Source: United States Senator for Ohio Rob Portman
November 2, 2021 | Press Releases
WASHINGTON, DC – This evening on the Senate floor, Senator Portman spoke for the seventh consecutive week against Democrats’ proposed multi-trillion-dollar social spending bill. Portman discussed the current troubling economic indicators, particularly the surging inflation that has driven up the prices of everything from gas to Thanksgiving turkeys, hurting working families in Ohio and across the country.
Portman noted that Democrats passing another stimulus bill would represent a doubling down of the policies that created this current state of inflation by raising taxes and stimulating consumer demand. He noted that the actual cost of this legislation could be nearly $4 trillion, rather than the $1.75 trillion figure Democrats cite.
Portman argued that the better path forward is for the House of Representatives to hold a vote on the historic Infrastructure Investment and Jobs Act – landmark legislation he helped negotiate to repair our nation’s crumbling roads, bridges, and other key infrastructure. This legislation, which passed the Senate three months ago on a bipartisan vote of 69-30 will improve competitiveness and not add to the record inflation the economy is currently experiencing.
Portman called on House Democrats to stop holding this critical legislation hostage as leverage to pass the reconciliation bill and vote to pass the infrastructure bill on its own merits.
A transcript of his remarks can be found below and a video can be found here.
“Mr. President, since the Democratic leadership and the Biden administration first proposed the massive tax-and-spend legislation called reconciliation seven weeks ago, I have come to the floor every week to explain what’s in this massive tax-and-spend proposal and why I believe it’s wrong, for the economy, and at a time of high inflation, low economic growth, and record levels of debt. Before I talk about that, though, I think it’s important to consider where we’ve been, how things could be better.
“Before the pandemic began back in February of 2020, largely thanks to commonsense, pro-growth tax reform that was passed in 2017 by Republicans here in the Congress and the Trump administration, we had one of the strongest economies we’d ever seen. We had 19 straight months in February of 2020 of wage growth over 3 percent on an annual basis, 19 straight months of wage growth, real wage growth above inflation. By the way, mostly benefitting lower- and middle-income Americans. We had the lowest poverty rate in the history of our country since we started keeping track of it back in the 1950’s. Blacks and Hispanics had the lowest unemployment rate ever. Overall we had the lowest unemployment rate in 50 years. It was an opportunity economy. We need to get back to that.
“Then of course as everyone remembers, we had to deal with the effects of COVID-19, including shutting down much of the economy. Luckily we now have vaccines that are making it possible for us to return to a relatively normal lifestyle. But there’s one big problem. While the pandemic has finally starting to fade, the economy is being seriously challenged by extremely high inflation. Don’t take my word for it. Here’s what the data says. The latest Consumer Price Index jumped to one of the largest increases in 13 years to 5.4 percent. That means people are paying more for everything. The latest Producer Price Index went up, too. That means the folks who produce the goods are paying more to put them on the shelf. Real wages are actually down because adjusted for inflation, wages are down by an average of 1.7 percent during the Biden administration. So people back home tell me, ‘I’ve got a wage gain, Rob, but I’m not feeling it because inflation is eating up all the gain I’ve got.’ Wage increases may be out there but they’re not above inflation.
“The response by Washington has been unprecedented, what’s called stimulus spending. It’s like adding fuel to the fire. Stimulus spending at a time when demand was already increasing and the economy was already rebounding has been a recipe for inflation. That’s exactly what’s happened. And unfortunately, contrary to what the White House has said, which is this is going to be transitory, in other words, temporary, it looks like it’s here to stay for a while, and middle-class families, of course, are feeling the squeeze. We’re paying 42 percent more at the pump, 42 percent higher this year than last year. It now costs almost $100 to fill up a pickup truck. I know that because I filled up mine in Ohio recently, $85. I just can’t believe that here in Congress we’re thinking about passing additional legislation to make inflation even worse.
“Everything is up. Natural gas is expected to rise in that 40 percent range just as the winter heating season kicks go high gear. It’s not just fuel costs. It’s groceries. It’s furniture. It’s everything. Thanksgiving is just around the corner. Here’s the report from the New York Times. And I read their lead, ’Thanksgiving 2021 could be the most expensive meal in the history of the holiday.’ They’re saying that because everything has gone up. The cost of turkeys has gone up double digits. The cost of pumpkin pie, the cost of everything that people are having to buy for Thanksgiving.
“Unfortunately, the actions of this Democratic Congress are a big part, again, of why this inflation is so high. Back at the beginning of the year, Democrats passed a $1.9 trillion COVID relief bill that mostly did not deal with COVID, but it did provide the most stimulus spending to our economy ever in the history of the Congress. This stimulus spending essentially primed the pump on an economy that was already recovering nicely. Multiple nonpartisan groups, including the Congressional Budget Office here on Capitol Hill told us that the economy was improving already. In fact, CBO said that the economy was recovering and it would recover to its pre-pandemic levels by mid-year. That was by June 30 of this year. Many of us tried to warn that if we overheated the economy, spent more money to prime that pump, that it would result in more inflation – and it wasn’t just Republicans. Larry Summers, who served as the Treasury Secretary under President Clinton and served as a National Economic Adviser for President Obama, basically said that. He warned that injecting so much money into the economy would lead to inflation. And of course it’s lower-income and middle-income Americans who get hurt the worse. It’s basically a hidden tax.
“As I mentioned earlier the annual inflation rate last month was 5.4 percent, but everything I’m seeing is double-digit inflation this year compared to last year. If your wage rate is below that, if your wage increase is below that, maybe you received a 3 percent wage increase, it’s actually going to be harder for you to be able to afford what you need for you and your family. In other words, not too long after we enjoyed a record stretch of wage growth pre-pandemic, that primarily benefited lower- and middle-income workers, we’re now seeing just the opposite – a pay cut for everyday Americans. What do we need to do to address this? Well, stop the stimulus spending. Because that’s helping to fuel this inflation. There are two major bills that Congress is considering right now. One would help and one would make matters worse. What are they?
“Well, the first is the bipartisan infrastructure bill. It passed the Senate in early August with significant bipartisan support. That’s unusual around here, particularly for a bill as significant as this, but we worked to ensure that the bill was one that both sides could support. And it makes too much sense for it not to become law. It will help fix our nation’s crumbling infrastructure. It will fix our roads, our bridges, our rail systems, our ports, which are particularly important right now given the supply chain issues that our country is experiencing. It will also help upgrade our digital infrastructure. High-speed internet will now be available to kids so they can learn, so people can get their health care online, so people who want to start a business can do so. It will boost our nation’s ability to provide that kind of high-speed broadband, particularly in our rural areas.
“Importantly, thoughtful conservative economists like Michael Strain at the American Enterprise Institute and Douglas Holtz-Eakin at the American Action Forum will tell you this bipartisan infrastructure bill is counter-inflationary. It will push back against inflation. Why? Because it adds to the supply-side of our economy as they’ll say. It contributes to our nation’s long-term growth because it makes long-term investment in hard assets. Think of that bridge in your state or your community that needs to be fixed. That spending won’t happen in the next year, it will happen over five, 10, maybe 15 years.
“And it will lead to a more efficient and productive economy. It also will make us more competitive against countries like China, which currently spends more than four times as much as we do on infrastructure as a percent of their GDP. Why? Because they want to get ahead. The bipartisan infrastructure bill also has no tax increases. Let me repeat that. Unlike the second bill we’re going to talk about, the bipartisan infrastructure bill has no tax increases on the economy. It’s no surprise that polling data from CBS news, CNBC and others show that the vast majority of Americans, in this case 87 percent in these two polls, support investing and improving our infrastructure. For these reasons the House of Representatives need to pass this bill without delay and help us achieve this win for the American people.
“It’s been almost three months since the legislation passed here in the United States Senate. Almost three months. It passed by a vote of 69-30. It’s now being held up by progressives in the House of Representatives who want the second bill, the massive tax-and-spend bill, the reconciliation bill, more than they want the infrastructure bill. So they’re holding the infrastructure bill hostage thinking somehow it will enable them to get more moderate Democrats to support the massive tax-and-spend bill. I don’t think that’s going to happen. But meanwhile they’re hurting the American people by holding it hostage.
“The second bill that Democrats are contemplating which is the reconciliation bill, a massive tax-and-spend bill, would inject at least $2 trillion more, in largely stimulus funding, into an already overheated economy in order to try to pay for it. It also includes significant tax increases that will hurt economic growth and jobs. Democrats claim they are taxing the rich and corporations to pay for it. But we shouldn’t be fooled. The middle class will bear the brunt of what they are proposing, as they always do. As an example, the proposed Medicare surcharge on active investment income will hit the millions of small businesses that structure themselves as pass-through entities, as the vast majority do, with an across-the-board 3.8 percent increase on all income.
“Proposed corporate tax increases will hit American workers, based on the analyses of the nonpartisan Congressional Budget Office and the nonpartisan Joint Committee on Taxation. It’s very simple. When you tax a company, the workers end up taking the brunt of it. About 70 percent of the benefit of the tax cuts and about 70 percent of the detriment of the tax increases goes to worker wages and benefits. Costs will be passed down to working families in the form of even lower wages and even more inflation, which means higher prices for everything. That’s bad for the families that I represent and any objective analysis will show that.
“This massive tax-and-spend bill will actually cost a lot more than advertised. Why do I say that? Because it uses some budget gimmicks to be able to make the cost of the bill look like less. Based on a new study that just came out by the Penn Wharton folks, if benefit programs put in place by the bill, let’s say the Child Tax Credit, increase and are not sunset in the ten-year window, then the cost goes from $1.75 trillion to $3.98 trillion. In other words, if you just assume we’re not going to sunset things like the Child Tax Credit, the cost goes to almost $4 trillion.
“Democrats are proposing to end these new benefits part way through their ten-year window to help keep the costs down knowing full well that, historically, benefit programs like this are not ended, but always extended. So taking away the budget gimmicks, the cost of this massive tax-and-spend bill, it gets it closer to $4 trillion. By the way, that’s more than twice as much as Congress has ever spent on a spending bill in the history of our country. I strongly urge President Biden and Democrats in Congress to slow down this process at a time of high inflation, record debt, and consider the devastating economic consequences of what they are proposing. This increased spending combined with job-killing tax increases could lead to the kind of ‘stagflation’ as they call it that we had in the 1970’s. Low growth, high interest rates, high inflation. We never want to go back there. Yet if we don’t change course, we could be heading in that direction.
“Here’s a better solution. Just pass the right bill. The bipartisan pro-growth infrastructure bill that’s been stuck in the House of Representatives for almost three months. President Biden has said he will sign it into law. It will be a victory for the American people. Stop holding it hostage. Instead of holding it hostage, do something good for our infrastructure everyone relies on. Good for our economy, good for American families, and good for the country right now. As we approach the Thanksgiving holiday, it would be a needed bipartisan victory for which all of us, Republican and Democrat alike, could give thanks.”
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