When Money's No Object
Last year, Joe Biden campaigned for president on a theme of the United States returning to normalcy, and at least in one regard… we have. Democrats in D.C. are back to spearheading trillions in new spending for initiatives that go far beyond the stated purpose of that spending, while Republicans are again pretending — after the national debt grew by $7 trillion on President Trump’s watch — to be fiscal hawks.
Last weekend, the U.S. Senate voted purely along partisan lines (50-49) to approve Biden’s American Rescue Plan (ARP), with the bill going back to the House later this week to be finalized. The price-tag of this COVID relief legislation: a whopping $1.9 trillion.
For some frame of reference, that’s larger than the size of Canada’s entire economy.
Needless to say, it sure would have been nice if President Trump hadn’t spent two months suppressing the Republican run-off vote in Georgia by promoting baseless election fraud conspiracies. If the GOP had held the Senate, and been in a more effective position from which to play their part as the loyal opposition, the bill would have looked quite a bit different.
Some of the ARP provisions are certainly defensible as COVID-related assistance and economic stimulus (like direct payments to individuals and vaccine funding), but the legislation is overflowing with wasteful spending that has little (if anything) to do with the crisis at hand.
For example, $86 billion is being spent to bail out long mismanaged union pensions, and $350 billion is being sent to state and local governments to balance their books.
Senator Mitt Romney, in his opposition to the bill, explained the problem with the latter: “There was an assumption states had massive revenue losses associated with the COVID experience, but the data that has come out since then shows many states did not.”
Romney’s right, according to a report from the Urban-Brookings Tax Policy Center. While some states in fact have seen large drops in tax revenue during the pandemic, most didn’t. In fact, some even saw increases in revenue.
The biggest beneficiaries of this provision will be local governments with longtime financial problems that had little to do with the health crisis, and a lot to do with bad governance and runaway spending. They’ll be getting big federal bailouts that aren’t conditioned on reforms to fix the problems that put those localities in financial peril in the first place. For example, the ARP will nearly erase San Francisco’s projected $650 million budget deficit, no strings attached.
Another thing the ARP ignores is that the U.S. economy as a whole has strengthened significantly since mid-January, when Biden first announced his plan. While 306,000 jobs were lost in December, the economy added back 166,000 in January and 379,000 in February. The growth has beaten expectations and dropped the U.S. unemployment rate to 6.2 percent.
With the holiday COVID surge over, and vaccine efforts ramping up in a very big way, the outlook for the economy is looking increasingly strong for the foreseeable future... even without the help of more federal stimulus.
Senator Rob Portman made this point in a statement explaining his vote against the bill: “…the nonpartisan Congressional Budget Office (CBO) said recently that without any additional stimulus the economy will recover to pre-pandemic levels by mid-year.”
With our economic growth and very promising forecast, there’s no serious non-political rationalization for a rescue package this size, especially when it’s filled with so much waste and non-rescue funding. And it's coming at a time when our country’s national debt just passed $28 trillion (making it larger than the entire U.S. economy itself). Does anyone care?
Of course, that question is 110% rhetorical. Just about everyone in congress who genuinely did care was either chased out of D.C. (and effectively the Republican Party) over the past four years, or compelled by the altered political landscape to stop caring.
That said, 11 Republican Senators (led by Susan Collins) did put together an alternative bill — one more targeted and less wasteful that would have cost $650 billion. But since the GOP is now the minority party in the Senate, the bill, of course, never stood a chance. And the effort certainly didn't save Collins and her Republican colleagues from being framed as heartless monsters — the default progressive reaction to any Republican who votes no on a Democratic spending bill:
Like I said, things are getting back to normal. Only, the left now has another (rather effective) attack line they can use in these situations:
Every Senator that puts out a statement today saying they couldn’t vote for the stimulus because it would add to the debt, please look back at the growth of the debt under Trump that you gave zero fucks about. Then take your statement & shove it somewhere uncomfortable.
— Mattie Timmer (@MattieTimmer) March 6, 2021
The most consequental political casualty of the last four years has been fiscal conservatism. The GOP joined the Democrats in rejecting even its mere premise, and they did so purely in the interest of tribal servility.
I'd say, "I hope it was worth it," but when the prevailing mindset is that money's no object, that answer — unfortunately — will always be yes.
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