Perhaps the July 14, 2021 Wall Street Journal (WSJ) Editorial Board’s observation of the latest Democratic gargantuan spending bill is best:  “The price of Republicans losing those two Georgia Senate seats in January was always going to be steep, and late Tuesday Democrats presented America with the bill: $4.1 trillion.  That’s how much in new taxes and spending President Biden, Bernie Sanders and Nancy Pelosi hope to ram through Congress with the narrowest majorities in decades.”

Senate Majority Leader Chuck Schumer (D-N.Y.) said the White House and Senate Budget Committee Democrats reached a deal Tuesday night on a monstrous $3.5 trillion “infrastructure” bill that they plan to include in a budget resolution that will be considered soon.  The budget resolution will include budget reconciliation to change spending, revenues, deficits, and the debt limit.  Certain Senate committees will be required to write bills to meet a target and all those bills will be put together in one large legislative package.  Reconciliation requires only a simple majority to pass if all the Democrats are on board and Vice President Harris breaks the tie.  Republicans were not included in the budget negotiations and will not support this fiscally insane spending package.

Leader Schumer said that this new agreement, added to the $1.2 trillion bipartisan infrastructure bill that contains $600 billion in new spending for projects like roads, bridges, and expansion of broadband internet service, would just about reach the $4.1 trillion spending package that President Biden has wanted.  It includes Green New Deal  programs and money for his American Families Plan that includes all sorts of social welfare goodies like “free” education.  Yes, in true 1984 Newspeak, infrastructure now includes social welfare spending.

It is not known yet whether Senate Budget Committee Chairman Bernie Sanders (I-Vt.) will get his wish of lowering the eligibility age for Medicare to 60.  Progressives are pushing hard to do so, but indications are this has not yet become part of the budget.  While many Medicare Advantage plans have offered dental, eyecare, and hearing coverage since their inception, this spending bill would add those benefits to traditional Medicare, which would cost $300 billion over 10 years.  Beneficiaries should expect Medicare Part B premiums to rise in cost.  Apparently, the Democrats are not worried that Medicare is due to go broke in 2024, according to the Congressional Budget Office.

The package would likely make permanent the temporary increases in the Patient Protection and Affordable Care Act (ACA), or Obamacare, premium subsidies, which Citizens Against Government Waste  discussed in a February 2021 Waste Watcher.  These subsidies were increased and extended so now individuals with incomes of 100 to 150 percent of the federal poverty level (FPL) contribute nothing to their premium.  Individuals and families with household incomes greater than 400 percent of the federal poverty level would receive also receive permanent taxpayer assistance.  The 400 percent level is represented by individuals with a yearly income of $51,040 or a family of four with a household income of $104,800.

The following provisions from the American Families Plan could be included in the budget resolution:

• Free pre-school for all three and four-year olds.
• Two free years of community college.
• Two years of subsidized tuition and expanded programs at Historically Black Colleges and Universities, Tribal Colleges and Universities, and other minority serving institutions.
• Increases in Pell Grant awards.
• Permanently extending the increases for the Child Tax Credit, the Earned Income Tax Credit, and the Child and Dependent Care Tax Credit that were instituted in the American Rescue Plan.
• Direct financial support to families for purchasing childcare and raising the minimum wage to $15 for early childcare workers.
• Create a national comprehensive paid family and medical leave program.
• To keep teacher unions happy, expect around $9 billion to train, equip and diversify American teachers.
• Reforming unemployment insurance to adjust the length and funds workers would receive depending on economic conditions.  (Since extending COVID-19 unemployment benefits have already caused workers to stay home, rather than go back to work, expect this to become a permanent problem if this provision should be included in the budget resolution.)

Someone is going to have to pay for all this free stuff, so American workers and businesses should expect their taxes to increase significantly, because all of this will cost far more than the initial estimates, like all government programs that grow larger and larger, because the initial phony accounting makes the numbers look better than they really are.  According to news reports, while no details are yet available on tax increases, Sen. Sanders said, “The wealthy and large corporations are going to pay their fair share of taxes so that we can protect the working families of this country.”  Since the numbers don’t add up with raising those taxes, the claim that no one making under $400,000 will have their taxes raised will quickly become a Big Lie.  And raising taxes is a bad idea for anyone regardless of whether they are wealthy or a large corporation, since the tax cuts that were initiated in 2017 led to one of the most robust economies this nation had seen, with record low unemployment for minorities.

Leader Schumer needs the endorsement of the entire Democrat Caucus to proceed and that is not yet guaranteed.  A lot will depend on what social welfare policies and green energy provisions are included.  More centrist Democrats, like Sens. Joe Manchin (D- W.Va.) and Kyrsten Sinema (D-Ariz.) may not be willing to accept all the spending.

The WSJ Editorial Board nicely sums up the size and impact of the new budget plan: “Don’t believe the spin that this is a compromise from the $6 trillion that Mr. Sanders floated some weeks ago.  That was a feint to make the final number appear more moderate.  This would be the largest spending increase in U.S. history, and a huge increase in the size and scope of government.  It would lift federal spending as a share of GDP to more than 25% from the modern norm of 20% to 21% or so.  Democrats are going for broke—literally.”

How Much is a Trillion Dollars? If you could give $1.00 to a person every second, without taking a break - it would take 31,000 years to reach a trillion.