If you liked the less than 10% of the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act that actually had proportionately little-or-nothing to do with economic recovery from shutdowns, you’re gonna absolutely love the Dems’ $2.3 trillion "infrastructure" plan that will likely forego highway construction and penalize your petroleum-fueled car to pay for "green" dreams with tax and national deficit increases.
Think Solyndra on steroids.
Kentucky Republican Senate Minority Leader Mitch McConnell warns that the proposed Democrat plan is primarily a "Trojan horse" for tax increases.
"That’s exactly what I think they have in mind, is to call it an infrastructure bill," McConnell told Fox News. "But, in fact, in it, they will have a massive tax increase to, in effect, reverse tax reform that we enacted in 2017 when we had an entirely Republican government."
Democrats, now owning control the White House and both chambers of Congress, are seizing upon opportunities to "go big" and push levers of bulldozer legislation through the Senate without bipartisan support.
Following Biden’s "build back better" campaign stumping pitch, infrastructure package spending will include at least $500 million to install a half-million electric vehicle charging stations across the country to support transitioning to electric vehicles. It is also expected to provide money for future federal vehicle fleets along with state and local school buses to "go electric."
The proposed infrastructure plan would install 500 million solar panels, construct 60,000 wind turbines, upgrade four million buildings, and weatherize many millions of homes. In addition, government-funded tunnels and other projects will be mandated to be built "green friendly" using concrete additives that absorb carbon dioxide.
Although the final plan is unlikely to make it through Congress before the fall, it is certain to face opposition from Republican lawmakers who object to the Biden administration’s curtailment of American fossil-fueled energy independence, unrealistic reliance on anemic and intermittent wind and solar alternatives, and a post-pandemic recovery-strangling green price tag to run our country even deeper into the red.
America’s national deficit for fiscal 2020 hit a record $3.1 trillion, bringing our national debt to more than $28 trillion.
Meanwhile, average gas prices have already skyrocketed by 50 cents a gallon since the time Biden first took office, rescinded the permit for the Keystone XL pipeline, and placed moratoriums on oil and gas drilling on federal lands and waters.
Inflationary impacts of profligate government spending and rising transportation costs are also being felt by consumers through rising prices of bread, milk, cheese, and other staples.
Making conditions worse, House Transportation and Infrastructure Committee Chairman Peter DeFazio, an Oregon Democrat, has previously proposed increasing the 18.4-cent-per-gallon federal gasoline tax. Any tax plan that raises the cost of energy will have a disproportionate impact on low-income families, and a higher gas tax will also hurt rural families, truckers, and working commuters the hardest.
President Biden wants to increase the corporate tax rate from 21% to 28%, lift the top individual tax rate from 37% to 39.6%, and increase capital gains taxes on people with more than $1 million in annual income.
"Stick it to the rich" strategies sound good, except that raising corporate and capital gains tax rates will hurt Covid business and employment recovery, along with devaluing hard-earned middle class 401(k) retirement savings accounts.
Biden’s proposed corporate tax increase alone is more than $1.5 trillion over 10 years, with another $1.5 trillion coming soon on individual income and investment. That amounts to about $3 billion a year, or 1.36% of U.S annual GDP.
And let’s realize that taxes on corporations are immediately passed on to be paid by a combination of consumers in higher prices, workers in lower wages, and shareholders in lower returns on investment.
Some conservatives, who should know better, have proposed carbon taxes which are also regressive in hurting low-income people who can least afford their impacts on commodity costs.
Grover Norquist, president of Americans for Tax Reform, led a group of dozens of conservative leaders who sent a letter to Congress pointing out that imposing taxes on the burning of coal, oil and gas would increase the costs of goods, lower take-home pay, and increase "the power, cost and intrusiveness of the government in our lives."
Democrats recognize that it will be a next to impossibly heavy lift to pass an enormously costly infrastructure bill premised so heavily on dubious climate benefits through Republican resistance. A successful attempt would require enlisting support from at least 10 Senate Republicans to overcome a certain filibuster.
The most realistic funding option for Democrats is to force their infrastructure funding package through Congress with a process known as budget reconciliation, which allows a once-a-year spending and revenue package to pass the Senate with a simple majority.
Senate Budget Committee Chairman, Vermont Socialist Bernie Sanders said that reconciliation is likely the only option. He said, "If Republicans are prepared to support a significant and important piece of legislation that deals with climate change, deals with infrastructure, that’s great…My own feeling is at this point I doubt that will be the case."
Consider that this is the same reconciliation process Democrats used to deficit-fund that previous Trojan tax horse - the $2 trillion pork-laden Coronavirus stimulus switcheroo which awarded $1,400 to each adult under a certain income cost at an average equivalent debt tab of about $6,000 for every U.S. citizen.
The stealthy new Trojan trick horse would more than double that debt.
And whereas we might generally think of "infrastructure" as going for building roads, bridges, airports, ports, and traditional public works, only $157 billion of that $2.3 trillion would be earmarked for these purposes. It would also add $85 billion for mass transit - plus an $80 billion Amtrak bailout. This is on top of the $70 billion that Congress already appropriated for mass transit in three Covid spending bills.
Another $400 billion, about two-and-a-half times more than for actual infrastructure, would somehow be justified to fund Medicaid and care workers who are "disproportionately women of color."
America can’t afford to reconcile Biden’s latest build government back bigger plan with any such mangled math ever again.
Larry Bell is an endowed professor of space architecture at the University of Houston where he founded Sasakawa International Center for Space Architecture and the graduate space architecture program. His latest of 10 books, "What Makes Humans Truly Exceptional," (2021) is available on Amazon along with all others. Read Larry Bell's Reports — More Here.