It's uniquely terrible even by the abysmally low standards we expect from Congress.
House Democrats voted recently to pass the so-called “Build Back Better” plan, a multi-trillion-dollar welfare and climate change spending bill. They’re heralding it as a major accomplishment that will uplift struggling Americans and revitalize the economy. So, let’s review all the reasons it’s an utterly terrible piece of legislation.
First, the cost is astronomical. The Biden administration and its allies in Congress have repeatedly made false claims about its price tag. They’ve time and time again parroted the claim that the legislation “costs zero” because it supposedly does not add to the national debt and is “paid for” with new tax increases. (It actually does add to the debt, but that’s not the point). Yet this is an absurd argument.
While it may be more fiscally responsible to pair spending increases with tax hikes, it doesn’t make them cost less. That’s like saying that buying groceries with cash instead of a credit card means the price tag is zero—it’s nonsensical. Every dollar the government spends has to come from somewhere. Whether it’s financed through additional debt or new taxes means that the consequences are different, yes, but there are still costs involved.
The true cost of the legislation, once one accounts for budget gimmicks and dishonest political rhetoric, is up to $4.9 trillion. That’s an astounding $32,000 per federal taxpayer.
And most of this money would go to wasteful government programs and counterproductive expansions of the welfare state.
For example, the bill funnels billions into electric vehicle subsidies that make almost zero difference on carbon emissions and pad the pockets of wealthy consumers. It similarly wastes billions funding a “Civilian Climate Corps” that would pay people to do environmental activism that even proponents admit won’t reduce emissions. It puts hundreds of billions toward subsidies for healthcare, childcare, and housing that will ultimately push the cost of these sectors even higher and prove counterproductive.
So, too, the Build Back Better agenda openly violates President Biden’s promises that he wouldn’t raise taxes on anyone earning less than $400,000. It raises billions in new taxes on nicotine products that millions of working-class Americans regularly consume and hikes corporate taxes that ultimately fall on workers’ shoulders via lower wages. It does all this while, rather hypocritically, giving the rich a net tax cut.
What do we get in exchange for this hodge-podge of wasteful spending and punitive tax hikes? Worse economic outcomes, not the revitalization that President Biden and his allies have promised.
Because the bill confiscates trillions from the private, productive sector and funnels it through the government’s political schemes, it will actually lead to lower wages, lower employment, and lower economic growth over the long-run. That’s the finding of analyses by the Wharton School of Business, the Tax Foundation, and too many other experts to count. (And no, the spending bill won’t reduce inflation as President Biden oddly claims).
In sum, the Build Back Better agenda is a government spending bill that’s uniquely terrible even by the abysmally low standards we expect from Congress. The good news is that it doesn’t look like it’s going anywhere once it gets to the Senate.
Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and PolicyCorrespondent at the Foundation for Economic Education.Reprinted by permission: The Foundation for Economic Education