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Brian Darling: Biden 'Build Back Better' plan will kill economic growth



The transformation of America into a European-style socialist nation. Joe Biden has a so-called 'Build Back Better' plan that will greatly expand government and squash the economic growth President Donald J. Trump brought us with his pro-business, low tax policies. The Biden plan should be renamed 'Build Government Bigger' plan.

Republicans in Congress need to stop whining about Biden's plan and fight. They need to develop their own plan to tackle the accelerating growth of the federal government while keeping taxes low.

Democrats have an insatiable appetite for new spending ideas. The Biden plan is being negotiated amongst Democrats now because moderates like Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) like being Senators and recognize the plan as currently written will alienate moderate voters. Left-wing Senators are trying to steamroll moderates by demanding the $3.5 trillion number in new spending.

The left is demanding tax credits (also known as welfare spending using the tax code), taxpayer-funded Pre-K for three and four-year-old children, free tuition for community colleges, and changes in tax policy that will slow private sector growth. They support an expansion of Medicare, 12 weeks of paid family and medical leave, and purchasing electric vehicles by the federal government. Most of the programs in the plan are a redistribution of wealth programs that undermine job-creating free market activity.

Expert economists agree that the Biden plan will massively expand an already too big federal government in a way that will be impossible to reverse. Dan Mitchell and Robert O'Quinn wrote a paper for the Club for Growth Foundation that concluded that the Biden plan would actually cost over $5 trillion. They argue, "this massive spending increase will divert resources from the economy's productive sector, and it will be partly financed by punitive, class-warfare taxes that penalize work, saving, investment, and entrepreneurship." They calculate, using government statistics, that over the next ten years, America will lose $3 trillion of economic output, $1.6 trillion in worker compensation, a drop of more than $10,000 on average for workers, and a lifetime drop in living standards of 4% for younger workers. The fear is that this explosion of spending will lead to higher taxation and a possible European-style Value Added Tax as a way to impose an opaque method of taxation on middle- and low-income Americans that will end up accelerating "America's fiscal decline and undermine economic performance."

The left of Biden's party is pushing to defund the police and the imposition of a woke educational Critical Race Theory to indoctrinate young people into America-hating left-wing politics. Yet, Biden has resisted those ideas to date. What he has not resisted is the urge to spend trillions that he does not have. He has signed onto the Democratic Socialist agenda pushed by Sen. Bernie Sanders (I-VT) and Rep. Alexandria Ocasio-Cortez (D-NY) embodied in this budget plan.

Republicans have a few alternatives. The first would be to dig in and fight on the debt limit. Using that as leverage to push an updated version of Cut, Cap, and Balance that was successful in the 2011 debt limit fight in getting a sequester of spending into law. That plan cut $100 billion in the first year, capped spending at 20% of Gross Domestic Product (GDP) and sending a strong Balanced Budget Amendment to the Constitution to the states for ratification – one that prevents tax hikes from being used to balance the budget. A second idea would be to push Sen. Rand Paul's (R-KY) "Three Penny Plan" that reduces spending three pennies per dollar per year. The common theme with Cut, Cap and Balance, and the Paul plan are ideas that put caps on spending.

Finally, it is time for Republicans to make the case to the American public that the current budget process is broken and needs to be abolished. The original intent of the Budget Act was to be a tool to rein in spending and to reconcile a Congressionally passed budget from final appropriations measures. Reconciliation has morphed into a Trojan Horse for new spending ideas in a way that does the exact opposite of why it is on the books.

Now is the time for Republicans to grow a spine and fight the Biden transformation of America into a European-style socialist nation.

• Brian Darling is the president and founder of the firm Liberty Government Affairs. He was Senior Communications Director and Counsel for Senator Rand Paul and a former senior fellow in government studies at The Heritage Foundation.


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Posted: September 30, 2021 Thursday 08:57 AM