Voting on the budget reconciliation bill without having a cost estimate from the Congressional Budget Office, which House Democrats are thinking about doing, would be irresponsible.
Of course, the legislation itself is irresponsible. But to vote without first examining the CBO score doubles down on irresponsibility.
Much of the bill’s contents has been in flux. The complexities of the various taxes and spending interplay like 3-D chess on steroids. The predictable inflationary effects and more will hit every American household.
Democrats should know before going into the vote just how much and the many ways their partisan package will pick their constituents’ pocketbooks.
Consider the prescription drug price controls. The House version of the tax-and-spendthrift bill apparently contains government price-setting authority over certain medicines, a 95% inflation penalty and a set $35 price for insulin. Many are destructive measures from H.R. 3.
Even more gut-punching, government drug price-fixing will go beyond Medicare and Medicaid. It will extend into the commercial market.
That is, the government will dictate to private drug companies and private health care providers and insurers the prices of particular medicines. There’s no other term for this than socialism.
Such government assault on property rights as the budget reconciliation bill foments leads one direction — higher costs, heavier taxation, less efficient markets. Read: spiking inflation, the cruel, hidden tax that hits everyone.
How do we know the partisan reconciliation bill will spur inflation? Bureau of Labor Statistics data show that from 1998 to 2018, average earnings grew about 70%. Over that period, the price of new cars and home furnishings edged down slightly, wireless phone service prices decreased about 50%, computer software costs slid about 70% and TV prices dropped almost 100%.
Guess what happened to the prices of child care, college tuition and hospital services. Those prices became less affordable, increasing roughly 150%, 180% and 225%, respectively.
Government intervenes far less in the parts of the economy where costs decreased over time. But government intervention is extensive in child care, higher education and health care.
These facts beg the question: What is $2 trillion spend-and-tax legislation that’s focused heavily on funding and regulating social services, education, health care and “green” energy going to do to their costs?
Answer: It will most certainly inflate costs markedly and remove market-based elements — such as consumer choice and competition — that would constrain costs, improve quality and increase the value of those goods and services.
If the budget reconciliation bill is enacted, the past several months of rapidly rising inflation are merely prologue. Inflation stands at a 30-year high. We’ve seen seven straight months of inflation above 4% — five of those months over 5% — and October surpassing 6%. Hold onto your wallets.
So, congressional Democrats ought to know beforehand what CBO estimates the effects of such socialistic policies to be. And any congressional Democrats who haven’t lost touch with real-world economics and who understand how innovation, private capital investment and private enterprise far surpass government at allocating resources should vote “no.”
That’s an easy decision when rationality prevails. Government has no business dictating prices for any products or trying to manage the economy, especially where innovations that are under patent or exclusivity are concerned. Unfortunately for America, irrationality rules in Washington these days.