My hat is off to U.S. Rep. Jared Golden — for a second time.
On Nov. 19, Maine’s 2nd District congressman was the sole Democrat to vote against the Build Back Better Bill passed by the House of Representatives. Two weeks earlier Golden was one of a handful of Democrats who refused to agree to a quick vote on the bill because he’d not had sufficient time to review its contents — a decision I applauded in my Nov. 14 column.
Cynics have been quick to accuse Golden of grandstanding for voters in his red-leaning district, claiming he knew the bill would pass even without his support. The default assumption in politics is that elected officials in Washington only act out of self-interest, but I don’t think that was the case here. Rather, his was a stance that reflected courage, intelligence and integrity.
Golden had little to gain and much to lose by bucking his entire caucus and has already come under heavy fire from Democrats in Maine and across the nation on account of his vote. At the same time, he announced that he would still support the bill if the Senate passed a version which addressed his concerns. Should that occur, he will incur the eternal wrath of the GOP as well.
Based on a Nov. 18 statement from the congressman’s office, his objections appear to boil down to three issues: The legislation provides too many “giveaways to the wealthy,” does not pay for itself, and injects excessive funds into the economy at a time when inflation in the form of rising prices is already affecting Mainers “every time they go to the grocery store or refill their gas tank.”
These objections are completely legitimate.
Build Back Better represents a nearly complete surrender by Democrats to Republican tax policy. The GOP for years has consistently supported tax cuts to starve the federal government of revenues and regressive tax policies which allow the wealthy to pay a much smaller percentage of their income in taxes than the middle or blue-collar class. This bill not only leaves much of that policy in place but actually makes it worse.
For instance, the 2017 Republican tax bill capped the federal income tax SALT (state and local tax) deduction at $10,000. Build Back Better would increase the deduction to $80,000. Skipping the math, let’s just say that anyone who earns enough income or owns a big enough home to pay $80,000 in state income and local real estate taxes can get by just fine without additional tax breaks. (Consider that a Maine household earning $200,000 pays about $11,000 in state income taxes, while the state’s median property tax bill in 2021 is about $2,000). Moreover, the higher SALT deduction would cost the Treasury an estimated $275 billion in lost tax revenues through 2025.
Build Back Better also preserves the 2017 tax provision that expanded child credits from families making under $130,000 to those making up to $400,000, thus redefining what it means to be “middle class” and aiding affluent households that don’t need it. Similarly the bill’s new refundable credits for the purchase of electric vehicles costing up to $80,000 would be available for joint filers who earn as much as $500,000, again a gift to the affluent, who would likely buy an electric vehicle without it.
President Biden has repeatedly promised that Build Back Better would pay for itself. It won’t. The latest Congressional Budget Office estimates that the bill will cause a net increase in the deficit of totaling $367 billion over a 10-year period. That’s because Democrats lacked the courage to impose a broadly based tax increase sufficient to fund it, limiting tax hikes instead to the uber-wealthy fringe of society such as corporations earning a profit of over $1 billion and households earning over $10 million annually.
Finally the bill runs the risk of aggravating inflation. We’re headed for an annual inflation rate of 6.2% for 2021, by far the highest since 1990 and over 2.5 times the pre-COVID 2019 rate. Pouring $1.75 trillion more into the economy at a time when labor and products are in short supply will increase the bidding war for scarce resources. This means there will be too many dollars chasing too few available goods and services, thus further pushing prices upward.
Build Back Better has been hailed as the most ambitious piece of social legislation since the New Deal. That it may be, but it’s arriving in a very different economic environment. FDR engineered the New Deal to cure deflation, not inflation. By 1933 industrial production had fallen by 46% and the wholesale price index by 32% while unemployment had reached a high of 25%. One of the major aims of New Deal federal spending was to re-inflate the economy in order to stimulate demand.
There are parts of Build Back Better that will likely have a salutary effect on society, especially the $550 billion earmarked for accelerating the transition to green energy. But the benefits of the bill should be targeted towards those with the most acute need, emphasize programs with the greatest impact, and impose tax increases sufficient to fully cover its costs.
In short, I agree with Golden that Build Back Better bill itself needs to be built back better so that it is more fair, focused and fiscally responsible.
Elliott Epstein is a trial lawyer with Andrucki & King in Lewiston. His Rearview Mirror column, which has appeared in the Sun Journal for 15 years, analyzes current events in an historical context. He is also the author of “Lucifer’s Child,” a book about the notorious 1984 child murder of Angela Palmer. He may be contacted at epsteinel@yahoo.com.
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