Money and the Economy

The Senate Just Approved a Spending Plan 5x the Size of FDR’s New Deal

From trillions in COVID-19 spending to a $1+ trillion “infrastructure” bill, the federal government has spent so much taxpayer money over the last year-and-a-half that it beggars belief. You’d think the folks in Washington, DC would have run out of ways to waste our money by now. (How can anyone be this creative?)

But Senate Democrats aren’t backing down from the challenge. They just approved a stunning plan that, if fully passed, will confiscate and redistribute an astounding $3.5 trillion of our money in one of the greatest expansions of government control of the economy in American history.

“Senate Democrats took their first step toward passing a $3.5 trillion spending plan early Wednesday as the party forges ahead with a massive economic agenda,” CNBC reports. “After more than 14 hours of votes on amendments, the Democratic-held chamber voted to pass a budget resolution 50-49 along party lines. The measure directs committees to craft a bill that would spend up to $3.5 trillion on climate initiatives, paid leave, child care, education and health care.”

Republicans uniformly opposed the measure.

“The Democratic budget will bring a generational transformation to how our economy works for average Americans,” Senate Majority Leader Chuck Schumer, a New York Democrat, said after the resolution’s passage.

The breadth and scope of the spending resolution is genuinely breathtaking. Here’s just some of what’s in the proposal, as summarized by CNBC:

  • Expansions of paid family and medical leave
  • A buildup of child-care programs
  • Extensions of household tax credits, including the enhanced child tax credit implemented during the pandemic
  • An expansion of Medicare benefits to include dental, vision and hearing, and a reduction in the Medicare eligibility age
  • An extension of increased Affordable Care Act subsidies
  • Universal pre-K
  • Tuition-free community college
  • Tax incentives and grants to encourage adoption of green energy, manufacturing and transportation
  • Polluter fees on methane and carbon
  • Consumer rebates to encourage clean energy and weatherization in homes
  • Funding to increase the number of electric vehicles in the federal fleet

From making community college “free” to pushing more Americans onto the government’s healthcare rolls, these expansions of the government would have too many harmful consequences to list, and would further trap millions more into welfare-state dependency.

But simply focusing on the public finance aspect of the plan, this level of government expenditure is truly astronomical. To put it into context, $3.5 trillion is $24,424 per federal taxpayer. It’s roughly 5 times larger than President Franklin Delano Roosevelt’s “New Deal” after adjusting for inflation.

This proposal for record-breaking expenditures comes as the federal government is already drowning in $227,000 of debt per federal taxpayer. It would further burden future generations with trillion-dollar annual interest payments that must be funded with new taxes, slower economic growth, lower incomes, and decreased private sector investment, innovation, and opportunity. While much of the spending would be piled onto the debt, the proposal also includes tax increases on individuals and businesses (aka workers).

What’s more, the proposal comes at a time when the economy is rapidly rebounding, not struggling, and we are already experiencing alarming levels of price inflation that are eating away Americans’ paychecks and purchasing power.

Simply put, this unprecedented blowout would bankrupt America. And it would do so in pursuit of expansions of government power and control that are almost uniformly bad ideas in their own right. Senate Democrats may love the idea of controlling trillions more of our dollars to dole out to their allied interests and politically-favored industries. But taxpayers should not stand for it.

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This article was originally published on FEE.org

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