow’s broadcast on Fox News. Image: The Boston Tea Party revolt against King George’s taxes, hand colored lithograph, Currier & Ives, 1846. Via Library of Congress.