Dems Attempting To Resurrect Their Reckless Taxing And Spending Plans At The Worst Possible Time

Senate Democrats Are Proposing $1 Trillion In New Tax Increases, Including A Huge Tax Hike On Small Businesses, And Half A Trillion Dollars In Spending

“Roughly speaking, Manchin and Schumer are working toward legislation that provides $1 trillion in new revenues, half of which would go toward deficit reduction and half of which would go toward energy and health spending. Such a deal is hypothetical at the moment: The tax and energy pieces remain in major flux.” (“Dems’ Climate And Tax Agenda To Consume Congress In July,” Politico, 7/7/2022)

• “Senate Democrats also have a deal to raise taxes on ‘pass through’ income for small business owners who make more than $400,000 annually ($500,000 for couples), with the revenue generated by this tax going to boost Medicare’s solvency.” (Punchbowl AM, 7/11/2022)

• “Democrats are looking at $500 billion in spending and $1 trillion in revenue, two sources with knowledge of the negotiations said, with the goal of putting half the savings toward deficit reduction, a top Manchin priority.” (“Senate Hits The Gas On Biden Agenda Bill As House Democrats Plan Abortion Votes,” NBC News, 7/11/2022)

Democrats Are Proposing A Massive Tax Hike Just As Increasing Numbers Of Economists Are Warning That ‘The Likelihood Of A Recession Has Increased Rapidly This Year As Inflationary Pressures Remained Strong’

“Soaring prices are hurting Americans. The cure is going to hurt, too. It may take a recession to stamp out inflation -- and it’s likely to happen on President Joe Biden’s watch. A downturn by the start of 2024, barely even on the radar just a few months ago, is now close to a three-in-four probability, according to the latest estimates by Bloomberg Economics. … Bloomberg Economics projections suggest Americans will still be pretty miserable come midterm election day. The economy might not be in recession by then — that’s only a one-in-four likelihood — but for many voters it will feel that way.” (“US Faces A Fed-Triggered Recession That May Cost Biden A Second Term,” Bloomberg, 6/15/2022)

“Economists surveyed by The Wall Street Journal have dramatically raised the probability of recession, now putting it at 44% in the next 12 months, a level usually seen only on the brink of or during actual recessions. and the Federal Reserve took increasingly aggressive action to tame them. Economists on average put the probability of the economy being in recession sometime in the next 12 months at 28% in the Journal’s last survey in April and at 18% in January. Since the Journal began asking the question in mid-2005, a 44% recession probability is seldom seen outside of an actual recession. In December 2007, the month that the 2007-to-2009 recession began, economists assigned a 38% probability. In February 2020, when the last recession began, they assigned a 26% probability.” (“Recession Probability Soars as Inflation Worsens,” The Wall Street Journal, 6/19/2022)

“Goldman Sachs Group Inc. economists cut their US growth forecasts and warned that the risk of recession is rising. The Goldman team now sees a 30% probability of entering a recession over the next year, up from 15% previously, and a 25% conditional probability of entering a recession in the second year if one is avoided in the first, they wrote in a Monday research note. That implies a 48% cumulative probability in the next two years versus 35% previously.” (“Goldman Warns US Recession Risk Now Higher and More Front-Loaded,” Bloomberg, 6/20/2022)

“Deutsche Bank AG’s chief executive officer warned the global economy may be headed for a recession as central banks step up efforts to curb inflation, joining a growing chorus of executives and policy makers who are painting a pessimistic picture. … ‘At least I would say we have 50% likelihood of a recession globally,’ the Deutsche Bank CEO said in an interview. In the US and Europe, ‘the likelihood of a recession coming in the second half of 2023, while at the same time the interest rates go up, is obviously up versus the forecasts we had before the war broke out’ in Ukraine.” (“Deutsche Bank, Citi See 50% Recession Chance As Rates Rise,” Bloomberg, 6/22/2022)

“[Deutsche Bank CEO’s] comments came on the same day that analysts at Citigroup Inc. made a similar prediction, citing supply shocks and higher interest rates. Sewing said despite the impact on economic growth, he supported the actions by central banks including the US Federal Reserve because they’re needed to bring down inflation, which he called a risk to democracy, to a more sustainable level. … ‘The experience of history indicates that disinflation often carries meaningful costs for growth and we see the aggregate probability of recession as now approaching 50%,’ the Citigroup economists wrote. ‘Central banks may yet engineer the soft -- or ‘softish’ -- landings embodies in their forecasts (and in ours), but this will require supply shocks to ebb and demand to remain resilient.’” (“Deutsche Bank, Citi See 50% Recession Chance As Rates Rise,” Bloomberg, 6/22/2022)

Larry Summers Said It Would Take Several Years Of Higher Unemployment To Bring Down Inflation

“Former Treasury Secretary Lawrence Summers said the US jobless rate would need to rise above 5% for a sustained period in order to curb inflation that’s running at the hottest pace in four decades. ‘We need five years of unemployment above 5% to contain inflation -- in other words, we need two years of 7.5% unemployment or five years of 6% unemployment or one year of 10% unemployment,’ Summers said in a speech in London Monday. ‘There are numbers that are remarkably discouraging relative to the Fed Reserve view.’” (“Larry Summers Says US Needs 5% Jobless Rate for Five Years to Ease Inflation,” Bloomberg, 6/20/2022)

Voters Are Similarly Pessimistic, As 58% Of Americans Say The Country’s Economic Condition Is Poor And 77% Say The Country Is Headed In The Wrong Direction

According to the latest New York Times/Siena College Poll, 77% of respondents say the United States is headed in the wrong direction. (The New York Times/Siena College Research Institute Poll, 7/11/2022)

• “[V]oters nationwide have soured on [President Biden’s] leadership, giving him a meager 33 percent job-approval rating…. Only 13 percent of American voters said the nation was on the right track — the lowest point in Times polling since the depths of the financial crisis more than a decade ago.” (“Most Democrats Don’t Want Biden in 2024, New Poll Shows,” The New York Times, 7/11/2022)

When asked what the most important problem facing the country today is, more respondents identified “the economy” than any other issue. The second-most cited issue was “inflation and the cost of living.” In total, 35% pointed to the economy or inflation as the most important problem facing the country. (The New York Times/Siena College Research Institute Poll, 7/11/2022)

• “Jobs and the economy were the most important problem facing the country according to 20 percent of voters, with inflation and the cost of living (15 percent) close behind as prices are rising at the fastest rate in a generation. One in 10 voters named the state of American democracy and political division as the most pressing issue, about the same share who named gun policies …” (“Most Democrats Don’t Want Biden in 2024, New Poll Shows,” The New York Times, 7/11/2022)

Overall, 58% of respondents said America’s economy is “poor.” (The New York Times/Siena College Research Institute Poll, 7/11/2022)

• “More than 75 percent of voters in the poll said the economy was ‘extremely important’ to them. And yet only 1 percent rated economic conditions as excellent. Among those who are typically working age — voters 18 to 64 years old — only 6 percent said the economy was good or excellent, while 93 percent rated it poor or only fair.” (“Most Democrats Don’t Want Biden in 2024, New Poll Shows,” The New York Times, 7/11/2022)

The Very Same Democrat Senators Crafting This Reckless Taxing And Spending Spree Behind Closed Doors Once Said That A Recession Is A Terrible Time To Raise Taxes

SEN. CHUCK SCHUMER (D-NY): “If we’re in a recession and we’re in a difficult economic time, I don’t think Sen. Obama or anyone else is going to raise any taxes. You don’t want to take money out of the economy when the economy is shrinking.” (CNBC’s “Fast Money,” 10/27/2008)

THEN-GOV. JOE MANCHIN (D-WV): “I don’t think during a time of recession you mess with any of the taxes, or increase any taxes.” (West Virginia Senate Debate, 10/18/2010)

Once Again, An Analysis From The Nonpartisan Joint Committee On Taxation Shows That Democrats Are Proposing To Raise Taxes On Americans Earning Less Than $400,000 Per Year

SEN. MIKE CRAPO (R-ID), Senate Finance Committee Ranking Member: “While Republican tax reform in 2017 cut taxes for all Americans, and increased the progressivity of the tax code, the Democrats’ approach to tax reform does not cut taxes for anyone, but it would raise taxes on millions of lower-and middle-income Americans at a time when they can least afford it. The economy is already reeling from Democrats’ bad policies and people are struggling to make ends meet. The last thing they need are higher taxes, especially in light of rising odds of a recession and stagflation.” (U.S. Senate Finance Committee Ranking Member, Press Release, 7/11/2022)

“A new pair of analyses by the nonpartisan Joint Committee on Taxation (JCT) shows that the Democrats’ latest tax-and-spend provisions under discussion will increase taxes on millions of Americans making less than $400,000 per year, and the average tax rate for every single income category would increase.  The JCT previously confirmed that the House-passed Build Back Better Act (H.R. 5376) would result in meaningful tax increases for taxpayers at every income level. News reports suggest Democrats are prepared to move forward with the full slate of tax increases in the House-passed legislation, without any tax cuts for lower- or middle-income households. JCT estimates that legislation retaining those tax increases, while removing the social policy tax cuts that had been contained in Subtitle G, would provide zero tax relief for the middle class, with the vast majority of Americans seeing tax increases at a time when they can least afford it.” (U.S. Senate Finance Committee Ranking Member, Press Release, 7/11/2022)

• “In 2023, when we are facing the dual threat of inflation and recession, the Democrats would raise $33 billion from Americans earning less than $400,000 per year, while providing a net tax cut of about $1.5 billion for Americans earning more than $400,000 per year.” (U.S. Senate Finance Committee Ranking Member, Press Release, 7/11/2022)

• “If the Democrats’ tax reform is enacted this year, more than a quarter of Americans earning between $75,000 and $100,000 will see a tax increase next year, as will more than half of Americans earning between $100,000 and $200,000. In 2023, for taxpayers in the income range of $200,000 to $500,000 (85 percent of whom fall in the $200,000-$400,000 range), more than 80 percent will see a tax hike, reinforcing the fact that these proposals will violate President Biden’s pledge to not raise taxes on anyone earning below $400,000.” (U.S. Senate Finance Committee Ranking Member, Press Release, 7/11/2022)