Rachel Greszler: Beware of the conditions attached to all this government spending


“Give me a one-handed economist,” Harry Truman once asked. “All my economists say, ‘On one side … but on the other’.”

His frustration was understandable. But when it comes to legislation that can affect the well-being of all Americans, it is essential to weigh the pros and cons.

Consider the radical $ 3.5 trillion spending program currently before Congress. Some lawmakers are calling for passage based on a one-sided assessment of the impact its proposals will have on American workers, families and businesses. But as workers who recently benefited from big pay rises only to see them eaten away by high inflation now realize, it’s important to consider not only the benefits something offers, but the consequences as well.

So of course, talk to American workers and families about the brilliant new government programs that may be available to them as policymakers look to spend an additional $ 27,000 per household.

But also tell them how these big government policies might affect the taxes they pay, the paychecks they earn, the opportunities available to them, and the prices they are charged for everything from gasoline. and from groceries to utilities and child care.

Unlike politicians who can seemingly spend other people’s money and incur debt on their behalf, ordinary Americans must balance their budgets and pay off their debts.

Take the proposal to increase corporate taxes. Since corporate buildings cannot pay taxes, it is the people who work there that are hit the hardest, with 70% of corporate taxes being passed on to workers through wages and salaries. lower social benefits.

Speaking of benefits, the new federal paid family leave entitlement program might sound very appealing, especially to large corporations and “blue” states that would receive one-off grants. But the way it’s structured would prevent companies from creating new paid family leave benefits and impose new rules and restrictions on existing programs.

Most workers prefer to talk to their direct supervisor about their need for time off rather than applying to a federal program where remote bureaucrats apply uniform rules to determine their eligibility. And if paid leave is approved, workers don’t want to endure a week-long waiting period, and awarding only a portion of workers’ paychecks isn’t necessarily enough to pay their bills.

Of course, for workers who do not yet have access to paid family leave, a federal program could be a big victory. That is, unless they are among the 45 percent of disproportionately earning workers who could not use federal paid family leave benefits without risking losing their jobs.

Perhaps the heavily subsidized child care proposal sounds like a dream come true. After all, child care is expensive and it can be very difficult for families to find the type of care they want. But only 14 percent of families want the type of child care that this proposal would subsidize. Even after lawmakers pumped hundreds of billions of taxpayer dollars into government-mandated child care centers, many families would find themselves with unwanted child care environments for their children.

Or take the environment. A cleaner is something most Americans can appreciate, but is it worth $ 8,000 more per year for a typical household?

“Pro-worker” legislation seems like a no-brainer because, after all, most households have a worker in them. But what would the “pro-worker” provisions really mean? Most workers do not want $ 600 in union dues taken from their paychecks without their permission, especially if the majority is used to support political causes and political candidates that do not reflect their personal preferences.

Most workers want to be paid according to their productivity, but workers’ legislation targets rigid pay scales. And a growing number of workers want to work independently, but “pro-worker” legislation would in fact prohibit many self-employed workers from being their own bosses.

And finally, for anyone who already fears even higher inflation – or worse, 1970s-style stagflation – the addition of an additional $ 4.6 trillion in federal spending (including $ 1 trillion infrastructure, $ 1 trillion and $ 3.5 trillion reconciliation programs) only exacerbates these concerns.

In addition, specific policies would add fuel to current fires. Finding workers with a record 10.9 million job openings in the United States is hard enough, but the proposed infrastructure package simultaneously calls for increasing the demand for infrastructure workers while limiting the supply of these workers to strictly unionized workers – making about one in eight construction workers eligible for construction projects.

On the one hand, the $ 3.5 trillion package offers something for everyone. On the other hand, it restricts income, limits choices and fuels fiscal distress and inflationary fears. Lawmakers would be wise to replace tantalizing “freebies” with policies that sustainably improve the well-being of Americans.

Rachel Greszler is Research Fellow in Economics at the Heritage Foundation (heritage.org).

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