by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Reports emerged late Wednesday afternoon that Sen. Joe Manchin, D-W.Va., had reached an agreement with Majority Leader Chuck Schumer, D-N.Y., to revive Build Back Better legislation. Details remain scarce, but the agreement would go beyond Democrats’ most recent plan: to raid the Medicare prescription drug program to fund welfare subsidies for the wealthy. In addition to these provisions, the nascent agreement would raise taxes to fund a series of “green energy” climate subsidies.
The timing of the announcement seems very intentional — on multiple levels. First, it came mere hours after the Senate approved a package of subsidies (read: corporate welfare) for semiconductor chip manufacturers that Minority Leader Mitch McConnell, R-Ky., had said in June he would block if Democrats continued with a partisan reconciliation bill. For Manchin and Schumer to revive a beefed-up Build Back Better in a way that double-crossed McConnell makes the latter look somewhere between weak and foolish.
But more importantly, Schumer publicly locked Manchin into supporting tax increases mere hours before the Bureau of Economic Analysis reports on second-quarter gross domestic product. That report could well show that GDP contracted for the second straight quarter, meaning we’re in a recession — despite what the media tell you.
Piling on revenue hikes when the economy has begun sputtering violates advice that Barack Obama, of all people, gave in 2010. In response to a question asking “how raising taxes on anyone during a deep recession is going to help with the economy” — with the emphasis in the original — Obama responded:
“Well, first of all, he’s right. Normally, you don’t raise taxes in a recession — which is why we haven’t, and why we’ve instead cut taxes.” …
… At the end of that year, Obama signed an agreement that extended all the Bush tax cuts, on the heels of the financial crisis.