U.S. Sen. John Thune (R-S.D.) today discussed how the Democrats’ radical agenda and out-of-control spending has created the worst inflation in 40 years. Thune noted that Democrats seem unable to recognize that it was their policies that helped create the current inflation crisis, and they are unwilling to address it in a meaningful way.
Thune’s remarks below (as prepared for delivery):
“Mr. President, it took several months – and the worst inflation in 40 years – but finally, finally Democrats are acknowledging that we have an inflation problem.
“The president actually acknowledged inflation in his State of the Union address last week.
“But unfortunately, while Democrats may finally be talking about inflation, they still don’t seem to understand how we got here.
“And they’re continuing to push a whole raft of terrible proposals that would hurt working families and make our inflation crisis even worse.
“So how did we get here, Mr. President?
“Why are Americans currently struggling with huge grocery bills and big price increases on essential goods?
“Well, Mr. President, it’s true that supply chain issues and the reopening of economies after COVID shutdowns created certain inflationary pressures.
“But a big part of the reason things are so bad in the United States right now is because of the American Rescue Plan spending spree Democrats passed last March.
“When Democrats took office last January, inflation was at 1.4 percent – well within the Fed’s target inflation rate of 2 percent.
“And it might have stayed there, had Democrats not decided that they needed to pass a massive, partisan, $1.9-trillion spending spree under the guise of COVID relief – mere weeks after Congress had already passed a major COVID bill.
“President Biden and congressional Democrats took office right after Congress had approved a fifth bipartisan COVID relief bill.
“And it was abundantly clear that we were not in immediate need of trillions more in government spending.
“But that didn’t matter to Democrats.
“Now that they were in control of Congress and the White House, they wanted to take advantage of the COVID crisis.
“And so in the name of ‘COVID relief,’ they pushed through a massive, partisan piece of legislation filled with unnecessary spending and handouts to Democrat interest groups.
“And the results were predictable.
“The bill flooded the economy with unnecessary government money, and the economy overheated as a result.
“Or in the words of Jason Furman in a January New York Times article, and I quote:
“‘The United States has had much more inflation than almost any other advanced economy in the world,’ said Jason Furman, an economist at Harvard University and former Obama administration economic adviser … The difference, he said, comes because ‘the United States’ stimulus is in a category of its own.’
“Unfortunately, Democrats seem unable – or unwilling – to recognize that it was their policies that helped push us into our current inflation crisis.
“In fact, the president used his State of the Union address to push for even more excessive government spending – a sure way of making our inflation crisis even worse.
“And not just increased spending, but major new entitlements.
“Our nation is massively in debt and inflation is soaring, and yet Democrats think now is a good time to create major new entitlements.
“And, of course, raise taxes to pay for them.
“Now, the president claims that he won’t raise taxes on anyone making less than $400,000.
“But that’s actually not the case.
“Analysis of Build Back Better proposals reveals more than one tax hike that would hit Americans with incomes below $400,000.
“And then there are the indirect costs.
“A centerpiece of the president’s tax plans is increasing taxes on corporations.
“But while that may sound like a tax hike on the uber-rich, the truth is that the burden of corporate tax hikes would fall heavily on ordinary workers – in the form of lower wages, decreased job opportunities and retirement savings, and a less vibrant economy.
“Mr. President, the president likes to talk about ‘tax fairness’ – about hiking taxes on corporations and wealthy Americans so that they pay their ‘fair share.’
“Of course, he ignores the fact that wealthy Americans already pay a disproportionately large share of taxes in this country.
“And that the federal government has seen a huge increase in corporate tax receipts thanks in part to business growth in the wake of the Tax Cuts and Jobs Act.
“But all that aside, I find the president’s calls for wealthy Americans to pay their ‘fair share’ highly ironic considering that Democrats managed to include a tax break for wealthy Americans in their Build Back Better plan.
“Democrats’ SALT proposal would overwhelmingly benefit affluent taxpayers in high-tax states.
“Apparently making wealthy Americans pay their “fair share” only applies until wealthy Democrat donors start asking for tax breaks.
“On the corporate tax side, in his State of the Union address the president highlighted the corporate minimum tax he’s proposing.
“What he didn’t mention was that his corporate minimum tax isn’t actually a minimum tax at all.
“Thanks to the clean-energy and affordable housing tax credits the president is advocating, among other credits, companies that take action on Democrats’ preferred policies could end up completely evading Biden’s so-called minimum tax.
“So much for making corporations pay their ‘fair share.’
“Mr. President, in his State of the Union address the president highlighted, quote, ‘the revitalization of American manufacturing.’
“‘Companies are choosing to build new factories here when just a few years ago, they would have gone overseas,’ he said.
“Mr. President, the revitalization of American manufacturing is indeed something to celebrate.
“Unfortunately, President Biden wants to undo the tax policies that helped create the conditions for this manufacturing renaissance in the first place.
“Before Republicans passed the Tax Cuts and Jobs Act in 2017, we were experiencing a wave of inversions – a wonky way of saying that companies were moving their headquarters overseas.
“And why were companies moving overseas?
“Because of the punishing corporate tax system we had in the United States.
“Prior to the Tax Cuts and Jobs Act, the United States had the highest corporate tax rate in the developed world.
“That put American businesses at a real disadvantage next to their foreign counterparts.
“And it created a significant incentive for U.S. companies to move jobs – or their entire companies – overseas.
“The Tax Cuts and Jobs Act addressed this problem by lowering our nation’s massive corporate tax rate and bringing the U.S. international tax system into the 21st century.
“And how did it work?
“Well, in the wake of the Tax Cuts and Jobs Act, inversions stopped.
“And as the president pointed out, companies are building here in America.
“To quote the president of the National Association of Manufacturers, ‘Reducing tax rates drove historic growth in the manufacturing sector.’
“Unfortunately, if the president has his way, this manufacturing renaissance would likely drastically slow or come to an end altogether.
“Hiking taxes on American companies, as the president wants to do, would once again put American companies at a competitive disadvantage next to their foreign counterparts.
“If the president hikes corporate taxes, we won’t be seeing a surge of new building in America or companies keeping jobs here at home.
“Instead, we’ll be seeing fewer American jobs and more jobs and companies heading overseas.
“Mr. President, Democrats have already wreaked a lot of economic harm on American families with their American Rescue Plan spending spree.
“And the other policies they’re pushing – like the tax hikes and new entitlements the president outlined in his State of the Union address – would prolong our inflation crisis and do further damage to our economy and to American workers and families.
“I’m glad Democrats are finally recognizing that inflation is a problem.
“But it would be nice if they could also recognize how their spending helped get us into this mess in the first place – and how their current tax hike and spending plans would hurt Americans and result in a less prosperous economy in the future.
“Mr. President, I yield the floor.”