Tag: Build Back Better

Progressive Collapse

The chaos that is the defining feature of the Biden presidency is not the result of one man’s incompetence. Nor,  by itself, is it the consequence of his intellectual shallowness, advanced age, cognitive dissonance or general mediocrity, though all of these factors have played a role. 

The chaos is the result of Biden’s choice to align himself with the progressive wing of his party. And since the party has pretty much been captured in toto by said progressives, group think reigns supreme. Consider the reaction to Senator Joe Manchin’s refusal (thus far) to buckle under and support the “Build Back Better” bill. 

The headline in the Washington Post sums up the story: “Democratic bitterness, rage follow Manchin’s ‘no’ on Biden bill.” According to the Post, Representative Alexandria Ocasio-Cortez (D-NY) accused Manchin of a ”betrayal of working families across the country… and an egregious breach of the trust of the president.”

After accusing Manchin of being a liar, White House Press Secretary Jen Psaki went on to say “Senator Manchin will have to explain to those families paying $1,000 a month for insulin why they need to keep paying that, instead of $35 for that vital medicine. He will have to explain to the nearly two million women who would get the affordable day care they need to return to work why he opposes a plan to get them the help they need. Maybe Senator Manchin can explain to the millions of children who have been lifted out of poverty, in part due to the Child Tax Credit, why he wants to end a program that is helping achieve this milestone—we cannot.”

For his part, Senate Majority Leader Chuck Schumer, looking over his shoulder at a potential primary challenge in 2022 by Squad leader AOC, announced that the Build Back Better Bill would be subject to a vote on the Senate floor. Schumer is taking this extraordinary step even though the bill has no chance of passing and will damage the prospects of Senators in swing states in the upcoming mid-terms. Then again, Senator Bernie Sanders (I. Rolling Stone) demanded the vote. 

Senator Sanders reportedly said “…that Manchin should have to vote publicly and that he would “have a lot of explaining to do to the people of West Virginia” about his opposition. So it appears that Senators Sanders and Schumer along with AOC actually believe that Manchin, a fellow Democrat (which by the way Sanders, the self declared democratic socialist is not) will be punished by West Virginia’s voters. This, even though Donald Trump carried the state by 40 points in 2020, and recent polling indicates that upwards of 70% of West Virginians oppose the bill. 

Meanwhile, not to be outdone, Speaker Nancy Pelosi weighed in by saying “Well, we never give up,” Pelosi said. “This will happen, it must happen, and we will do it as soon as we can. There are conversations that are ongoing, but we cannot walk away from this commitment. The Build Back Better [Act] is about transforming our society.”

It has apparently not occurred to Pelosi et.al. that the American public is not at all interested in “transforming our society”. What the American public wants is stable prices, good schools, safe streets and reasonably competent public administration. The Democrats, have delivered none of these. 

In fact, progressive policy, with a large assist from Republican Federal Reserve Chair Jay Powell, has set off an explosion of inflation that shows no signs of abating. Parents across the country are protesting the take-over of the public schools by woke activists while school test scores (where they still have tests) continue to deteriorate rapidly. And the murder rate in big cities has skyrocketed 30% year-over-year, a record. And we haven’t even broached foreign policy. 

The reason for the chaos is the underlying (and preposterous) progressive conceit that not only can the administrative state micro-manage a dynamic free-market economy and local institutions; it can also do so competently and efficiently.  Which is to imply that bureaucrats know better than you how you should live your life. And they have the regulations to do the trick. 

Except that all they have created is economic and social destruction. The one major policy success of the last few years is the astonishingly rapid discovery and deployment of vaccines to fight the COVID pandemic. And that success was brought to you compliments of those creatures of the free-market, the drug companies. 

JFB

End of a Myth

The House just passed a version of President Biden’s “Build Back Better” bill. Only 1 Democrat, Jared Golden of Maine, voted against passage. He did so because he opposed a provision in the bill that raised the SALT cap retroactively from $10,000 to $80,000. 

The House vote finally and unequivocally explodes one of the more cherished myths of the punditocracy, namely that there are “moderates” among elected Democrats. Consider what the party just voted for after having already voted to spend $1.9 trillion for “COVID relief” in March, and an additional $555 billion for infrastructure in early November. And that is on top of the regular federal budget of about $4 trillion. 

The House bill nominally spends an additional $1.85 trillion over 10 years to greatly expand the welfare state. It includes a program of universal pre-kindergarten, child care subsidies that extend well into the middle class, more financial aid for college, billions more for housing, expansion of Medicare with a new hearing benefit, and (of course) price controls for prescription drugs. 

Democrats claim the bill will “only” cost $1.85 trillion. But of course the cost will be higher; in fact much, much higher. The Committee for a Responsible Budget estimates the  true cost of the bill to be as high as $4.9 trillion. According to the National Taxpayers Union (NTU), the Wharton School of the University of Pennsylvania earlier came up with an estimate of $4.13 trillion. 

The reason for the difference between the estimates produced by the Congressional Budget Office (CBO) and private forecasters is not the fault of the CBO. They are required to forecast based on a set of rules. The Democrats simply gamed the rules (as Republicans have done when they had the power). In brief, the Democrats only funded about 5 years of programs (hence the lower estimated costs) but increased taxes over the entire 10 year period (hence a reduced estimate of the deficit). 

But this maneuver fools nobody. Of course the programs will be renewed. As Milton Friedman once said, there is nothing as permanent as a temporary government program. The reason is simple. Program benefits are concentrated but costs are dispersed. The programs will naturally build up constituencies to defend them. Moreover the taxpayers are being deceived into believing that only “the rich” will have to pay higher taxes. So, they are told, for the vast majority the new programs are “free”.

However, lower and middle income earners will certainly pay for these programs, but the taxes will be indirect, by design. For example, corporations will be taxed more heavily. But corporations don’t actually pay taxes; they just pass them through in the form of higher prices for consumers, lower wages for employees and lower returns for shareholders. The mix of costs varies by industry and firm. But the middle class will pay one way or the other.

How about drug prices, that are now to be subject to price controls? The public will pay for that particular bit of economic illiteracy with the drugs that are not produced. Think about the COVID-19 vaccines that were produced in record time. That was (partially) the result of decades of research and development (including Intellectual Property) that was decades in the making. But the imposition of price controls lowers expected future profits while leaving development risks unchanged. The result is reduced capital commitment to R&D and fewer new life saving drugs discovered. 

Then there is the development of universal pre-kindergarten programs, funded by the federal government. Reflect for a moment on the irony. School boards across the country are erupting with parents protesting what the public schools are teaching their 7-year olds. Now Democrats want to unleash the bureaucrats who made such a mess of it on 3-year olds. 

The fact is, all but one of the House Democrats have voted in favor of a vast expansion of the welfare state. The programs in the bill are designed to create a subservient population easily subjected to the command-and-control whims of progressives. To accomplish that objective progressives lied about the cost, lied about the financing and handed out taxpayer financed gifts to their trade union allies, public sector unions, trial lawyers and high property tax blue states like, New York, New Jersey, California and Connecticut. 

With their votes for the Biden spending bill,  Democratic House members demonstrated beyond all reasonable doubt that there is not a single moderate  in the House Democratic caucus. Not one. 

JFB