President Biden’s extreme economic proposals won’t get the economy back on track

Last week’s inflation numbers bear a key message for Americans struggling with high prices — things will only get worse if President Joe Biden is successful in enacting the extreme economic agenda he touted in his State of the Union address.

Inflation remains elevated far above what it was when President Biden took office. Americans are still paying more for essential amenities, after the president’s policies have already raised costs for the average family by more than $8,000 over the last two years.  

President Biden’s agenda is full of big proposals, specifically more big government spending, more big government protectionism, and more big government intrusion into the economy—the same sort of policies that helped bring about the current economic mess in the first place. 

When it comes to spending, Biden has fudged the facts. He stated in last week’s State of the Union address that the deficit has been reduced by over $1.7 trillion and implied that his administration has begun a return to financial health after years of profligacy. Yet that reduction is only the result of COVID-19 stimulus spending expiring and new deficit spending authorized under the Biden administration (to the tune of $4.8 trillion). Our fiscal house has in no way been restored to order.

At the same time, the Congressional Budget Office is projecting skyrocketing national debt in the coming decades thanks to increases in borrowing costs and spending on entitlements like Social Security and Medicare. Biden has failed to come to terms with this dire fiscal reality.

Instead, last week he touted costly new government subsidies for private industry, like the CHIPS Act, that will result in benefits for some companies at the expense of others. Yet, in the same breath that he praised corporate handouts, he went on to accuse corporations of “not paying their fair share” and demanded that taxes on stock buybacks be quadrupled — which would ensure that capital that could potentially be invested in new innovations will instead stay parked in old ones. 

As Biden, and everyone else who is not blinded by the politics of class warfare surely knows, taxes on corporations are not just taxes on wealthy elites. Corporations are comprised of their shareholders, and the vast majority of corporate shares are held in the retirement accounts of hardworking people who have saved for their future. Taxes on corporations and buybacks inevitably means higher taxes on the retirement accounts of hardworking Americans. Economists throughout the ideological spectrum also agree that a significant share of corporate taxes are borne by workers in the form of lower wages.

Biden cited high profits to justify a proposal to quadruple a tax on oil companies, saying that it is proof that the companies failed to invest in production to keep prices lower. However, this story leaves out his administration’s own role in high energy prices. The Biden administration wasted no time revoking the permit for the Keystone XL Pipeline, issued an executive order suspending all oil and gas leasing on federal lands, and instituted a myriad of other regulations and restrictions on the industry, all of which has discouraged new investment in an abundant energy source.
On the one hand, Biden has loudly proclaimed he will end an entire industry and begun implementing onerous regulations to bring about its extinction, and on the other, he has castigated energy suppliers for not investing more in production in the industry he says he will end.

Likewise, if the president was serious about small businesses being an act of hope, he would not be supporting the PRO Act that would force freelancers and other independent workers to surrender their independence and become employees rather than entrepreneurs — among dozens of other radical intrusions into the economy that would tilt the playing field against small business. When a PRO Act-style reform was enacted in California it didn’t lead to stories of hope, but stories of despair when freelancers had to leave the state or come to terms with the destruction of their livelihood. 

President Biden likes to talk about coming together, but his actions tell a different story. Instead of recognizing the economic crisis Americans are facing and making serious proposals to work across the aisle in divided government, Biden has proposed radical, unworkable, partisan plans for government expansion and increased inflationary burdens. The current crisis, and the president’s failures to come to terms with it, demonstrates just how broken Washington is.

Akash Chougule is vice president at Americans for Prosperity.