Let’s start with one hard truth. The American people did not give Joe Biden a mandate for a progressive policy agenda when he squeaked into the Oval Office last November. He didn’t win because the country woke up on Election Day and decided to take a hard-left turn, giving Democrats a green light for a historic spending spree and huge tax increases to pay for it.
In fact, exit polls show quite the opposite. The country, which already self-defined as center-right, moved further away from the progressive left, not toward it.
Biden won not because of his policies but because just enough voters had had enough tweets for a lifetime. They were flat-out tired of constant rhetorical brawls and behavior they deemed unpresidential. So Biden benefited by promising unity and a bipartisan approach to governing. So far, we’ve gotten neither.
Biden, Chuck Schumer and Nancy Pelosi seem to be operating under the illusion that when they last controlled the White House and Congress in 2009, they didn’t go big enough. In reality, Barack Obama’s mistake was to focus his attention and that of Congress on health care and put Biden, his vice president, in charge of bringing the economy back.
The 2009 stimulus bill failed to get the country back to work. We were in the 15th consecutive month of 9 percent unemployment or higher when Biden touted the “Summer of Recovery” in June 2010. Meanwhile, the Obama administration bet its political capital on the Affordable Care Act, piling new regulations on job creators —especially small businesses. It was a bad bet. Voters saw the economy as the priority, and by Election Day, the country was in its 20th consecutive month of 9 percent unemployment, a figure that would grow to 30 consecutive months.
A case of déjà vu
So here we are, 12 years later, and once again, the country is trying to recover from another unexpected gut punch to the economy. Biden is touring the country, hyping the enactment of the $1.9 trillion COVID-19 relief law, hailed by liberals as the most progressive legislation to pass Congress since the FDR era. No one can say that the relief package, packed with spending for the Democratic Party’s special interests, didn’t go big enough. It bails out blue states from coast to coast, pays off the teachers’ unions and funds other far-left wish-list policies, with less than 10 percent of it actually going to fund real COVID-19 relief efforts.
How did it pass? By reconciliation, with no Republican support.
Despite winning Congress and the White House by razor-thin margins, Democrats have decided to double down on Obama’s strategic mistake that cost his party the House in 2010.
Their takeaway from Obama’s first two years isn’t that they lost the House because he put his progressive health care policy ahead of what people wanted: jobs. Instead, they appear to be laboring under the assumption that they may not get another chance to transform what is a center-right country into a progressive paradise. So let’s go big and, if we have to, use reconciliation or a change in the Senate rules to get it done.
Their next grand plan appears to be passage of the biggest tax increase in history, the holy grail of progressive politics, despite an economy still struggling to recover from the COVID-19 lockdowns. I am always puzzled by the hostility of progressives toward the private sector without which there would be no funds for the policies they support.
How big will those tax hikes be? While we don’t know all the details, it looks like Biden will propose a $2 trillion to $4 trillion tax increase over the next 10 years to pay for a projected $3 trillion more in spending on progressive plans and programs. According to news reports, the Biden team is considering raising the corporate tax rate, imposing a 95 percent excise tax on pharmaceuticals if the industry doesn’t accept price controls and putting a trillion-dollar financial transaction tax on trading stocks and bonds.
Wait, there’s more. Also being considered is a $2 trillion energy tax, raising the estate tax and potentially taking aim at small businesses and S corporations. In what universe are these tax increases a good idea when thousands of small businesses are struggling or closed and millions are still unemployed?
And this isn’t going to pay down the country’s exploding debt. It’s to pay for another infrastructure stimulus plan. And, I suppose, Schumer’s crusade to repeal the limit on state and local tax deductions, which would give a massive tax break to millionaires and billionaires in blue states with high taxes. Not exactly the kind of tax “fairness” Biden promised in the campaign.
Voters not on board
More to the point, this isn’t the direction the country wants to go. According to a recent Winning the Issues survey, by a 2-to-1 margin (51 percent to 24 percent), voters said keeping the 2017 tax cuts in place would help in the economic recovery from COVID-19 as opposed to repealing them. Additionally, Democrats contemplating huge tax increases might want to listen to what voters had to say when asked, “What is the highest percentage tax rate that any individual in the U.S. should pay for all taxes combined, including federal, state, local, property, payroll and wealth taxes?” The average response was 24 percent, as a cumulative percentage of their income.
Now may be the time for the Biden team to remember the last big tax increase (modest, by today’s standards) signed by President Bill Clinton in 1993. A year later, Republicans won back the House for the first time in 40 years and control of the Senate, as well. At a fundraiser the following year, Clinton had this to say, “Probably there are people in this room still mad at me at that budget because you think I raised your taxes too much. It might surprise you to know that I think I raised them too much, too.” Two years after that, he signed the 1997 tax cuts, and four years of 4 percent growth ensued (1997-2000), along with a balanced budget (1998-2001).
Biden needs to take a lesson from Clinton’s playbook and reject progressive calls to impose what would be a job- and growth-killing tax agenda.
David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for Speaker Newt Gingrich. He advises Fortune 100 companies, foundations, and nonprofit organizations on strategic planning and public policy issues, and is an election analyst for CBS News.