Conservatives have fought for decades to reduce government spending and currently are in a major battle against President Joe Biden and Congress. The proposed $5 trillion reconciliation package is causing yet another major conflict, conservatives argue, saying if passed, the measure would fundamentally change the country forever.
On Oct. 4, economist Stephen Moore, co-founder of the Committee to Unleash Prosperity and an economic contributor to FreedomWorks, joined Texas Public Policy Foundation CEO Kevin Roberts and E.J. Antoni, a TPPF economist, to discuss the proposed budget reconciliation package.
Roberts introduced the topic by saying the United States is on the brink of financial disaster.
“This isn’t merely about money,” he said. “It’s also about the American way of life. In other words, it is not merely a bad idea from the standpoint of finances that Congress take this action. It’s also a bad idea because of what that money would be used for, in short, to transform America into more of a socialist disaster than it has become in the first several months of the Biden-Harris regime.”
Moore said conservative groups have coalesced on this issue.
“I think whether it’s a pro-life group or a Second Amendment group or an economic conservative group or a libertarian group, you know, whatever, right to work group, they’re all unified,” he said. “I’ve never seen it so unified in my 35 years of doing this business that in opposing this horrific bill. All or nothing else even comes close to my lifetime know working on these issues, dating back to when I worked for Ronald Reagan in the 1980s.”
Moore said if the Biden package is approved, massive debt will harm the country, and sweep away hard-won victories over the past four decades. It will negatively impact families who were helped by policies passed under both Republican and Democratic presidents and Congresses.
“This raises the tax rate on our small businesses to virtually the highest tax rate in the world, higher than Sweden, France, Spain, Italy, the Asian countries and so on,” Moore said. “I work with Larry Kudlow and Donald Trump to put together our tax bill we got passed in 2017 that lowered our business taxes. We have more jobs. We have massive amounts of capital flowing into this country. As we made America more competitive as Trump would say, ‘We put America first.’”
Moore said the U.S. will have higher taxes than China if the reconciliation package is approved.
“That’s absurd,” he said. “We’re fighting every day to stop this. We really depend on groups like TPPF, and your involvement has been invaluable.”
Rep. Chip Roy, (R-Texas) who represents the 21st Congressional District, said it is “absolutely absurd” for any Republican to support the infrastructure bill. He also denounced the idea of granting Secretary of Transportation Pete Buttigieg so much authority.
Roy also was critical of Senate Republican Leader Mitch McConnell for agreeing to an extension on the debt ceiling until December.
Moore said he appreciates that two Democratic senators, Kyrsten Sinema of Arizona and Joe Manchin of West Virginia, have said they cannot support the bill in its current form.
“Last week the Democrats tried to force the Republicans to vote for an enormous debt ceiling increase, and the Republicans, quite frankly, led by people like [Texas’] great Sen. Ted Cruz, led the opposition to that,” he said. “So the current state of affairs, the Democrats right now are at a circular firing squad. They’re shooting at each other for the first time in a long time. So we’ve got a lot of work to do, but we’re making some progress.”
Antoni said progressives have $100 million to spend on this package.
“Where did they get that money? Oh yeah, from taxpayers, from previous bills,” he said. “So we’re outgunned a little bit here because they’ve got all the extra money, but I think we’re still going to win.”
Antoni said the debt ceiling is the maximum amount the country can borrow. It is a flexible limit, however, since Congress has routinely raised it.
“Occasionally, though, just like when Congress would sometimes attach some strings and say, you need to cut back your spending,” he said. “That would be the equivalent of the bank saying, ‘OK, we’ll raise your credit limit, but you have to show us some kind of financial discipline that you are getting your house back on to a good financial track and that eventually you’re going to get to the point where you’re not going further into debt and you’re actually balancing your household budget and you’re eventually going to pay down this debt.’
“Right now we’re hitting that debt limit. It was we actually hit it several weeks ago,” Antoni said. “And Congress, essentially, we are torn between one side of the aisle that wants to just raise the limit again so we can continue borrowing and continue spending. And the other side of the aisle that is saying, ‘No, we are not going to help you raise the debt ceiling. If you want to do this, you have the votes to do it, do it on your own.'”
He said the infrastructure bill is broadly defined. In total, the package calls for spending $6.2 trillion in new dollars over a period of years.
“It’s an insanely large amount of money that would probably be the understatement of the day so far, right? And we simply don’t have the money to pay for this,” Antoni said. “We’re going to add about $4.5 trillion to the debt. And the Federal Reserve, unfortunately, it looks like they’re going to continue what we would call an accommodative monetary policy, which is just a very fancy way of saying they’re going to cause inflation to pay for this because inflation is a tax.”
He said the country is seeing the impact, with the highest inflation rates in about three decades.
Moore advised people not to expect a swift resolution to this. Speaker Nancy Pelosi (D-Calif.) said it might not be completed until Halloween.
Antoni foresees two or three months of debate.
“You asked me where the Democrats are right now,” he said. “They are in a circular firing squad. They’re all shooting at each other,” he said. “The Wall Street Journal said it very well on their weekend editorial, basically saying Joe Biden is not running this country right now. It’s Bernie Sanders. So let’s be very clear about this.”
Moore said this is not how Biden campaigned.
“This is not popular with the American people. Nobody voted for this,” he said. “America didn’t rush to the polls in November, saying, ‘Oh, I’m going to vote for Joe Biden because he’s going to increase the debt by $10 trillion.’ In fact, Joe Biden made it very clear over and over and over again during the campaign is, ‘You’re not electing Bernie Sanders, you’re electing me the moderate, you know, lunch bucket, Joe. We, you know, in our deepest fears.’ I didn’t think that Biden would lurch this far to the left.”
Much of the current debt was triggered by former President Donald Trump’s massive tax cuts that became law in 2018.
There are other concerns, with a provision in one of these bills about the IRS monitoring bank accounts, in particular transactions above $600.
“It’s scary in a word, the only other word that comes to mind is Orwellian, when you consider the fact that the vast majority and I mean, we’re talking about 99% of people who get a biweekly paycheck are going to get flagged by this,” Antoni said. “It essentially gives the IRS the ability to look at everyone’s bank account. Everyone. So do we really want that kind of weaponization of another three-letter government agency?”
Antoni was asked what policies should be enacted once conservatives are back in power to put the U.S. back on track for prosperity.
“I think the only way to do it is indirectly,” he said. “What I mean is, unfortunately, the Federal Reserve, has become an institution that finances massive government spending and income redistribution in this country. If I had the magic wand, as you said, I would replace the chairman of the Federal Reserve and most of its members with people who will turn inflation not down to 2% — down to zero. No inflation at all.”
Roberts urged people to join the fight.
“I’ve said for years as a lifelong educator that at the heart of every policy conflict is education, and in this case … really poor education,” he said. “This is something to be very skeptical of, and I would even argue, and I rarely say this, to be fearful of. Go talk to your neighbors. Call that apolitical friend. Call that family member who’s just been disaffected by politics and tell them this is something that transcends parties. This is something that transcends ideology. What is at stake is the United States of America itself. And it’s high time we all take a part in fixing it.”
