Republicans: Manchin-Schumer deal will worsen inflation during onset of recession
Inflation is currently at a record-setting 9.1%.
Republicans are slamming the deal reached by Sen. Joe Manchin and Senate Majority Leader Chuck Schumer to revive the Build Back Better Act, arguing it will worsen inflation — already at a record-setting 9.1% — amid the onset of a recession.
"Raising taxes is a bad thing to be doing right now," GOP Sen. Roger Marshall of Kansas told Just the News on Thursday, citing "the startup of a recession."
The Commerce Department announced Thursday that GDP decreased by 0.9% in the second quarter, the second consecutive quarter of negative growth, signaling the economy has tumbled into a recession by the common, long-standing definition of the term.
"It's a horrible time to be raising taxes, and by the way, it's going to kill jobs as well," Marshall said. "It's going to especially impact small businesses, so it's a horrible idea. The whole idea is absolutely horrible. And we're going to do everything in our power to put an end to it."
Democratic leaders are going to try moving the bill to passage on a party-line vote using budget reconciliation.
Schumer and Manchin announced the agreement in a joint statement on Wednesday evening.
"After many months of negotiations, we have finalized legislative text that will invest approximately $300 billion in deficit reduction and $369.75 billion in Energy Security and Climate Change programs over the next ten years. The investments will be fully paid for by closing tax loopholes on wealthy individuals and corporations," they said. "In addition, the expanded Affordable Care Act program will be extended for three years, through 2025. The revised legislative text will be submitted to the Parliamentarian for review this evening and the full Senate will consider it next week."
The deficit in FY2021 was a record-setting $2.8 trillion. It was $984 billion in FY 2019, prior to the COVID pandemic.
The national debt has now surpassed $30.5 trillion. Given that the federal budget is not balanced, the national debt will continue to increase despite any deficit reduction from the new agreement.
"Federal debt held by the public is projected to equal 98% of GDP" by the end of 2022, according to the Congressional Budget Office.
"In CBO's projections, debt as a percentage of GDP begins to rise in 2024, surpasses its historical high in 2031 (when it reaches 107 percent), and continues to climb thereafter, rising to 185 percent of GDP in 2052," according to a new CBO analysis released on Wednesday.
If Democratic leaders are able to get all 50 Democrats on board with the legislation, it would pass with Vice President Kamala Harris casting a tie-breaking vote. President Biden endorsed the framework of the agreement on Thursday.
Like Marshall, North Dakota Republican Sen. John Hoeven vowed to do everything possible to defeat the Manchin-Schumer deal.
"Obviously I'm opposed to it," Hoeven said. "It's more taxes and more spending, so clearly opposed to it. And we're going to do everything we can to defeat it."
Democratic New York Rep. Jamaal Bowman applauded the deal but said that more needs to be done. The Manchin-Schumer agreement is a revised spending package with components of the original multitrillion-dollar Build Back Better Act.
"It's a really good thing, you know, the expansion of health care access, lowering prescription drug costs, historic investments in climate, almost a $400 billion tax, corporations finally paying their fair share of taxes," Bowman said. "So really, really, really good, but we have to do a lot more work in the areas of investments in affordable housing, public housing, home care, childcare, pre-K, paid leave. There's a lot more work to be done to really meet the needs of the American people and resurrect an economy that works for everyone."
Ohio Republican Rep. Jim Jordan said the Manchin-Schumer deal is going to "exacerbate the inflation problem" in the U.S.
"When you're spending a boatload more money, and on top of that raising people's taxes, how is that going to help our economic situation?" he asked. "And this all comes out literally just hours before we find out we are, in fact, in a recession because of the Joe Biden and Democrat policies that they put in place."