Yes, It’s Still the Economy, Stupid

President Biden proposes a budget of $ 6 trillion which he claims will “strengthen our country’s economy and improve our long-term finances.” Its acting director of the Office of Management and Budget, Shalanda Young, told reporters that the budget is aiming for “robust, sustained economic growth and widespread prosperity.” The numbers tell a different story, and voters seem to be paying attention.

The US expects strong growth in the short term as the pandemic recedes and economic activity resumes. But OMB also expects slower growth in the long term. It predicts GDP growth averaging just over 2% per year between budget years 2022 and 2031, while the non-partisan budget bureau of Congress predicts growth averaging less than 2% over the same timeframe. Both growth rates are anemic, which also makes “broadly shared prosperity” unlikely.

Still, Mr Biden’s advisors seem to believe that the dramatic spike in spending will pay off in next year’s elections. As White House chief adviser Mike Donilon wrote in a February memo, “Voters are hurt – and they are looking for leadership that will produce plans and solutions.”

The increase in federal spending in 2022 may turn out to be a formula for success for the Democrats. On the other hand, this cannot be the case either. Especially since Mr Biden would raise taxes high enough to devour more GDP than any 10-year period in American history, according to Gordon Gray of the American Action Forum. The spending frenzy would also push the country’s national debt to 117% of GDP – more than the previous record GDP percentage that Washington achieved in the year after World War II.

Recent polls suggest that the Democrats’ approach may not help them in the medium term. 46 percent of respondents a Fox News poll in late May said the president’s positions were “too liberal”, down from just 36% in December. The number of those who perceive his positions as “too conservative” fell from 15% to 10%. Only 40% of the respondents now think that Mr. Biden is “about right”.

The poll, conducted before the president increased his spending request, also asked what respondents thought of the president’s plans for government spending. 47% said they were asking “too much”, while 33% said it was “about the right amount” and only 17% said it was “not enough”. Now that the bill has risen from $ 4 trillion to $ 6 trillion, it makes sense that the number of voters who view the president as too liberal or wasteful could increase.

Further evidence of the political downside of the president’s agenda comes from a HarrisX Poll of 10 Democratic Congressional Districts ran May 18-23 for No Labels, a non-partisan group led by Governor Larry Hogan (R., Md.) and former Senator Joe Lieberman (D., Conn.). Last year all 10 districts had close competition for the presidency and the congress.

Several counties in seven of the districts believe that both the country and the economy are on the wrong track. Voters are divided on corporate tax increases, but a strong majority in all 10 districts say that “overall taxes” should either “be lowered or stay the same”, while between 61% and 71% in each district “the Refuse to increase federal taxes ”. With majorities between 66% and 72%, voters in all 10 districts oppose the capital gains tax hike, while between 64% and 70% in each district oppose a $ 1.8 billion increase in taxes – the total spending on Mr. Bidens American Families Plan.

Majorities in all 10 districts oppose the Democratic proposal to spend $ 4 trillion on “infrastructure, climate change and welfare,” as the president proposed in his American Jobs Plan and American Families Plan, favoring a $ 1 trillion proposal US dollars to spend on infrastructure. Voters would rather see a plan passed “with bipartisan support” than through “parliamentary techniques and a wafer-thin majority”.

Several in eight out of ten districts would be less likely to support someone who votes for a $ 4 trillion spend or a $ 1.8 trillion tax hike. A large number out of 10 will be less likely to aid anyone who votes to “widen the deficit by $ 2 trillion”. How do you think the president’s $ 6 trillion proposal will go down?

Democrats may rely on Republicans to emphasize “culture war” issues rather than a focused, principled attack on the president’s spending and tax hike orgy. This is not to say that issues such as police defusion, critical racial theory, and border security are unimportant. But, like most years, the economy is likely to be the real battleground for Congress in 2022. The sooner Republicans realize this, the better.

Mr. Rove helped organize the American Crossroads Political Action Committee and is the author of “The Triumph of William McKinley” (Simon & Schuster, 2015).

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Comments are closed.