The $2 trillion number is a made-up figure that was meant to rally support for the U.S. tax reform plan, yet it’s not even close to being true and has been mostly debunked by economists since its release.
The “wsj $3.5 trillion” is a fake number that has been made up by the author of the article. The number is not legitimate and does not exist in any form.
On Oct. 19, Rep. Pramila Jayapal, the head of the Congressional Progressive Caucus, speaks with media outside the White House’s West Wing.
Susan Walsh/Associated Press photo
Democrats claim they’re working hard to reduce their $3.5 trillion tax and spending measure to $2 trillion in order to appease House and Senate Republicans, but don’t trust them. They’re actually trying to cram $4 trillion worth of new programs into a $2 trillion package that seems less radical than it is.
According to press sources, the White House gave Congressional Democrats a proposal on Tuesday that kept virtually all of the entitlement programs they had suggested. Democrats are expanding their use of fiscal tricks to try to fit this massive growth of the welfare state inside a 10-year budget frame, rather than eliminating it. It’s still a huge financial confidence ruse.
The information is coming out in bits and pieces, and the conversations are still ongoing. But, so far, it seems that the White House is continuing to cater to progressive demands before browbeating swing-district members into compliance. Rep. Ro Khanna (D., Calif.), a progressive leader, was reported as stating, “Overall, practically every agenda is addressed.” President Biden and House Minority Leader Nancy Pelosi have already said that they want to fully finance fewer programs. But, as is customary, they withdrew as pressure mounted.
Only two items from the Democrats’ initial proposal seem to have been dropped: a community college scholarship and a countrywide renewable fuel requirement known as the Clean Electricity Performance Program (CEPP). With a cost of $120 billion over ten years, community college is one of the more affordable options, and several governments currently fund it.
CEPP’s demise is noteworthy because it would compel all states, whether they want it or not, to satisfy a renewable fuel benchmark. It’s specifically intended to get rid of coal and boost the cost of natural-gas electricity. It’s really a carbon price cloaked as regulation. If this beast is indeed dead, credit West Virginia Senator Joe Manchin.
That’s all for the good news. The bad news is that Democrats want to keep every other major entitlement program in the red. A fake sunset is the grandest ruse. According to news sources, the $3,000 or $3,600 kid stipend would last just one year, rather than the five years proposed in the House plan. Instead of $556 billion, this will cost $120 billion.
The sunset is a gimmick, since Democrats want to keep renewing the kid allowance indefinitely. It will cost $1 trillion in actual terms during the next ten years, and another trillion in the following decade. This is a significant contribution to the structural deficit—a middle-class entitlement with no work requirement—that will ultimately be paid for by higher taxes.
According to reports, the ObamaCare subsidy increase would last three years, but this is also a ruse. Paid family leave may be reduced to four weeks from twelve, but it will ultimately be increased to 12 weeks or more and extended beyond maternity and paternity leave to include elder care and other services.
Another rumored hoax is that Bernie Sanders’ Medicare extension to include dental care would be implemented as a trial or restricted program. It’s possible that this will save $260 billion. But do you believe that a benefit that is now available to certain seniors will soon be available to all? Any program would elicit a political lobbying effort from dental associations and others in order to make it universal.
Close budget observers aren’t fooled by any of this. Cornerstone Macro’s Andy Laperriere estimates that the proposed White House budget would cost $4 trillion over ten years. The bill’s child allowance and health subsidies alone, according to Maya MacGuineas of the Committee for a Responsible Federal Budget, would cost $3 trillion over ten years.
As the conversations and leaks continue, we recommend paying attention to the programs rather than the top-line budget amount, which is almost certainly a ruse. The increased entitlements that will increase future expenditure and erode the motivation to work, as well as the taxes that will slow economic development, are what matters. The remainder is mostly made up of spin.
Mark Penn, a Democratic pollster, is interviewed by Paul Gigot.
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The print issue of the October 21, 2021, was published.
The “era of nonstop stimulus” is a term that has been used to describe the last few years. The $2 Trillion Is Phony Too!
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