President Joe Biden and House Speaker Kevin McCarthy are going to meet on Wednesday. It should be fun.
We don’t know if it’s a lunch, a cup of coffee or diet coke, or what. It could be very productive. Mr. McCarthy has said he’s going to the meeting to have a productive discussion and begin the negotiations for a debt ceiling increase coming this summer that must include some budget spending restraint. From the Sunday talk shows, take a listen:
REP. KEVIN MCCARTHY: “I know the president said he didn’t want to have any discussions, but I think it’s very important that our whole government is designed to find compromise. I want to find a reasonable and a responsible way that we can lift the debt ceiling, but take control of this runaway spending.”
On the other hand, Mr. Biden has a different vision. Take a listen to this from his recent speech:
BIDEN: “I will veto everything they send me.”
Well, he can’t veto everything because the House has the power of the purse. You can’t have a spending bill or a debt bill without the House.
So, I would say Biden’s position is both politically hostile and legislatively dumb. I’d also say Biden knows this and he’s just posturing, but poll after poll shows that the public wants spending restraint alongside an orderly increase in the debt ceiling. I mean, every poll shows this and then, in that speech last week, Biden once again was incapable of telling the truth about the economy, because he says that when he came into office the economy had been “reeling.”
Of course, the economy was actually growing at 6.5% with no inflation. Meanwhile, in the past year, the economy has moved into a near recession phase with 1% growth, 6.3% inflation.
The first half had two negative GDP numbers, and frankly the outlook for this year, 2023, is for more negative GDP numbers. At one point, the inflation rate exceeded 9%, wholesale prices were over 10%, and that all started when Biden’s spending binge began in March of 2021.
Then, there’s this bizarre tax point Biden makes, I’m reminded by the WSJ’s James Freeman. Biden says Republicans want to cut taxes for billionaires who pay only 3% of their income, then sometimes that gets changed to the wealthiest 400 billionaire families paid an average of 8% income, but this is baloney, absolute malarky.
We just had a report from the IRS that shows the top 1% of wage earners paid more than 42% of all Federal income taxes for the most recent year, 2020.
That’s what the most successful people paid. Their average tax rate was 26% which is 8 times the tax rate faced by the bottom half of taxpayers.
By the way, since the Trump tax cuts, the share of income taxes paid by the top 1% has increased. The share paid by the lower quintiles has fallen.
So, Mr. Biden’s typical left-wing attack on the wealthy, overlooks the fact that the U.S. has the most progressive tax code among the largest country economies and people at the bottom are virtually paying no taxes at all. The bottom 50% paid 2.3% of all income taxes. The top 50% paid 97.7%.
We report, you decide, but, putting all that aside, the Congressional Budget Office predicts the current spending baseline would add nearly $16 trillion to the deficit over the next 10 years.
Alongside this, the CBO expects the economy to grow by a meager 1.5% yearly. These are bad numbers. Once again, I ask what will it take to get back to the 3.5% growth rate of the post-World War II period, which lasted over 50 years and what will it take to get out of our current secular stagnation?
I don’t pretend to have every answer, but I know a return to a strong prosperity for all Americans will have something to do with less spending, taxing, regulating and inflating.
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Were I a GOP House leader, yes of course, I would take Social Security and Medicare off the table, but I would also argue that the Republican approach for lower spending and limited government will grow the economy faster and hold down the inflation rate.
High growth. Low prices. The big-spending Democratic approach is low growth, high prices. Let’s not make this message any harder than it needs to be. Save America. Stop the spending.