U.S. Sen. John Thune (R-S.D.) today discussed the negative effects of the massive partisan spending bill Democrats pushed through Congress earlier this year. Inflation reached its highest level in nearly 13 years, with consumer prices up 5 percent from a year ago. Core inflation, which excludes food and energy prices, soared to its highest level in nearly three decades. Thune said that despite the high levels of inflation, Democrats are pushing trillions of dollars in additional spending and raising taxes on hard-working Americans.
Full text of Sen. Thune’s speech below (as prepared for delivery):
“Mr. President, unfortunately predictions about the negative economic effects of the so-called American Rescue Plan seem to be coming true.
“In March, Democrats pushed through this massive partisan spending bill.
“They claimed it was urgently needed COVID funding.
“In reality the bill was filled with unnecessary spending – from a staggering $350 billion slush fund for states, a majority of whom didn’t need any more government money to weather the rest of the pandemic, to almost $129 billion for schools, even though schools had spent just a tiny fraction of the tens of billions of dollars Congress had already given them.
“At the time, Republicans warned about the bill’s level of spending.
“More than one liberal economist warned about the size of Democrats’ spending plan, with former Obama adviser Larry Summers noting that the bill could, quote, ‘set off inflationary pressures of a kind we have not seen in a generation.’
“Well, it turns out he was right to be worried.
“Last week, the Bureau of Labor Statistics released its report on May’s consumer prices.
“And the news wasn’t good.
“Inflation reached its highest level in nearly 13 years, with consumer prices up 5 percent from a year ago.
“Core inflation – a measure of inflation that excludes food and energy prices – soared to its highest level in nearly three decades.
“And what does that mean?
“Higher prices for Americans.
“The price of everything from bikes to bacon has shot up.
“Auto insurance costs 17 percent more than it did a year ago.
“Used cars cost 30 percent more.
“Shoes and whole milk cost 7 percent more.
“Inflation is starting to look like it could become ‘non-transitory.’
“Or what most Americans call a serious problem.
“And Democrats’ government spending spree is contributing.
“But of course that’s not causing Democrats to hit pause on the economic overstimulation.
“Democrats are looking at more trillion-dollar-plus spending bills.
“The president just released a budget proposing to hike government spending by trillions of dollars over the next 10 years.
“Under the president’s plan, the federal budget would be $6 trillion for fiscal year 2022, rising to $8.2 trillion for fiscal year 2031.
“To put those numbers in perspective, the entire federal budget for 2019 came to $4.4 trillion.
“The president is proposing to nearly double that by 2031.
“Mr. President, it’s disturbing that the overspending in the American Rescue Plan hasn’t made Democrats think twice about future government spending sprees.
“But it’s not all that surprising.
“Because in the Democrat Party these days, dogma tends to triumph over reality – or practicality.
“Democrats are ever more fanatically committed to expanding government – and taxing Americans – and they’re not slowed down by little details like damaging the economy.
“Take the increased unemployment benefits situation.
“Congress provided a federal increase in unemployment benefits early in the pandemic, when businesses were closed and workers had few alternatives to keep their families afloat.
“But as early as last fall there were signs that our economy was rebounding.
“And with the arrival of the COVID vaccines, it became clear that America would be able to get fully back to work sooner rather than later.
“But Democrats insisted on continuing the increased unemployment benefits until September 2021.
“And the effect has been predictable.
“Despite record-high job openings, many people are declining to return to work because they can make more money staying home and drawing unemployment benefits.
“Businesses hit hard by the pandemic are desperate to return to full operating capacity, but they’re being slowed down by the fact that they can’t find workers.
“In response to the worker shortage, a number of governors around the country decided to stop accepting the federal increase in unemployment benefits.
“They wanted to help businesses in their states and get their residents back to work.
“And how did Democrats respond?
“Well, more than one Democrat responded by suggesting that the federal government step in to make sure these payments continued.
“Despite evidence that the increased unemployment benefits were discouraging workers from going back to work, some Democrats wanted to prevent governors from halting these payments.
“Mr. President, nowhere is Democrats’ devotion to dogma over reality more notable than in their proposed capital gains tax hike.
“I don’t need to tell anyone that ‘Tax the rich’ has become the rallying cry of the Democratic Party.
“And one of the ways the president plans to tax well-off Americans is by doubling the top capital gains rate to almost 40 percent.
“The problem, Mr. President, is that a 40 percent capital gains rate substantially exceeds the revenue-maximizing rate.
“In non-accountant speak, that means that Democrats could collect more government revenue if they raised the capital gains tax less.
“You’d think that the president would want to maximize the revenue the government could collect, especially with his plans for 10 years of massive government spending.
“But in today’s Democratic Party, taxing the rich is more important than maximizing government revenue.
“Just like tax hikes on corporations are more important than making sure our economy grows and that American companies can compete on the global stage.
“Or raising taxes is more important than passing legislation to boost American infrastructure.
“The president could have reached an agreement with Republicans on a substantial infrastructure bill, but he tanked negotiations because he was insistent that any bill repeal parts of the 2017 tax reform legislation – the same legislation that had driven up wages and boosted our economy before the pandemic hit.
“Democrats are so committed to taxation that they included a provision in the bloated COVID legislation they passed specifically prohibiting state governments from using COVID relief money to cut taxes.
“Apparently Democrats are fine with government payments to Americans, but allowing them to keep more of their own money is off the table.
“Mr. President, Democrats have long been interested in higher taxes to pay for more government spending, but to today’s Democrats, taxation is rapidly becoming a good in itself.
“Democrats are no longer just interested in raising taxes to raise revenue, they’re interested in raising taxes because they believe that success should be punished.
“In the increasingly socialist Democrat Party, it doesn’t matter how hard you worked to get where you are, how many people you’ve created jobs for, or how much good you’re doing with your money – if you’ve been successful, you should be heavily taxed for your efforts.
“Even if those heavy taxes actually cost the government money or hamstring the American economy.
“Mr. President, the growing commitment in the Democrat Party to an increasingly rigid, socialist dogma is deeply disturbing.
“And it’s certainly not limited to a fanatical commitment to taxation or spending.
“It embraces everything from a social agenda that is increasingly hostile to freedom of religion and freedom of speech, to a fundamental belief that government knows best when it comes to how Americans run their lives.
“But today I’ll limit myself to taxes and spending.
“Let’s hope that Democrats rethink their planned government spending sprees before inflation really gets out of control and hardworking Americans pay the price.”