In Washington D.C., the House of Representatives just passed H.R. 5376 – a $2 trillion dollar spending package (also known as the President’s Build Back Better Initiative). The bill now goes to the Senate for its review and revision. We should analyze this bill with intellectual honesty and not by which party proposed it. We do ourselves a disservice when we assess any legislation based on whether it was drafted by the red or blue team. Such partisan assessments are of no use.
The first concern with H.R. 5376 is the fact that it is $2 trillion dollars of new spending that follows three previous spending bills totaling $5.5 trillion dollars. In March 2020, the CARES Act of $2.2 trillion dollars in spending was signed by President Trump – an eye-popping amount – only to be exceeded by $2.3 trillion dollars in additional coronavirus relief in December 2020. Last week, President Biden signed a $1 trillion dollar infrastructure spending package. If H.R. 5376 passes in its current form, then we will have incurred massive debt by injecting $7.5 trillion dollars into an already inflationary economy in less than two years. This unprecedented level of spending will drive demand, not supply, and cause prices to rise at levels we have not seen since the 1970s. Higher prices hurt businesses and consumers as everything becomes more expensive and harder to obtain. Inflation stifles an economy’s ability to function properly.
The second concern with the above spending is the additional debt. This issue is routinely ignored by whichever political party happens to be in power. The fact remains that the growing national debt requires higher payments each year just to service the interest on the debt. This means more and more of the tax revenues generated each year will go to paying the debt instead of paying the regular bills. This always leads to higher taxes in addition to paying more for everything.
The third concern is how to pay for the above. It is disingenuous to argue that a massive spending bill will pay for itself. The U.S. Chamber of Commerce noted that the Build Back Better Act is front-loaded with consumption-oriented spending. That means the spending will occur long before any revenue is realized. Moreover, the revenue to be created (often overstated) will be in the form of taxes on businesses, regulations on disfavored industries, price controls and penalties. That is not a realistic payment plan.
The fourth concern is what is in the bill. H.R. 5376 is 2,468 pages with a 179-page summary and covers thirteen different subjects, including agriculture, labor, financial services, transportation, etc. There is no clarity with such a monstrous bill because so much can be hidden in hundreds of pages. Presumably, some elements of the spending are worthwhile, but certainly not all. Unfortunately, no one will ever know because Congress refuses to vote on each line item in the bill. Had they done so, they would have to justify each section on the merits. Instead, the bill hides the egregious provisions within a morass of an incomprehensible 2,468 pages.
For example, the bill’s section on labor is bad news for businesses as it does nothing to create jobs. Particularly troublesome is Section 21001 that spends $1,938,000,000 over five years to “rebuild the capacity of worker protection agencies in the DOL [Department of Labor].” All this spending is to exponentially grow a federal agency charged with regulating employers during a labor shortage and supple chain crisis. Additionally, the bill gives more power to the DOL to create regulations and carry out enforcements. This means more burdens on employers. Sections 21004 – 21006 gives OSHA more power and increases monetary penalties against employers. This bill allows employers to be fined up to $700,000 – an obscene number on its face as no employer should be at risk for bankruptcy inducing fines. It is no coincidence that the above expansion corresponds to OSHA’s new charge to enforce the employer vaccine mandate.
The above is one example of bad polices contained in a behemoth bill. There are many more, but we’ll never hear of them because Congress refuses to vote on each item therein. The punitive provisions on labor cannot be justified but will likely be overlooked as a necessary burden to achieve the greater good of the bill. Unfortunately, the burden is real and the good is illusionary. Nevertheless, we will inevitably hear that the bill is good for the economy, necessary to end the pandemic, save the environment, rebuild our country, or any other catch phrase you prefer without any substantive explanation. In the end, no one wants to govern, just spend, but spending is not governing!
Sincerely, your Chamber President,
Robert A. Hufnagel.
