WASHINGTON—The Subcommittee on Economic Growth, Energy Policy, and Regulatory Affairs held a hearing on Wednesday titled “Bidenomics: A Perfect Storm of Spending, Debt, and Inflation” to examine the failures of President Biden’s “Bidenomics” policies and their impacts on American households, workers, and small businesses.
Key Takeaways:
“Bidenomics” unleashed massive new federal spending and debt – only to deliver historically high inflation and falling real wages that are crushing American households.
- Under the guise of pandemic aid, the Biden Administration went on a trillions-of-dollars spending spree to fund its liberal agenda.
- “The labor market has been affected by this agenda with real wages falling below pre-pandemic trends. […] Even without new tax legislation, inflation increases marginal tax rates on businesses and personal incomes, deterring business investment and reducing real wages,” University of Chicago Professor Casey Mulligan said during his opening testimony.
- Moreover, Carrie Sheffield, Senior Policy Analyst at Independent Women’s Forum, discussed in her opening testimony how rushing through trillions of dollars in government spending left pandemic funding vulnerable to waste, fraud, and abuse. “Fraudulent actors may have also stolen one dollar out of every seven in pandemic unemployment, totaling as much as $135 billion, according to a new GAO report.”
Despite President Biden’s promise not to raise taxes on Americans earning less than $400,000, President Biden’s spending and inflation crisis has most impacted low-income households and seniors relying on Social Security.
- E.J. Antoni, Research Fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget discussed President Biden’s “inflation tax” during his opening testimony. “Inflation transfers wealth from the people to the government and frankly there is no better definition of a tax than that.” He said, “Shockingly, the average American worker now loses more through the hidden tax of inflation on his hourly wages than he pays in federal income tax.”
The effects of Bidenomics are made worse by the Biden Administration’s growth- and jobs-choking regulatory avalanche.
- President Biden has approved more than $400 billion in new regulatory costs during his first years in office to advance his administration’s extreme liberal agenda – including the Green New Deal. This is nearly double what President Obama approved during the same period.
- “Regulatory costs add another layer of hidden taxation, especially burdening small businesses and low-income households,” Professor Casey Mulligan said.
Member Highlights:
Subcommittee Chairman Fallon (R-Texas) noted that Democrats’ expanded Child Tax Credit cost taxpayers trillions of dollars and worsened inflation.
Rep. Fallon: “What has been the impact of the expanded Child Tax Credit on poverty and what has been the impact of inflation on poverty?”
Mr. Antoni: “Inflation is actually the only thing that can increase the poverty threshold. As inflation has outpaced earnings during the Biden Administration, it has caused more people to fall below that poverty threshold.”
“In terms of the expansion of the Child Tax Credit, you would expect that once that went away you would simply return poverty rates for children to that level that they were at previously. But that’s not what we’ve seen. We’ve instead seen the rate go much higher. Again, the reason for that is that is because inflation has pushed that threshold so high that many people’s nominal earnings haven’t kept pace with inflation and have therefore fallen below the threshold.”
Rep. Nick Langworthy (R-N.Y.) asked about the “inflation tax” which hits low-income Americans and seniors relying on Social Security the hardest.
Rep. Langworthy: “Mr. Antoni, your extensive research on inflation has shed light onto the role as a hidden tax on American households. I’m aware of your findings indicating that this inflation tax frequently surpasses federal income taxes. Can you elaborate on how this is possible?”
Mr. Antoni: “As the government creates inflation, it is taking that wealth away from dollar holders. That is how the government actually takes wealth away from you through the hidden tax of inflation.”
Rep. Langworthy: “We’ve all heard the Biden Administration’s promise that taxes would not increase for those earning less than $400,000 a year. Would you say that he’s kept his promise?”
Mr. Antoni: “No, not at all, especially when you consider the fact that inflation falls most heavily on those who make lower incomes. There’s a lot of different reasons for that, one of which is that lower earners tend to have incomes which adjust slower to inflation.”
Rep. Lauren Boebert (R-Colo.) discussed how forty-year high inflation has driven up costs of American household goods, groceries, gas, and utilities.
Rep. Boebert: “Are you aware that just yesterday America exceeded $33 trillion in debt? This is the first time in history. Are you also aware that inflation’s impact is on groceries, and that is at an all-time high? […] Do you know how much American families will pay due to the inflation tax just over the next year?”
Mr. Kogan (minority witness): “Inflation in this case refers to the rate of inflation. That’s how most folks talk about it.”
Rep. Boebert: “But that’s not how they feel it. That’s not how they’re actually paying for the goods and the needs that they’re trying to provide for their families – their food, their gas, their electric bills. The correct answer for how much American families will pay for this inflation tax over the next year is $8,581. That’s per family.”
CLICK HERE to watch the hearing.