It may seem like things have quieted down in Washington, but don’t be fooled. Staffers are working around the clock to hammer into some twisted shape a reconciliation bill that can get support from the warring factions of their party to “transform America.”
Prof. Chuck Blahous analyzed the 2,448-page $3.5 trillion+ reconciliation bill that Democrats in Congress are working on. He looked at the health benefit proposals in particular, including “further expansions of Medicare, Medicaid and so-called Obamacare—[which] represent a major escalation of the fiscal irresponsibility lawmakers have practiced for the past several years.”
The cradle-to-grave subsidies will create a welfare trap for millions more Americans, send inflation soaring, and drive our nation much deeper into debt.
Former White House chief economist Casey Mulligan, now University of Chicago professor, writes the bill would “implement the single largest permanent increase in work disincentives since the income tax came into its own during World War II…
“The implicit employment and income taxes in [the bill] would increase marginal tax rates on work by about 7 percentage points. I expect that such a change in the disincentive would reduce full-time equivalent employment by about 4.5%, or about 7 million jobs.”
University of Chicago Prof. Charles Lipson writes in “It’s Not the Top-Line Number – It’s the Bottom-Line Goal” that we have to look at how the bill would fundamentally transform the United States into a European social welfare state.
“Progressives know — and the whole country should understand — that piling on these vast new programs would be a major step in turning the United States into a European-style social democracy, along the lines of France, Germany, Spain, or Italy,” Lipson writes. “Voters never elected Biden to do that.”
The legislation is so huge and complex that even the Congressional Budget Office says “it is unclear” when it will be able to estimate the cost of the full reconciliation package, which is itself a moving target.
CBO Director Phillip Swagel wrote in a letter to Sen. Mitch McConnell this week: “The agency has not estimated how the entire package would affect direct spending, revenues, deficits, or spending that would be subject to appropriation. CBO also has not completed its analysis of all of the mandates that the bill might impose on intergovernmental or private-sector entities.”
In fact, agency experts are having to spend time with congressional staff drafting the legislation instead of doing its primary job of producing cost estimates.
Goodman Institute President John Goodman writes in The Daily Signal that the proposed bill is “throwing good money after bad” instead of focusing “on rational reform of existing programs.” And largely because so much of the new spending is entitlements, “the Committee for a Responsible Federal Budget estimates that the full cost is not the $3.5 trillion that has been widely advertised, but at least $5 trillion and possibly as much as $5.5 trillion.”
And there are other huge costs to the economy apart from direct federal spending. According to an analysis by Tara O’Neill Hayes for American Action Forum, it would cost $171 billion in the first year just to provide the salaries and facility spaces to meet the demand for increased child care newly subsidized in the bill.
If you’ve read the newsletter this far, please take another few minutes to click through to Blahous’ “A Pictorial Guide to Congress’ Irresponsible Health and Budget Proposals.” He shows that the Democrats’ proposed legislation “adds substantially to runaway federal spending that is already outpacing U.S. economic output.”
Dr. Blahous shows, in a dozen or so charts, how the spending blowout will impact the vast number of programs impacted. “In practical terms, the current trend must stop far sooner than that because no population will tolerate its discretionary income perpetually shrinking to support lawmakers’ addiction to promising bigger health benefits.”
Halloween is the new target date for passage. We should all be scared. When even the CBO is daunted in figuring out how much the monstrous bill would cost, it is way past time to press “pause,” as West Virginia Sen. Joe Manchin pleads.