After months of gridlock in the Senate, Majority Leader Chuck Schumer (D-N.Y.) announced Democrats have reached an agreement to proceed with a $3.5 trillion -- with a T -- spending package. But their achievement may not deserve the headlines. The Democrats' agreement to spend trillions is not with Republicans, but with themselves. And, as Senator James Lankford (R-Okla.) pointed out on "Washington Watch," "that's actually the Democrats on just the Senate Budget Committee." Senate Budget Committee Chairman Bernie Sanders (I-Vt.) nearly bisected his original $6 trillion proposal to persuade the Committee's Democrats, but he still has not yet convinced Joe Manchin (D-W.Va.) and other moderate Democrats.
Sanders hasn't even written the bill. "There's no legislation yet," National Review columnist Dominic Pino noted. "The only thing the politicians have agreed to do is spend a bunch of your money. We don't know how. We don't know on what projects." So progressive Democrats have the difficult task of "winning people over when none of them have actually seen the details," said Lankford. This level of excess spending may be a tall order. Lankford pointed out this $3.5 trillion spending package is on top of the normal federal budget, which "is usually a little over $4 trillion for the entire year," plus a $600 billion bipartisan infrastructure proposal, plus the $2 trillion Democrats already spent.
"It is so far beyond rational and normal," argued Lankford, but Democrats seem to think "after Covid, no one's going to notice big numbers anymore." Republicans, at least, have noticed, and not one Republican has expressed support for this package. Democrats are calculating that, even if they successfully persuade or pressure their entire party, they will still have to use their last reconciliation bill until 2022 to squeak this bill through the Senate with a bare majority. We might not know exactly what Democrats plan to spend $3.5 trillion on, but we have clues. What might be covered in a bill drafted by Bernie Sanders that has no bipartisan support? Lankford predicted it will include a massive progressive wish list, "a hard left lurch toward socialism."
Such unprecedented government spending will kick the economy in the teeth even as it continues recovering from Covid-related shutdowns. For one thing, injecting additional money into the economy will only add to inflation, which is already climbing. In June, prices rose to 5.4 percent above a year ago. "Prices are going up on housing, on lumber, on used cars, on bacon, on milk, on bread, on everything," Lankford lamented.
Then there's the question of paying for it, either by borrowing money or raising taxes. As Lankford pointed out, "they literally believe that America can't go default because we're the world's currency." But that safety net will eventually reach its limit. The other option is to raise taxes, forcing American citizens and corporations to pick up the tab for the spending spree. Even though Sanders doesn't know how he plans to spend $3.5 trillion, he does want to fund it "by higher taxes on the wealthy and large corporations." We've already seen how that can stifle innovation and entrepreneurship.
Fortunately, while progressives may hold influential positions in the Senate, they don't hold a majority. Regarding the Democrats' massive spending proposals, White House press secretary Jen Psaki admitted yesterday, "If there were enough votes ... it would have happened." The radicals are trying to spend trillions of dollars without any Republican votes whatsoever, but they are struggling to overcome division within the Democratic ranks. The Senate was designed to inhibit just this sort of radicalism. And right now, that's a good thing for the American economy and the American people.