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U.S. Sen. John Thune (R-S.D.) today warned that the cost of the Democrats’ trillion-dollar reckless tax-and-spending spree would ultimately fall on the backs of small businesses and hardworking families in South Dakota and around the country. Thune noted that Democrats remain unfazed by the impacts of their radical spending proposals and job-killing tax hikes, even as inflation reached 9.1 percent in June – its highest rate in nearly 41 years.
Thune’s remarks below (as prepared for delivery):
“Mr. President, inflation numbers came out this morning, and once again they were not good.
“Inflation in June was 9.1 percent – 9.1 percent – the highest level since November of 1981.
“Groceries are up 12 percent on average.
“Baby food is up 14 percent.
“Milk is up 16 percent.
“Chicken is up 18 percent.
“And the list goes on.
“Household cleaning products are up 11 percent.
“Gas prices are up nearly 60 percent.
“Furniture and bedding are up 13 percent.
“Utility gas service is up 38 percent.
“Health insurance is up 17 percent.
“And on and on and on.
“Everywhere Americans look, they’re facing price increases.
“Price increases on the most essential items.
“Their utility bills.
“And on top of all this, real average hourly earnings are currently declining at the fastest pace in 40 years.
“58 percent of Americans are living paycheck to paycheck.
“And a growing number of Americans are digging into their savings – when they have them – to make ends meet.
“Others are relying on things like credit cards or visits to food banks.
“Demand for food assistance has soared in recent months.
“One organization in my hometown of Sioux Falls received 600 more calls for food assistance in May of this year than it had received in the same month a year ago.
“And food banks often have fewer resources to meet the need, thanks to declines in donations and the high price of groceries.
“And, Mr. President, there is no end to this pain in sight.
“A recent Joint Economic Committee analysis found that inflation will cost the average household $7,620 over the next year, or $635 per month.
“That is an unsustainable burden for working families.
“Mr. President, by now most Americans are familiar with how we got here.
“When President Biden took office, 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 to pass a massive, partisan, $1.9 trillion spending spree under the guise of COVID relief – mere weeks after Congress had passed a fifth bipartisan COVID bill that met essentially all current pressing COVID needs.
“Democrats’ so-called American Rescue Plan sent a lot of unnecessary government money into the economy.
“And the economy overheated as a result.
“And you don’t have to take my word for it on the damaging effects of this legislation.
“Here’s what one Democrat economist who worked in the Obama administration had to say on the subject: “The $1.9 trillion American Rescue Plan passed in the early days of the Biden administration will go down in history as an extraordinary policy mistake.”
“Or as another former Obama adviser noted, and I quote, “The original sin was an oversized American Rescue Plan. It contributed to both higher output but also higher prices.”
“Mr. President, Democrats were warned that their so-called American Rescue Plan ran the risk of overheating the economy.
“They passed it anyway.
“But what’s almost worse is that even after they saw the inflation that resulted from their $1.9 trillion boondoggle, they spent months last year trying to double down on the reckless spending that helped cause so much inflation in the first place.
“Even as inflation steadily increased, Democrats spent months working to pass their so-called Build Back Better bill – a multi-trillion dollar reckless tax-and-spending spree that would have dumped more unnecessary government money into an already overheated economy.
“Fortunately their efforts ultimately failed last December.
“But like a zombie, Democrats’ Build Back Better tax-and-spending spree just keeps coming back from the dead.
“Yes, you heard that right.
“Despite the fact that our inflation crisis is even worse than it was last fall, Democrats are once again considering a version of their Build Back Better tax-and-spending spree.
“We don’t know all the details yet.
“But what we do know is cause for alarm.
“Democrats are planning to raise taxes by a trillion dollars.
“And a substantial part of that tax increase would come in the form of new taxes on small businesses.
“On small, individually and family-owned businesses, or what are often called pass-through businesses.
“In other words, Mr. President, Main Street America.
“In South Dakota, pass-throughs, such as sole proprietorships, S corporations, and partnerships, employ an estimated 68 percent of the private sector.
“Nationwide, more than 90% of American businesses are pass-throughs.
“And these businesses employ tens of millions of Americans.
“Mr. President, small business owners’ expectations for better business conditions recently hit an all-time low.
“Business owners are struggling with the high cost of everything from inputs to electricity, as inflation continues to soar and global supply chains continue to be sluggish.
“I recently read a comment from one small business owner in South Dakota, who noted, and I quote, ‘It’s hard when you’re working so hard but you’re not making money. … we are right there right now.’
“‘It’s hard when you’re working so hard but you’re not making money.’
“Yes, it is, Mr. President.
“And if Democrats have their way, life for small business owners – and their employees – is going to get even harder.
“Raising taxes on businesses will lead to a combination of lower wages for workers, lower returns for business owners, and higher prices for goods and services.
“It will also make it more challenging for small business owners to reinvest in and grow their businesses.
“Mr. President, as I said, altogether, Democrats are contemplating raising taxes by $1 trillion in their new Build Back Better tax-and-spending spree.
“And those tax hikes and their economic impacts are not going to be limited to small businesses.
“Nor are they going to be limited to families bringing home more than $400,000 – despite the fact that the president has repeatedly pledged not to raise taxes on families making less than that.
“The nonpartisan Joint Committee on Taxation studied the tax-and-spend provisions Democrats are discussing.
“Its analysis shows that lower- and middle-income taxpayers will face significant hits from the proposed tax hikes.
“The JCT analysis found that more than half of Americans earning between $100,000 and $200,000 would see a tax hike next year, as well as a quarter of Americans making in between $75,000 and $100,000.
“Raising taxes on small businesses, including pass-throughs in South Dakota and across the country, is a reckless approach to the economy.
“But apparently Democrats are not content with merely a high probability of recession.
“They want to guarantee that we get there.
“I am at a loss to understand any other reason why they would be contemplating increasing the tax burden on small businesses and middle-class Americans during an inflation crisis.
“Mr. President, Democrats tried their hardest last fall to double down on the spending strategy that helped plunge us into this inflation crisis in the first place.
“Mercifully, they failed.
“Let’s hope that common sense will once again prevail and that Democrats’ latest reckless tax-and-spending proposal will come to nothing.
“American families are already suffering.
“They should not have to deal with the economic consequences of yet another ill-advised piece of Democrat legislation.
“Mr. President, I yield the floor.”