Cradle to Grave: Senate Dems Unveil $3.5 Trillion in Additional Spending and Expanded Government

Intent on leaving no dollar unspent, Senate Democrats released the framework for a $3.5 trillion spending bill. It covers most of the liberal items favored by President Biden and Sen. Bernie Sanders.

Summary

Senate Democrats unveiled a $3.5 trillion spending plan that picks up all the leftovers left out of the bipartisan infrastructure bill negotiated over the last few weeks, and are expecting to pass it through “budget-reconciliation” which only requires a simple majority in the Senate

• These items include additional spending on Medicare, education, and climate change, with Sen. Chuck Schumer saying it covers all of President Biden’s priorities on “human infrastructure.” 
• The bill tentatively has the support of Vermont Sen. Bernie Sanders, who had previously withheld support for anything that did not meet his threshold for what he considered “transformative.” 
• Tucked into the proposal is an “immigration overhaul” that would create a citizenship process for millions of people residing in the United States illegally. 
• Obamacare subsidies would be increased while taxes would be raised on individuals making more than $400,000 a year and corporations if the proposal became law.

• CNN’s focus was on West Virginia Sen. Joe Manchin, who expressed deep skepticism with some of the climate-centered portions of the proposal. 
• The New York Times noted that Democrats still have to solidify support and parts of proposal won’t be as far-reaching as they want given the budget-reconciliation process will require temporary measures. 
• The Washington Post’s editorial board gushed over the proposal, saying it has the potential to “cut the child poverty rate” in half, while urging Democrats to tax more people to pay for the additional spending.

• RedState bashed the Republican senators who negotiated on an infrastructure-focused spending bill, arguing all it did was give Senate Democrats the opening to ram through a far more liberal spending bill via budget reconciliation. 
• Townhall noted South Carolina Sen. Lindsey Graham’s colorful response to the news of the proposal, calling it a “tax and spend plan from Hell” that expands the role of government “from cradle to grave.”
• Coverage by Breitbart highlighted the White House’s apparent acknowledgement that they don’t have the votes for passage yet, saying “moderates” in the Senate, like Joe Machin are the least of their worries: “far-left and more temperate” moderates in the House are scuffling over the proposal.

Author’s Take

The unfortunate reality is more spending does not equal better outcomes. Chart 2 from an analysis of President Lyndon Johnson’s War on Poverty shows how the poverty rate has huddled around 12-15% for the better part of 50 years despite increased spending over that time. The most generous take would be that at some point, there are diminishing returns. The least generous view would be it did absolutely nothing. Take your pick.

Neither did Obamacare properly lower out of pocket costs for Americans.

This chart from AEI shows the inflation of costs among various sectors and goods in our economy. Note those with the largest government “investments” are rising at alarming rates. So, no, increased investments do not always produce the best outcomes.

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© Dallas Gerber, 2021