No Reconciliation Bill Could Be ‘Too Small’

By Charles C. W. Cooke

Tuesday, October 05, 2021

 

Representative Pramila Jayapal (D., Wash.) has announced that she is opposed to reducing the size of the Democrats’ ever-protean reconciliation bill to around $1.5 trillion on the grounds that the amended number is “too small.” In response, I would respectfully suggest that Representative Jayapal should get her head checked.

 

There is nothing “small” about a $1.5 trillion spending binge. It is, from any perspective, a colossal sum of money, and the fact that Representative Jayapal initially wanted to spend an even more colossal sum of money does not change this. Yes, Alexandria Ocasio-Cortez originally wanted a staggering $10 trillion in spending. But that does not render the $3.5 trillion at which she eventually arrived a “moderate” number any more than the progressive caucus’s insistence upon that $3.5 trillion plan turns the $1.9-to-$2.2 trillion that Senator Joe Manchin (D., W.Va.) is now offering into a “reasonable” accommodation. When lunatics compromise with one another, the result can indeed be described as a “compromise.” But that doesn’t make it sane. And what the Democratic Party is proposing to do is insane no matter how you slice it.

 

Because his number is the lowest of the bunch — and because he keeps making some superficially responsible noises — Senator Manchin has been cast in the press as the Ebenezer Scrooge of this piece. But, if the latest reports are to be believed, even he is off his rocker. In his statement last week, Manchin lamented “the brutal fiscal reality our nation faces”; noted that the United States has spent an additional “$5.4 trillion since last March” (more money than the federal government would otherwise spend in a year); said that he is worried that we have reached the point at which “we can’t even pay for the essential programs, like Social Security and Medicare”; and warned that “America is a great nation but great nations throughout history have been weakened by careless spending and bad policies.” Now, as if suffering from amnesia, he says that would be happy to spend another $1.9 to $2.2 trillion over ten years — which, for those keeping score, would represent a spending binge twice as big as Obamacare.

 

When pressed, Manchin likes to describe the spree he has in mind as “targeted” and “paid for.” But even if this were true — even if every dollar spent were matched to a dollar raised by taxation — it would still miss the point. The United States is $28.8 trillion in debt, and, with every year that goes by, its situation gets worse. This year’s budget deficit is forecast to be more than $3 trillion, and the projected deficit for every year after that is $1.1 trillion. If Manchin were serious about his desire to “pay for the essential programs, like Social Security and Medicare” and to limit our spending to “what we need and can afford,” he would either be seeking to kill the reconciliation bill entirely or insisting that his fellow Democrats limit their ambitions to an increase in taxation, with the proceeds to be used to reduce our endless budget deficits. Instead, he’s playing along with the progressives’ ruse.

 

Manchin’s plan makes even less sense in light of his other grave concern, which is inflation. “Suggesting that spending trillions more will not have an impact on inflation,” Manchin wrote last week, “ignores the everyday reality that America’s families continue to pay an unavoidable inflation tax.” This is true, of course. But it is only half of the problem. The other half is what happens if, in an attempt to fight the very inflation that Manchin fears, the Federal Reserve is obliged to jack up interest rates, with the knock-on effect of making our existing federal debt payments a lot less manageable than they currently are. I have no doubt that Joe Manchin is sincere in his desire to keep the reconciliation bill debt-neutral. But he must surely understand that if the federal government raises taxes by $2 trillion now, it will make it much harder to raise $2 trillion in the future should we genuinely need to. Were Manchin insisting that such an increase go toward repaying the debt, he would have a case. But he’s not. Indeed, his plan is to spend every last cent.

 

One must ask why. Writing a month ago in the Wall Street Journal, Manchin rejected the idea of spending vast sums of money “with no regard to rising inflation, crippling debt or the inevitability of future crises” by asking, “What do we do if the pandemic gets worse under the next viral mutation? What do we do if there is a financial crisis like the one that led to the Great Recession? What if we face a terrorist attack or major international conflict? How will America respond to such crises if we needlessly spend trillions of dollars today?” These are excellent questions. And if, by the time these “crises” come along, the only thing the U.S. has done to change its situation is diminish its wiggle room on taxes, Joe Manchin is going to look extremely silly.

 

Last week, Manchin insisted that, “At some point, all of us, regardless of party, must ask the simple question — how much is enough?” That “some point” is clearly now, and yet, despite having cast himself as the last champion of parsimony, Manchin keeps revising his own answer upward, to the point at which it is becoming indistinguishable from those that have been offered by the colleagues he considers to be rash.

 

“Too small”? We should be so lucky.