While I hate to beat a dead horse, I have to do it — with all respect to horses. The horse is Senator Schumer’s $250 billion industrial policy, corporate welfare, picking-winners-and-losers bait-and-switch. Mr. Schumer turned a procedural motion vote into a massive political pork barrel spending bill, and 16 Republican senators fell for it.
By the way, Mr. Schumer filed a cloture motion to vote and stop a filibuster as early as Monday, probably for a final vote on this monstrosity Tuesday or Wednesday.
Some of the lowlights in the Schumer amendment include: a $54 billion semiconductor subsidy bill, plus a $24 billion refundable tax credit (also known as the government writing checks to semiconductor companies), plus $81 billion for the National Science Foundation (a doubling of the present budget), plus $9.6 billion for the commerce department’s National Institute of Standards and Technology, plus $11 billion for the commerce department’s regional technology hubs (some serious pork potential there), plus $50 billion for the energy department’s Office of Science (think Solyndra, run wild), plus $4 billion for the national labs, plus a billion for “distressed” communities and labor markets (gotta have that one, right?).
I thought Senator Scott put it very well on Fox Business yesterday, when he described this fiasco this way: “Intel Corporation made $20 billion last year, so we're gonna give them some money to build a plant, then we’re gonna give them a tax deduction for building the plant, and then we’re going to give them a tax credit for building the plant, and they can keep doing business in China.”
Sound like terrific ideas? Not so much.
As we’ve discussed, the pandemic-related global chip shortage has actually given way to massive investment from the private sector — as much as $250 billion in private capital — and now the risk is overcapacity as chip prices are falling everywhere. Many firms now are scaling back investment and hiring in response to waning demand.
Isn’t that always the case? Just at the moment the private sector is turning, government comes to the rescue by making matters much worse.
In the Biden years, big-government socialism has proliferated, but we should not imitate China’s big-government central-planning communism.
Our great American system has always been based on the innovation and creativity inherent in free-market capitalism. We should be thinking about making all American industries more competitive by cutting tax rates and deregulating. Not just for some industries: all industries.
Finally, the Republican Party is running on the inflationary evils of the Democrats’ big spending, borrowing, and money-printing policy mistakes that have led our previously healthy economy into a stagflationary malaise.
Yet the 16 GOP senators who are, wittingly or not, providing Mr. Schumer with a filibuster-proof margin for a $250 billion spending bill would be forfeiting the election-year high ground.
Either you’re for inflation or against it. Either you’re for big spending or against it. You can’t have it both ways.
Larry Kudlow was the Director of the National Economic Council under President Trump 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.