Tag Archives: political economy

More Biden, et al., Disingenuousity

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On the matter of raising our nation’s debt ceiling, Senate Minority Leader Mitch McConnell (R, KY) and the Republican caucus in the Senate have been crystalline for months: Progressive-Democrats in both the House and the Senate have the votes to raise the debt ceiling by themselves, and they have the responsibility to do that, given their decision to pass spending bills with no Republican input, without even talking to Republicans in any serious fashion to seek their input on spending.

Now comes President Joe Biden (D).

He called on Republicans to “get out of the way” and let Democrats quickly raise the debt limit. Asked whether he could guarantee that the US would be able to raise the debt ceiling before the deadline, he put the onus on Republicans: “No, I can’t. That’s up to Mitch McConnell.”

Of course, it’s impossible for the Republicans, being the minority party in both houses of Congress, to be in the way in any shape or form. They can’t stop the Progressive-Democrats from raising the debt ceiling; they don’t have the votes.

All that’s required is for Senate Majority Leader Chuck Schumer (D, NY) and his Progressive-Democrat caucus, along with Speaker Nancy Pelosi (D, CA) with her Progressive-Democrat majority, to move the raise along through reconciliation—either as a stand-alone bill or by each house passing the extant reconciliation bill, then adding the debt ceiling raise during Conference Committee discussions. Bills coming out of Conference are passable via simple majority votes—no Senate filibusters on Conference-agreed bills.

The latter move, in particular, would let Schumer put Senators Joe Manchin (D, WV) and Kyrsten Sinema (D, AZ) on the spot, forcing them to choose between reneging on their pious promises to not vote for a $3.5 trillion bill they say is too much to spend all at once and whose breadth of content they say is too broad in order to vote for a debt ceiling raise, or sticking to their promises and thereby vote down the debt ceiling raise.

Nor would that jeopardize a subsequent clean debt ceiling raise bill, should Manchin and Sinema prove themselves good for their promises: the Senate’s Parliamentarian has already said that the Senate’s two reconciliation bills per session limit would not be applicable. A third bill, dedicated to passing a debt ceiling raise, could be done functionally as reconciliation by “modifying” the second reconciliation bill.

Biden, Schumer, and Pelosi know all of this full well. They’re just trying to duck their personal and Party responsibilities.

Siding with the Extremists

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President Joe Biden (D) not only advised his Progressive-Democrats in the House to hold off on trying to pass the “infrastructure” bill. This is the bill, remember, that Speaker Nancy Pelosi (D, CA) had so solemnly promised the more moderate members of Party she would bring to the floor for a vote on 27 Sept. Then after breaking that promise, she promised to have the vote on 29 Sept, then promised 30 Sept, then 1 Oct, then canceled the vote altogether, for a total of four solemn cynical promises broken.

No, that wasn’t all for Biden. He then made his own promise late Friday to the House Progressive-Democratic Party caucus in a closed door meeting in one of their House conference rooms. The “infrastructure” bill

ain’t going to happen until we reach an agreement on the next piece of legislation[.]

That next piece of legislation is the $3.5 trillion reconciliation bill he and his fellows are so anxious to get enacted.

With that commitment, Biden repeated and renewed the promise he made last June to not sign the “infrastructure” bill until he also had his reconciliation bill on his desk. With that renewed commitment, Biden broke earlier, campaign and inauguration speech promises to unite our nation and to govern in a bipartisan manner.

Biden has, instead, openly and irretrievably united with the most progressive of the Progressive-Democrats—the extreme Left of a Party that already has gone far Left.

Wrong Answer

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Treasury Secretary Janet Yellen wants Congress’ authority over the debt ceiling abolished.

She argued Congress makes the decisions on taxes and spending, so it should also provide the ability to pay those obligations.
“If to finance those spending and tax decisions, it’s necessary to issue additional debt, I believe it’s very disruptive to put the president and myself, the Treasury secretary, in a situation where we might be unable to pay the bills that result from those past decisions[.]”

This would, of course, mean that the concept of a debt ceiling itself would be removed.

Wrong answer.

The right answer, which would make a debt ceiling unnecessary (although not abolish it), is to limit spending to within revenues.

Of course, to prevent Congress from running away with tax rates, as the current Progressive-Democrat-run Congress is attempting to do, it would be necessary to limit Congress’ ability to raise tax and fee rates or to create new taxes or fees. One way to achieve that would be to define a priori the specific purpose of each individual tax or fee increase and each individual new tax or fee and then put each one, individually and separately, to a national plebiscite. If the plebiscite rejects the proposition, then the associated spending cannot occur and existing spending must remain within existing revenues.

A fillip: financial planners recommend individual families each maintain a rainy day/emergency fund of some months’ worth of expenses. Texas, and some other States, also do this at the State level. It would be useful if Federal spending were required to be limited to 90% of Federal revenues until a national level emergency fund were accumulated—say an amount equal to a year’s worth of established Federal spending. A year, rather than the several months that planners recommend for individuals, because of the Federal government’s empirically demonstrated profligacy.

Another fillip: index the size of the Federal Emergency Fund to positive inflation as measured by the Producer Price Index or its successor. Positive inflation: the required level of the FEF could never decrease, even in a deflationary environment.

Of course, this would require a Constitutional Amendment in order to be permanent.

Oh, and never mind the horror of Yellen being inconvenienced by the tasks of her job.

Invasive IRS

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In an exchange between Wyoming Senator Cynthia Lummis (R) and Treasury Secretary Janet Yellen that occurred during Tuesday’s Senate Banking Committee hearing, Lummis decried Yellen’s proposal to have banks report to the IRS the (allegedly aggregated) “inflows” and “outflows” to/from all accounts larger than $600.

Yellen’s response was to describe the already extensive invasion of personal financial data the IRS demands and to pooh pooh the added reporting because it’s only two additional pieces of easily ascertained information onto the 1099-INT form.

And:

the IRS has a wealth of information about individuals if you work at a job where you get labor income

Invasion, isn’t enough, though. Yellen added that Government has a $7 trillion tax gap between what Government will collect in taxes and what folks allegedly will owe over “the next decade.”

…there are a class of partnerships, businesses, high-income individuals who have opaque sources of income that the IRS doesn’t have direct information about, and that’s where the tax gap is, not low-income people.

Yellen then justified the $600 threshold with this—and she actually was serious:

so that individuals can’t game the system and have multiple accounts.

Sure. Because a family with a $400,000 annual income—President Joe Biden’s (D) threshold for being Evil Rich—is going to set up 650+ bank accounts just to hide that. Or a business in a cash-intensive industry—bars, restaurants, construction companies, et al.—are going to incur the added expense of setting up myriads of $600 accounts in order to disguise their finances.

This is the cynicism of the Biden-Harris administration regarding us average Americans.

“Unfair and Absurd”

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President Joe Biden (D), through his Press Secretary Jen Psaki (via her daily press conference), said that it’s unfair and absurd that businesses should pass on to their customers the costs represented by higher taxes that Biden and his fellow Progressive-Democrats want to impose on them.

There are some…who argue that, in the past, companies have passed on these [tax] costs to consumers. … We feel that that’s unfair and absurd, and the American people would not stand for that.

Why shouldn’t businesses pass on the costs represented by taxes?

Biden’s claim raises additional questions, too. What other costs does Biden consider unfair and absurd for businesses to pass on to their customers? What is Biden’s limiting principle regarding passing costs on to customers?