The gang leaders are not happy. Before jetting off to Europe President Joe Biden talked with the Democratic holdouts, most importantly Manchin and Arizona’s Kyrsten Sinema. Manchin also said no to Medicare and Medicaid expansion, de facto Medicare price controls on pharmaceuticals, and a billionaires’ tax. Sinema apparently opposed any tax hike.
The president appeared to remain civil. However, Bernie Sanders, the millionaire socialist with three homes—who once was an elector for the Socialist Workers Party and took his honeymoon in the Soviet Union—was less forgiving. He declared: “The problem is not with the president, the problem is with members here who, although they are very few in number … that think they have a right to determine what the rest of the Congress should be doing. And I strongly disagree.”
This would be shocking if true. However, the media—gullible, culpable, or both—conveniently presented the budget bill as an act of God that only Satan would dare impede, and indicated that blame for the legislative deadlock belongs to just a couple of people, Manchin and Sinema. Yet if the political balance really was 2‑to-98, the spending package would have passed months ago.
The two Democrats matter only because the Senate is split down the middle and all 50 Republicans oppose the bill. So Sanders actually is angry because 52 Senators are deciding what they want to do. Which is what majorities do. The few people who actually “think they have a right to determine what the rest of the Congress should be doing” are the president, the Senate and House Democratic leadership, and members of the honorary Congressional Spendthrift Caucus, like Sanders.
President Biden wanted to go big, essentially loading B‑52s with cash and carpet-bombing the country. Despite his supposedly moderate pedigree, when he spoke to Democratic legislators he emphasized that he desired the full $3.5 trillion and proposed a compromise measure only because he didn’t have the votes. Rep. Peter Welch (D‑Vt.) told the Washington Post that the president indicated “his total commitment” to the full boondoggle bill: “He reiterated that he co-wrote the bill, that it’s in his bones.”
Manchin and Sinema deserve credit for setting some limits on the prospective Democratic spending spree. Still, no one should confuse them with guardians of the Treasury. In March, Biden, with the support of Manchin and Sinema, rushed through a $1.9 trillion Covid relief bill even though the economy was already heading upward. And there is bipartisan agreement, including Manchin and Sinema, on a $1.2 trillion infrastructure bill, which is currently hung up in the fight over the social welfare package. And the latter, originally a left-wing $3.5 trillion funfest, will “only” end up at about $1.5 trillion or perhaps $1.75 trillion, the scaled-back version pushed by the president. All that comes on top of about $6.6 trillion spent last year and more than $6.8 trillion in outlays in 2021.
After the Democrats’ dreary election results President Biden might just want a bill, not necessarily the bill. When he visited Capitol Hill to promote the infrastructure legislation, he told congressional Democrats, “It doesn’t matter whether it’s in six minutes, six days or in six weeks.” Except that the longer the disagreement persists, the weaker the president looks. Barely nine months into his presidency his popularity ratings are under water and he is being called a lame duck. He needs something, anything that counts as a success.
Unfortunately, the president is on the wrong side of the fight. He would keep piling up debt. In July the Congressional Budget Office offered a sobering fiscal check-up, “CBO projects a federal budget deficit of $3.0 trillion in 2021 as the economic disruption caused by the 2020–2021 coronavirus pandemic and the legislation enacted in response continue to boost the deficit (which was large by historical standards even before the pandemic). At 13.4 percent of gross domestic product (GDP), the deficit in 2021 would be the second largest since 1945, exceeded only by the 14.9 percent shortfall recorded last year.”
In the near term, things will get a bit better. But then deteriorating demography mixed with expanding welfare will take control. Concluded CBO, “[d]eficits fall over the next few years as pandemic-related spending wanes. They increase in most years thereafter—boosted by rising interest costs and greater spending for entitlement programs—and reach 5.5 percent of GDP in 2031. (Revenues remain largely stable relative to GDP over the projection period.).”
Over the long term the news is grim. Debt-to-GDP will run about 106 percent in a decade, matching the record set after World War II. By mid-century that number could be over 200 percent. Even modest increases in interest rates would sharply drive up total federal payments. And if investors increasingly doubt Uncle Sam’s ability to carry such a debt burden, the possibility of a financial crisis will grow. The US already includes individual jurisdictions, such as Illinois, that look like Greece before its financial collapse. Imagine similar US government insolvency nationwide.
The American people have few friends in Washington. Although Democrats are on the offense, Republicans were wildly irresponsible when they last held the majority. Watching the Democrats this year gives new meaning to the joke line, “I’m from the government and I’m here to help you.” Remember Sen. Murray.
