Last year was supposed to be the year of huge federal spending. With the pandemic and lockdowns disrupting much of the economy, we had to make up the difference with borrowed money. We chewed through $6.5 trillion, about $20,000 for every person in the country. The previous year we’d spent “only” $4.4 trillion, or $13,000 per person.
In the final week of the year, then-president Trump signed one last bill to spend yet another $2.3 trillion. Shortly thereafter, the Congressional Budget Office predicted that, with this spending in place, 2021 would give us our second-highest deficit in history as a percentage of our GDP — beaten only by last year — and that we’d burn $5.7 trillion before things settled back down in 2022 and 2023.
We could afford to go big in an emergency because we are a very rich country. But even before the pandemic we faced a crisis of exploding entitlement spending and debt. And rather than get spending back down and prepare for the future, Biden has spent his first 100 days dreaming up ways to blow more money. Some of his ideas are financed with debt, others by hiking taxes to fund new projects rather than to fix existing problems.
Just weeks after Trump signed that $2.3 trillion COVID-relief bill, Biden took office and set about putting together another one. Most of the resulting bill was wasteful, counterproductive, overly intrusive, or unrelated to the pandemic. Congress passed it anyway on a party-line vote, and it’s now the law.
State and local governments got more federal money than they lost in tax receipts, and for good measure, they were told that taking the money would limit their ability to cut their own tax rates. (There are lawsuits over that provision now pending.) Well into the recovery, unemployment benefits are still being paid out at a boosted level — high enough that many workers make more money if they don’t work. Restaurants are reporting a hiring crunch, and the expanded benefits won’t expire until September, so they should get used to it. Most Americans got checks worth $1,400, even if the pandemic hadn’t cost them any income. The bill further included a “child allowance” worth $3,000 to $3,600 per child, to be paid out to parents, including those who don’t work, in regular installments once the federal government figures out the mechanics.
Price tag: approximately $2 trillion.
After signing that 13-figure spending bill, Biden decided the best thing to do would be to put together yet another one. Thus Congress is now haggling over another round of “infrastructure week,” with moderate Republicans saying they could blow some money on Biden’s plans but not as much as he’s asked for.
Much like the COVID bill, Biden’s infrastructure plan is a huge grab-bag of ideas, most of which are either unnecessary or unrelated to the concept that allegedly ties the bill together. Despite the constant refrain that our infrastructure is “crumbling,” most of it is actually fine, and the genuine problems tend to be best addressed below the federal level. (Those shockingly low grades you always read about come from a civil-engineering trade group with an obvious stake in the question of how many civil-engineering projects we need to pay for.) And about half of the bill — money for care workers, domestic manufacturing, federal buildings, and more — doesn’t even qualify as infrastructure.
Unlike the COVID bill, whose price tag is being put on the national tab, this one would be funded by tax hikes on businesses that will ultimately land on those businesses’ owners, workers, and customers. These taxes will soak the rich, but they’ll hit the rest of us too, including the folks making below $400,000 whom Biden promised to shield. And of course it makes little sense to hike taxes to fund new spending when the old spending isn’t being paid for.
Price tag: more than $2 trillion in spending and tax credits.
Next came Biden’s plan for 2022 discretionary spending, which froze the defense budget roughly in place but hiked other spending by 16 percent.
Price tag: $1.5 trillion, though only a fraction of that is new spending.
And this week Biden released his American Families Plan, which does not merely help families in general but targets subsidies at families in which both parents work — using taxpayer dollars to discourage stay-at-home parenting. The aforementioned child allowance is continued through 2025, but there are also big subsidies for child care, parental leave, and pre-K. Free tuition for community college is in the mix as well, because why not? Like the infrastructure plan, the family plan is paid for with new taxes, this time on high-earning individuals rather than businesses.
Price tag: nearly $2 trillion.
All told, in 100 days, Biden has proposed about $6 trillion in new spending. It’s as if, every single day, he went around asking for $180 from every man, woman, and child in America. Pretty soon you’re talking about real money — $18,000 per person, to be exact.
Only $2 trillion of that has become law so far. Let’s keep it that way.