Probably the most important fiscal negotiation that’s going to take place this year is over the debt ceiling and the budget. So far, it’s gone nowhere.
Speaker McCarthy met with President Biden two months ago with no results, and they haven’t met since. No cup of coffee. No high tea. No drive-in movie. Nothing.
Yesterday, Mr. McCarthy put some heat on Mr. Biden with a strong letter asking for another meeting to reach a deal, and before nightfall Mr. Biden wrote back that he’s not ready. Mr.Biden’s also still calling for a so-called clean bill to raise the debt ceiling without any spending cuts.
Now, he knows, just as everyone in the country knows, that there is going to be a deal to raise the debt ceiling and that deal is going to have spending cuts. The president in his letter says “this has been done by previous congresses with no conditions attached and this congress should act quickly to do so now.”
In fact, though, previous congresses have always compromised with a higher debt ceiling attached to spending cuts and sometimes other measures. Mr. Biden’s hypocrisy is illustrated by just a little bit of recent history, when as President Obama’s vice president he led the charge for a deal back in 2011 that included a debt hike and some tough spending caps with sequestration penalties.
Here’s a snippet from CBS’s “60 Minutes,” Scott Pelley interviewing Mr. Biden:
Mr. Pelley: “The vice president has been up here on Capitol Hill today pressing reluctant Democrats to support the compromise.”
Mr. Biden: “How can you explain the fact that grown men and women are unwilling to budge up till now, and still some of them are still unwilling to budge, by taking an absolute position: My way or no way?”
So of course it’s been done before.
Then, Mr. Biden’s letter to Mr. McCarthy goes on to talk about how Republicans want to raise deficits by $3 trillion with big corporations and the super wealthy not paying their fair share, which is nonsense because the bulk of the Trump tax cuts went to middle- and lower-income people, driving down the minority unemployment rates to record lows, boosting blue-collar family incomes, and so forth and so on.
We’ve been through this so many times. Mr. Biden just keeps lying about the Trump tax cuts and keeps up his drum beat that the rich don’t pay their fair share. It’s all hog wash.
In fact, Mr. Biden claims his budget released a few weeks ago will cut the deficit, but in fact he does it simply by raising taxes on the most successful earners and large and small businesses and American firms overseas, policies that would slam down the economy, raise the inflation rate, and give us a bigger economic mess than we already have.
Don’t forget: Mr. Biden has no spending cuts and $5 trillion in tax hikes. It’s a “Bernie Sanders” budget.
More to the point, Mr. McCarthy has a very constructive letter where he argues that a debt deal should reduce excessive nondefense spending, reclaim unspent Covid funds, and, really importantly, strengthen work requirements for those without dependents who are able-bodied, the kind of workfare reform enacted under President Clinton and that Mr. Biden voted for as a U.S. senator.
I want to repeat this: Mr. Biden voted for workfare reforms as a U.S. senator just as Mr. Biden led the charge to get a debt compromise in 2011 that included spending cuts. Now this is of course a new Joe Biden, today’s version. As I say, it’s a Bernie Sanders version, but perhaps Mr. Biden at some point will regain his consciousness, which had some common sense in those days, believe it or not.
So let’s go back in time to the Clinton-Gingrich work requirement reforms to welfare programs back in the mid-’90s, including welfare, food stamps, SSI, Medicaid, child nutrition, foster care, social service block grants, EITC, and maternal and child health. Total savings way back then were $54 billion. An enormous number in the mid-’90s.
Adjusted for inflation today, that would be worth about $92 billion, and if you include payroll tax revenues paid by those who went to work from welfare, the savings would be well more than $100 billion.
It’s also worth noting the record reduction in poverty that occurred after workfare reform, nearly halving the poverty rate while increasing employment, reducing spending, and cutting deficits.
So hats off to Speaker McCarthy for including work requirements. It would be a huge reform that Mr. Biden once supported.
That is the old Joe Biden, the pre-Bernie Sanders Biden, when Joe Biden was Joe Biden — from Scranton, Pennsylvania.
Now, on top of all this, when you add in Representative Steve Scalise’s H.R. 1 “Lower Energy Costs” bill, which would be a huge factor in cutting inflation and promoting growth, Mr. McCarthy has put together a very strong Republican agenda for economic growth and prosperity — with or without Joe Biden.
From Mr. Kudlow’s broadcast on Fox Business News.
Larry Kudlow was the Director of the National Economic Council under President Trump from 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. and his radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.