The Democrats Go Wild on Spending and the National Debt—Again

Joe Biden Debt

The Democrats Go Wild on Spending and the National Debt—Again

Such reckless spending harms the U.S. economy and detracts from claims of political centrism.

You have to hand it to the Democrats, they’re consistent. At the beginning of every new administration, they miss the opportunity to demonstrate any degree of fiscal restraint or sanity that might mark them as a governing party.

In 1993, despite running as a New Democrat against “tax and spend” profligacy, newly inaugurated Bill Clinton rammed the largest tax hike in U.S. history through Congress, raising the top income tax rate to 39.6 percent (it was 28 percent when Ronald Reagan left office in 1989, and is 37 percent today). The vote margin in the Democrat-controlled Congress was 219-213 in the House and 50-49 in the Senate.

Democrats justified the law and associated spending with a recession that actually ended in March 1991—nearly two years before Clinton took office.

In 2009, despite promising that he would not increase taxes on Americans making less than $250,000, newly inaugurated Barack Obama enacted a massive $831 billion stimulus bill termed the “Porkulus Bill” by his opponents, followed the next year by Obamacare, which raised taxes on even the poor. The bills passed with no Republican support in the House and virtually none in the Senate. This was on the heels of an admonition from Rahm Emanuel, who would be Obama’s chief of staff, that, “You never want a serious crisis to go to waste.”

Democrats used the bad economy to justify the pork bill, but the financial crisis was over long before it became law: for better or worse, outgoing President George W. Bush had decided to bail out most Wall Street firms, stabilizing markets.

But the tax burden created by the Democrats and the threat of ever-escalating regulations and healthcare costs caused nearly a decade of economic stagnation. Combined with long-term unemployment payments that encouraged some people not to return to work, Obama entered and left office with a record number of Americans not in the labor force.

Now it is Joe Biden’s turn. Even though the economy grew at 4.1 percent in the last quarter and is expected to exceed that figure in the current quarter, and even though the federal government already spent $4 trillion in stimulus related to the coronavirus pandemic, the Democrats are determined to spend another $1.9 trillion.

That amount could provide every adult in America nearly $10,000, which would at least be a nice consolation for running debt to a portion of GDP not seen since World War II, and which would set America up for an eventual fiscal crisis unless interest rates stay low until the end of time. But the handouts total only $1,400 per person for a relatively small subset of the population.

Where is the rest going? Mostly to Democrat constituencies and pet causes. The law, which passed Congress with no Republican support, pays elevated jobless benefits until September, guaranteeing unemployment will remain high enough to justify more stimulus in the federal budget for next year, which coincidentally should be completed in September (also expect a tax hike). The rest goes to a buffet of progressive priorities like trying to save what is left of Obamacare, giving tax credits in excess of what some people pay in taxes (i.e., welfare), and a whopping $360 billion for state and local government, with the lion’s share going to blue states whose governments made bad decisions.

Mind you this is all happening as the pandemic appears to end, with new cases and mortality dropping rapidly to rates not seen since last fall—either the result of often-dismissed herd immunity or a group of vaccines developed in a Trump administration-directed partnership between the government and vaccine makers that was without precedent in human history.

When combined with other radical, progressive impulses like the Green New Deal, which effectively began when Biden killed the Keystone XL pipeline, and the looming “H.R. 1” bill, which would permanently end reliable national elections, the Democrats have missed another opportunity to prove they can govern with sanity. Paying people not to work, raising energy costs, and the prospect of higher taxes could also bring back Obama-Biden prolonged economic stagnation.

It didn’t have to be this way. Unlike virtually every Democrat in modern history, Biden did not flip the White House without also ushering in overwhelming Democrat majorities in Congress. His margin in the House is razor-thin and the Senate is evenly divided. That could have been Biden’s excuse to cooperate with Republicans and govern from the center—possibly avoiding the usual fate of new presidents from whom which voters trim their sails in big midterm losses in Congress.

While it is possible for Republicans to snatch defeat from the jaws of victory, a weak president fronting a radical agenda is not a recipe for the Democrats to keep power.

Christian Whiton is a former senior advisor in the Trump and George W. Bush administrations. He is a senior fellow at the Center for the National Interest.

Image: Reuters.