We learned yesterday from the CBO that Joe Biden’s “Build Back Better” spending boondoggle would actually add three trillion dollars more debt to the country than had been advertised, once all of the budget gimmicks and sleight-of-hand language was stripped out of it. That news came on the heels of a report that inflation had hit a level not seen in almost forty years. (I lived through that inflation explosion and I can assure you that it was no fun.) These events have forced even some of Joe Biden’s most ardent cheerleaders in the media to take notice. Last night the Associated Press was compelled to ask what really should have been an obvious question all along. Is this really the time to be setting another $5 trillion in magical money on fire? And will King Joseph of West Virginia really go along with this plan?
A report showing inflation rising at its fastest rate in nearly four decades raised fresh questions Friday about the fate of President Joe Biden’s social and environment legislation, with both sides hoping it would influence whether pivotal Sen. Joe Manchin will back the proposal.
The moderate Manchin, D-W.Va., has spent months forcing Democrats to trim the 10-year, $2 trillion package’s size, citing rising inflation as a reason to slow work on the bill. On Friday, the government said consumer prices grew last month at an annual rate of 6.8%, the highest in 39 years.
Manchin aides did not immediately respond to requests for comment from the lawmaker. On Thursday, he said in a brief interview that he was “very concerned” about the inflation report.
This is one of the oldest rules in economics and you’d have thought that we might have learned our lesson by now. When you dump huge amounts of imaginary money into the system with no ability to make up for it, the total amount of cash in the system increases. When the amount of money goes up without a corresponding increase in available goods and services, the value of the money decreases, and prices rise. Doing this at a time when we’re facing a supply chain crisis (that the administration has yet to address) making even fewer goods available creates a perfect storm of higher prices and supply shortages.
Amazingly, some Senate Democrats seized on the news to argue that it only underscores the need to pass the BBB fiasco. The “logic” being presented (such as it is) claims that the bill would drive more consumer spending in areas including education, health care, and family programs. This nonsensical argument flies in the face of reality. Spending on education is a relatively fixed number unless you count services suddenly becoming more expensive as “more spending.” The same applies to health care. You might argue that more people going back to work will drive up spending on childcare and give a boost to those who work in that field, but it’s a minor adjustment at best.
It’s true that wages have risen in response to the ongoing labor shortage amid the “great resignation,” but those modest gains have already been wiped out by price increases. As Mitch McConnell put it yesterday, Americans have actually received a net pay cut, not an increase, when you factor in the cost of living. Dumping another five trillion dollars onto this bonfire is going to exacerbate this problem rather than alleviating it. It’s almost as if Jimmy Carter has suddenly been returned to office.
So what will Joe Manchin and Kyrsten Sinema do? Chuck Schumer continues to insist that he wants to pass BBB before Christmas. Sinema has been largely silent on the question for the past week or so and when she has commented she’s sounded rather vague. Manchin has repeatedly said that he’s “concerned” about the overall price of the package as well as the inflation rate. But he’s held Schumer’s feet to the fire so many times at this point and gotten so many concessions from the original bill that it’s hard to believe he would just walk away entirely. That’s not to say that he couldn’t do it because he’s pretty much fireproof at the moment. But if he does, he’ll be getting a pretty cold reception when they return from the Christmas break.
Can anyone honestly imagine the Democrats spending all of this time working on Biden’s signature mega-spending bill and then letting the entire thing die on the vine? I can’t. They may be forced to gut even more items out of it to get to fifty votes, but they’re going to have to pass something at some point or be left looking like complete, abject failures. Let’s just cross our fingers and hope that the country is able to survive their “success.”