A billion here and a billion there, as the old saying went, would eventually add up to real money. Not so much anymore. We seem to have become accustomed to multi-trillion-dollar heights in spending that double every few years.
After signing H.R. 2471, the “Consolidated Appropriations Act” spending package for fiscal year 2022 — enacted five months into said fiscal year — Biden’s $5.79 trillion 2023 fiscal budget proposal has finally made its appearance, and is proclaimed by the administration to be fiscally responsible.
The Budget hails “safety and security at home and around the world, and the investments needed to continue our equitable growth and build a better America.” Defense and domestic spending are increased, with the latter containing Biden’s signature “Build Back Better” elements that were rechristened the “Unity Agenda” during the State of the Union Address.
Most of the pre-release media buzz gleaned from “anonymous” sources and “people with knowledge” was over the “Billionaire Minimum Income Tax” to ensnare the wealthiest by taxing them even on unsold assets; it appears on page 35.
The Office of Management and Budget and the Council of Economic Advisers determined some months back that 400 billionaire families pay only eight percent in income tax. Biden has long called for them to pay their “fair share,” which apparently is 20 percent of income whether realized or not, on the theory that federal agencies would do better things with all that money.
Maybe the billionaires agree, since a plurality claimed to support Biden in 2020, and Clinton in 2016; and plenty work closely with Biden. So if you’re rich but not a billionaire, fear not. You, too, can still particpate in supporting the Unity Agenda, since the 20 percent take would reach down to those worth $100 million.
In any event, Biden’s Billionaire Minimum Tax proposal would constitue more whole-of-society transformation toward the progressives’ wealth tax, all to raise $360 billion over 10 years. That won’t make much of a dent in the debt, though; it’s now $30.3 trillion and heading north to at least $39.5 trillion in 2032, according to p. 119.
Rounding out the picture, Biden’s budget anticipates $4.64 trillion in revenues, and thus a deficit of $1.1 trillion. That’s down from the $1.4 trillion deficit estimated for 2022 and $2.8 trillion 2020 deficit. We’re expected to be tickled with “cutting in half the deficit from the last year of the previous Administration and delivering the largest one-year reduction in the deficit in U.S. history.”
Color some of us unimpressed, since post-2023 the deficit is projected to never decrease but instead creep ever upward to land at $1.8 trillion in 2032. Taxing billionaires doesn’t cover it.
Some of Biden’s “Unity Agenda” social progams that feel a lot like the stalled “Build Back Better initiative perhaps may be resurrected with the help of Sen. Joe Manchin (D-WV). These helicopter government programs covering everything from health care to child care are intended to expand the custodial administrative state and to “help families pay for … essentials.” Domestic spending hikes also target the “climate crisis” (mentioned 33 times in the budget proposal) and boosts for the likes of the Interior Department and the Environmental Protection Agency.)
Federal spending has always entailed the erection of new regulatory edifices, economic intervention, displacement of private activity and behavior-altering transfers. But these unexamined effects and artifacts have grown more ominous given mass interventions like the spending surge on COVID (the “American Rescue Plan” a year ago) and one coming on the Bipartisan Infrastructure Law occurring in rapid succession. On tap even before Biden’s 2023 proposal has been a slate of technology, defense, procurement/”Buy American” and social-engineering schemes.
Further as the Ukraine crisis unfolds, we find the door opening to counterproductive energy interventions rooted in scapegoating producers. We do not see these in the budget proposal, but compulsory use-or-lose policies on existing energy permits as well as windfall profits taxes with “rebates” to consumers are being floated and are a threat. “Oil companies are raking in record profits, while Americans are facing price hikes at the pump,” according to the interpretation from Sen. Ed Markey (D-Mass).
For some context on how things are escalating, it took from the founding era to the later half of the 1980s, during the Reagan presidency, for the United States to reach a nominal $1 trillion budget. Things accelerated quickly, with the first $2 trillion and $3 trillion budgets both appearing courtesy of George W. Bush. The last budget surplus occurred under Clinton in 2001.
The first $4 trillion budget happened during the financial crisis, and the first $6 trillion duing the pandemic. Yes, there is a pattern of sorts here, and abuse-of-crisis must be addressed. While Biden’s budget is less than the Trump/Covid heights, spending is never dropping to pre-pandemic levels, but rather promising to march in coming years past $7 trillion, even beyond $8 trillion, with the pandemic long in the rearview mirror by then. The pandemic recedes, the spending it induced does not.
As holder of the purse strings, Congress pushes its own priorities, making presidential budgets DOA as written. Today, though, the Biden exercise highlights more similarities than differences with Republicans, who support all the defense increases despite the U.S. having ostensibly exited “forever wars” less than a year ago. And the GOP simply cannot get enough “bipartisan” infrastructure and science and technology “innovation” pork and regulatory spending. These replace free enterprise with cronyism and permanent government partnerships; and of course permanent regulatory agencies.
Once upon a time, outsize spending infuriated grassroots, but not after Trump reportedly said “who the hell cares” about the budget even before the pandemic hit. Republicans also went along on the December 2021 debt limit increase rather than forcing retrenchment, despite the debt limit’s status as perhaps the last remaining institution capable of forcing a reduction in the size and scope of the federal budget. The rare “sequestrations” that occur are the only spending cuts of recent historical note, and they also get lifted; in bipartisan fashion, naturally.
The failure of the GOP to halt the rise of the progresssive left has paved the way for Biden’s “whole-of-government” approaches on “equity,” the “climate crisis” and on “competition policy.” These are reflected in the budget and in everything Biden’s administration is doing, and they rule out not just balanced budgets but limited government itself. What had once been non-starters under Obama such as tax-and-spend green mass transit boondoggles and free community college or other educational aid like loan deferrals are part of the universe’s background radiation now.
Read the full article at Forbes.