What did they know and when did they know it? The ‘they’ in this case is the five Republicans who participated in the final bipartisan infrastructure session with President Biden. It sure looks like they were double-crossed in a classic bait-and-switch, a victim of a big lie in full public view.
By all accounts, the idea of using a hard link to a hard infrastructure bill compromise with a multi-trillion dollar tax and spend and Green New Deal and entitlement wave was never discussed, not in the group of the ten senators who met with Mr. Biden Thursday, nor with the bigger group of 21 senators who endorsed their work, or with the White House itself.
“In endorsing the deal,” according to a Republican aide, “Biden praised the group for ‘keeping their word’ but then immediately broke his.” Nor did he President mention this linkage at the news conference with the infrastructure ten.
Reporter: Are you committed to the two-track system Mr. President? Are you committed to the two-track system?
Mr. Biden (walking away): That is — there is going to be a two-track system
Reporter: And are you confident that you’re going to have all of the democrats support in the Senate?
Mr. Biden (walking away): Let them talk to you, okay?
Then, one hour later, he offers this word salad:
Look, the bipartisan bill from the very beginning was understood. There’s going to have to be the second part of it, not just sign the bipartisan bill. And forgetting about the rest of it, I proposed. The infrastructure bill, as well as voted on the budget resolution. And that's when. But if only one comes to me, I’m not. This is only when it comes to me. I’m not signing it. It’s in tandem.
It’s now very clear that the double-cross was always the Democrats’ strategy. Bernie Sanders has been talking about it. Nancy Pelosi has been talking about it, but Mr. Biden during the good faith bipartisan negotiations was not talking about it. He’s the most important person. Mrs. Pelosi later said there will be no infrastructure vote in the house until the reconciliation bill is passed.
Meanwhile, I feel the pain of the Republican negotiators . People like Rob Portman and Susan Collins and Bill Cassidy are principled people of good faith. In Senator Rob Portman’s notes, the number one note was: No income taxes; no changes to the 2017 tax bill; and number three: solely core infrastructure priorities (not human infrastructure).
Mr. Portman is a smart man and a man of principle. He wouldn't have said that if Mr. Biden didn't agree to it. So I’m not going to blame them just because we have a president who has no moral principles, is dishonest, is over-run by the far left wing of his party and will do anything to make a short-term political buck.
Just for the heck of it, let’s remind ourselves, that we’re talking about $4 trillion of additional spending. Actually, the trillion infrastructure deal may wind up being folded into that some during reconciliation. I say this because as a former green eye shade in Reagan’s budget office and as a negotiator in President Trump’s National Economic Council, I know that there can be no reconciliation until there is a budget resolution from both the House and the Senate and right now they are nowhere near a budget resolution.
On top of that, the Senate parliamentarian, Elizabeth McDonough, has already outlawed this phony, nonsensical IRS tax grab, where you put in $80 billion and somehow magically pull out $700 billion in revenues. The infrastructure group is more realistic, thinking you can put in $40 billion and get out $60 billion. For for more IRS agents, the Democrats think they'll collect $700 billion in previously uncollected revenues from tax cheats. They'll never see the money.
The Green New Deal in all of its obsessive and hysterical majesty is part of the Democrats’ worker paradise utopian strategy. Does anybody think that’s going to pass? we’re going to end the combustion engine in a couple years? We’re going to surrender to the lesser male prairie chicken as an endangered species, which would take out roughly 75% of our oil production and give the keys to the kingdom to Russia, China, and Iran?
Or the so-called family infrastructure? We might better call it the “Destroy the Family Infrastructure Bill,” for it would heap on entitlement transfer benefits without work requirements or other employment incentives and would keep unemployment and family breakup high. That would do great damage to minority groups. Didn’t we learn from the Great Society? Didn’t President Clinton and Speaker Gingrich show us the right way by linking benefits and work?
Is anybody going to read Jason Riley’s great book “Maverick” about African American economist Thomas Sowell? And his Hayekian freedom and opportunity philosophy personified by his own personal up from the ghetto experience? Or Senator Tim Scott’s marvelous speech emphasizing supply side tax cut incentives and opportunity zones? And hard work instead of welfare dependency?
Or Ben Carson’s great work arguing for equality of opportunity at the starting line but opposing equity at the finish line. That’s not family infrastructure. That’s damage the soul of America via Bulgarian-type command and control poisoning the spirit of America. The democratic alternative is about $3 trillion in tax hikes assaulting large companies, small companies, investments, worker wages, family farms, and ranches.
Jacking up the corporate tax damages the blue-collar middle-class the most. They shoulder 70% of the burden in terms of lost wages and jobs. Abolishing fossil fuels would cost millions of jobs and wages and family incomes. Doubling the capital gains tax is simply another tax on companies and investments for new startups and expanding the buildup of new plants and technological equipment.
Giving the Group of Seven the power to tax Americans and American companies. another absolutely nutty idea — particularly in the country that raised its Revolution against taxation without representation. Putting in a global minimum tax would not prevent Europe from a big digital sales tax on American companies. Putting in a minimum domestic tax would damage investment and the workforce by disallowing immediate expensing and depreciation.
Let’s be clear. The so-called reconciliation goals of the Democrats would do enormous damage to our economy, our stock market, and our workforce. Leading think tanks have already estimated large scale losses in GDP, employment, and the capital stock as a result of these far-left policies.
The fact that Joe Biden — who ran as a uniter, who even up until late afternoon yesterday swore he was in favor of bipartisanship — has led a double-cross and caved in to the progressive left’s socialist policies, their attack on success, their efforts to redistribute income rather than grow the economic pie, and their arrogance to ignore the clear historical results of the failure, time and again, of countries that have adopted the state-run economic model.
From Mr. Kudlow’s broadcast on Fox News. Drawing by Elliott Banfield, courtesy of the artist.