Going Big

The editors of the Wall Street Journal are less impressed by the plan:

Don’t believe the spin that this is a compromise from the $6 trillion that Mr. Sanders floated some weeks ago. That was a feint to make the final number appear more moderate. This would be the largest spending increase in U.S. history, and a huge increase in the size and scope of government. It would lift federal spending as a share of GDP to more than 25% from the modern norm of 20% to 21% or so. Democrats are going for broke—literally.

“Every major program that President Biden has asked us for is funded in a robust way. And we are making some additions to that,” crowed Majority Leader Chuck Schumer, standing next to Mr. Sanders. “Most important, something that Senator Sanders has led, and convinced America is so important, which is a robust expansion of Medicare, including money for dental, vision and hearing.”

Mr. Schumer didn’t mention the cost of this new Medicare fillip: about $300 billion. And for a Medicare entitlement that the Trustees in their annual report say will already start to run out of money as early as 2024.

The details of the budget resolution will be filled out by Congressional committees, but that word “entitlement” is the key. The Sanders-Pelosi strategy—Mr. Biden is along for the ride—is to create several new programs that will expand automatically without an annual appropriation by Congress.

Any American who qualifies will get the cash for universal pre-K, paid family leave, a new federal child-care program, free community college, and more. Democrats will start these programs small, but they will grow inexorably into huge claims on the Treasury and they will be politically impossible to reform or repeal.

The resolution will also underwrite a vast climate agenda, including green-energy subsidies running into the hundreds of billions. Democrats plan more money as well for permanently higher ObamaCare subsidies, teachers unions, affordable housing, home healthcare, food subsidies and welfare programs.

All of this will be “paid for” with a combination of tax increases and phony accounting. Mr. Biden’s spending proposals made this appear to work by offsetting eight years of spending with 15 years of tax increases. Democrats will try something similar to get around the rules of budget reconciliation. Remember how they made ObamaCare look budget neutral in 2010 by claiming a government takeover of student loans was a money raiser? Student debt is now heading to be a trillion-dollar loser.

Raising marginal rates is one thing; raising revenue is another. How much additional revenue will the federal government actually be able to generate just by taxing the 1%? And what effect will that have on the private economy?