Inflation Rears Its Ugly Head

Just the News is reporting today that the U.S. consumer price index rose 5% in May compared to the same time a year earlier.

The article reports:

The index represents the average change in prices of goods and services such as food, energy, housing costs, and others. It rose 5% in May compared to the same time year earlier. The increase was higher than expected, with the Dow Jones forecasting a slightly lower of 4.7% rise, according to CNBC.

The increase is the largest since 5.3% rise In 2008, just before the financial crisis causing the worst recession since the Great Depression.

The goods with the highest price increases were used cars and trucks, with prices surging 7.3%. Airline tickets were a close second, with prices climbing 7% from a year earlier as the pandemic cut air travel substantially. Food prices have stayed similar to those a year ago, up only 2.2%.

The article concludes:

People are also concerned over the rise of inflation that could be caused by President Joe Biden’s nearly $2 trillion COVID relief package and similarly priced proposed infrastructure package.

The Federal Reserve has not expressed alarm about the increases. Reserve Chairman Jerome Powell has said he expects the pressure on prices to be temporary as the economy reopens after the pandemic, according to Fox News.

Increased government spending will cause inflation. At some point the interest on our national debt is going to cripple our economy. At that point the dollar will be devalued to pay off the debt and the average American will be left with worthless money. The solution to this is to elect people to Congress who will be fiscally responsible. Currently there are actually a few Congressmen who are fiscally responsible, but not enough to make a difference.

Fighting Back

Yesterday Trending Politics reported that 13 states are suing the Biden administration because of the clause in the Covid Relief Bill that prevents states from lowering taxes if they receive aid.

The article quotes The Daily Caller:

The Daily Caller reports: “The 13-state coalition argued that the provision included in the Democrats’ $1.9 trillion coronavirus relief package preventing states from cutting taxes if they accept relief from the federal government is unconstitutional. The coalition, led by Republican West Virginia Attorney General Patrick Morrisey, filed the federal lawsuit Wednesday evening in the U.S. District Court for the Northern District of Alabama.”

In a statement released on Wednesday, Morrisey said, “Never before has the federal government attempted such a complete takeover of state finances. We cannot stand for such overreach.”

…The lawsuit explains that the tax provision is “one of the most egregious power grabs” in U.S. history, adding that the Tenth Amendment doesn’t allow the federal government to stretch their authority like the Biden Administration is doing.

The lawsuit is needed. The provision in the bill is definitely government overreach.

Hidden Inside The Covid Relief Bill

Yesterday Just the News posted an article about the tax increases hidden in the recently passed Covid Relief Bill.

The article reports:

There is more than $57 billion worth of hidden tax increases in President Joe Biden’s $1.9 trillion coronavirus stimulus bill, Just the News has learned.

The final version of the legislation expands the number of employees who are covered by the $1 million limitation on the deductibility of executive compensation.

According to National Law Review, section 162(m) of the tax code “generally prohibits a public company from deducting more than $1 million in compensation paid to a current or former covered employee in a taxable year,” and under current law “the covered employees are the chief executive officer, chief financial officer, and the three other highest compensated officers for the taxable year.”

The executive compensation deduction change in the stimulus bill covers 5 more of a company’s highest paid employees.

“TCJA [Tax Cuts and Jobs Act] included such a limit, but Dems essentially doubled it to make it more draconian,” a House Ways and Means Committee minority spokesperson said. “Dems are under no illusions that their bill is about growth, so them putting a cap on executive pay is just political messaging.”

A $500,000 limit on the amount of losses that “passthrough corporations” can use to get liquidity is also tucked inside the bill, according to a Joint Committee on Taxation document obtained by Just the News.

The Joint Committee on Taxation spokesman also noted that the above provision that the Democrats have ended was what allowed small businesses to get the fast tax refunds from the IRS that kept many of them alive during the lockdowns.

The article continues:

Another tax provision in the stimulus, the second largest rescue package in U.S. history, involves new limitations on the interest expenses that multinational corporations can deduct on tax returns.

This change makes doing business in America less attractive and will return us to the days when American corporations moved overseas.

Aside from the cost of the Covid Relief bill, it is a bill that will stifle the growth of the American economy. That growth would have at least provided some of the money needed to fund the bill. We are headed back to the days of very slow economic growth or no growth at all.

I Wish They Had Read The Bill Before They Voted

I suspect that there are many surprises in the Covid Relief Bill that was just passed by Congress (and expected to be signed by the President this afternoon). However, there is one surprise that caught my attention.

Reason reported the following yesterday:

Buried within the $1.9 trillion emergency spending bill that Congress sent to President Joe Biden’s desk on Wednesday is a provision that could effectively block states from cutting taxes if they accept federal bailout dollars.

That provision, added to the bill by the Senate last week, could put a halt to several states’ plans to cut taxes this year as a way to stimulate economic growth following the COVID-19 pandemic. Depending on how the text is interpreted, the measure could also make it illegal for states to create new tax credit programs like the ones that have become a popular mechanism for expanding school choice. Critics say this expansion of federal control over state policymaking is murky at best, and potentially unconstitutional.

First of all, I am not convinced that even one-tenth of our current Congress has read the U.S. Constitution, so why would they worry about passing a bill that is unconstitutional?

The article continues:

First, the basics: The COVID-19 relief-bill-that-isn’t-really-a-relief-bill contains $350 billion earmarked for state governments, local governments, and Native American tribes. That money is supposed to help governments fill temporary budget holes created by the pandemic—even though the funding vastly exceeds actual state and local budget shortfalls, as Reason’s Christian Britschi has previously reported. States are in such non-dire straits, in fact, that about $150 billion of the state aid distributed as part of last year’s Coronavirus Aid, Relief, and Economic Security (CARES) Act hasn’t even been spent yet.

Since the federal government is giving states money that they don’t need, there are two things state lawmakers can do: Use the federal money to grow government spending or pass that extra cash along to taxpayers by lowering their tax burdens.

However, the Senate inserted language in the American Rescue Plan expressly telling states that they “shall not use the funds provided…to either directly or indirectly offset a reduction in the net tax revenue,” or do anything that “reduces any tax (by providing for a reduction in a rate, a rebate, a deduction, a credit, or otherwise) or delays the imposition of any tax or tax increase.”

That same section of the bill also bans states from depositing the federal bailout into their public pension funds. That’s probably a good idea, but it’s pretty ironic considering that the American Rescue Plan also contains a completely indefensible bailout of some private-sector pension funds run by labor unions.

Stay tuned. I suspect that as time goes on we will find many more legislative gems in this bill.

Your Tax Dollars At Work

Right now I am part of a book study of the book, The 5000 Year Leap. The book deals with the progress made by mankind after the principles of liberty were put in place that allowed men to be free and to prosper according to their efforts. These are the principles that result in the survival of a republic. The first principle cited as a principle of freedom is the concept on Natural Law. One of the principles of Natural Law is justice by reparation, or paying for damages.  Under Natural Law, a criminal who stole something would have to make restitution to the person he stole from. Unfortunately our current justice system does not do that–if the thief is put in jail, the victim pays his room and board in addition to whatever loss he suffered. Congress, in their infinite wisdom, has recently made that system worse.

Just the News reported the following today:

The Senate recently approved the Democrats’ $1.9 trillion coronavirus relief package which includes $1,400 checks for eligible individuals, but some lawmakers are displeased that prisoners will also receive the monetary payments.

The package, which cleared the Senate on a party-line vote Saturday, must still be approved by the House prior to heading to President Biden’s desk, but according to Fox News inmates will be able to receive the individual payments under the legislation, as they were under prior coronavirus relief bills that included $1,200 and $600 payments for eligible individuals.

“The IRS had tried to withhold stimulus checks from incarcerated individuals, but a court forced their hand to offer the checks in October,” Fox reported. “There was nothing written in the previous two relief bills or the one passed Saturday against inmates receiving checks.”

The article continues:

GOP Sens. Bill Cassidy of Louisiana, Ted Cruz of Texas and Tom Cotton of Arkansas offered an amendment to the current stimulus bill to bar federal and state prisoners from getting a payment, but the amendment failed on a tight 50-49 vote, according to Fox News. Cassidy’s press release indicated that the proposal would have saved taxpayers about $1.9 billion.

“Prisoners have all their living and medical expenses paid for by the taxpayer,” Cassidy said during remarks about the proposed amendment. “They don’t pay taxes. They don’t contribute to the tax base. They can’t be unemployed. In other words, inmates are not economically impacted by COVID, and inmates cannot stimulate the economy. But under this bill, Democrats are giving prisoners, again sometimes incarcerated for heinous crimes, a $1,400 stimulus check.”

Democratic Sen. Dick Durbin of Illinois argued against the amendment, saying that it would “cause harm to the families of incarcerated individuals.” 

There is nothing I can add to that last remark!

Voting As A Moderate Only When It Doesn’t Matter

One America News posted an article today about the vote on the Senate vote on the coronavirus relief package. The article notes that Senator Joe Manchin voted for the relief package despite the fact that he has stated in the past he would not support any bills based exclusively on his party affiliation. It is becoming obvious that Senator Manchin votes with the Democrats when it matters. He only votes with the Republicans when his vote has no impact on the outcome.

The article notes:

He also claimed to oppose partisan politics and called for a new era of bipartisanship. However, on Saturday, Manchin voted in favor of the $1.9 trillion bill, which passed the Senate in a 50-to-49 vote along party lines.

…Reports have also found Manchin allegedly only voted to support the stimulus package because the bill was changed to his liking and due to political pressure by the Biden administration.

The Covid Relief Bill is a bloated nightmare.

The Epoch Times reported the following yesterday:

Democrats rejected all but three Republican amendments to the $1.9 trillion relief bill, which cleared the Senate in a partisan vote on March 6.

One Republican amendment to be adopted as part of the marathon vote-a-rama session that lasted more than 24 hours was amendment #1092 on reducing the unemployment insurance plus-up from $400 to $300, introduced by Sen. Rob Portman (R-Ohio).

Portman’s amendment, which provided the extra jobless benefit until July 18, was short-lived, however. About an hour later, Democrats passed their own related amendment, which overrode Portman’s by extending the benefits through Sept. 6.

Sen. Joe Manchin (D-W.Va.) voted with all 49 Republican senators present to approve Portman’s amendment, although he later voted with his Democratic colleagues on the superseding amendment that additionally made the first $10,200 in unemployment benefits tax-free for some households.

The article at The Epoch Times concludes:

The Senate ultimately approved the $1.9 trillion stimulus package with all 50 Democrats voting for, and all present Republicans voting against. Alaska’s Dan Sullivan had to leave to go home for the funeral of his father-in-law.

The bill, also known as the American Rescue Plan or H.R. 1319, was approved by the House on Feb. 27 by a vote of 219–212, with all Republicans and two Democrats voting against it.

The bill will be returned to the House for reconciliation, which is expected to happen early this week.

This is a bad bill and will probably not be improved by the reconciliation process.

Further Dividing Americans With The Covid Relief Bill

Yesterday The New York Post posted an article about some of the items in the Covid Relief Bill.

The article reports:

Polls show most Americans support the federal COVID-19 relief bill. But if they knew what’s in it, they might feel differently. The bill is an affront to the American ideal of equal treatment under law — and a slap in the face for people who want everyone helped fairly.   

Section 1005 of the bill offers “socially disadvantaged” farm owners total debt forgiveness of up to hundreds of thousands of no-strings dollars per farmer. But white men needn’t apply. The bill’s definition of “socially disadvantaged,” drawn from elsewhere in federal law, limits aid to racial groups who faced historic discrimination.

Newly elected Sen. Raphael Warnock (D-Ga.), who proposed the measure, says it will make up for years of discrimination. Sorry, senator, but this is discrimination.

Discrimination likewise mars the bill’s aid to restaurants. It grants restaurant owners up to $5 million per facility to offset losses caused by lockdowns. That’s a lifeline for restaurants barely hanging on.

Here’s the hitch: Only women, veterans and owners of “socially and economically disadvantaged” concerns (again, defined racially elsewhere in federal law) may apply during the program’s first three weeks. Most white males go to the back of the line, even if their needs are more pressing.  

These items in the bill need to be challenged in court–our Constitution states that we are equal under the law (a principle guaranteed by the 14th Amendment). This bill creates a situation where some people are more equal than others.

The article continues:

The bill looks more like reparations than COVID relief. It says farm aid is “for the purposes of addressing the longstanding and widespread discrimination against socially disadvantaged farmers.” Truth is, farmers have been struggling for a decade, and more than half lose money year after year. Minority-owned farms are generally less indebted than those owned by whites, though diminished access to credit may be part of the reason. White and minority farmers alike need debt relief.

Sen. Chuck Schumer crisscrossed the Empire State last weekend, bragging about his role in the relief bill and claiming credit for the $25 billion in aid to restaurants. He warned that 54 percent of New York restaurant owners won’t be able to survive the next six months without help. “They’re needed, because they’re one of the biggest employers in every community in New York, whether it’s urban, suburban . . . or rural.”

That’s the point, Senator. Instead of dwelling on racial or gender equity, the relief bill should focus on ensuring economic survival. All will benefit.

The article concludes:

As Congress debates the relief bill, Republicans should protest the racist giveaways. They’ve hardly been mentioned, and the public is unaware. More are on the way: Warnock and four other Democrats, including New York’s Sen. Kirsten Gillibrand, introduced a bill on Feb. 5 to give 32 million acres of farmland to black farmers over the next 10 years. None to whites. Reparations without the label. What’s next?

Racism won’t cure past racism. And it won’t unite the nation.

Voters need to wake up before the 2022 elections and remove the people who support this sort of legal inequality. This bill and those like it will only divide America.

 

 

A Serious Flaw In The Covid Relief Bill

Yesterday The Washington Times posted an article about an item that is included in the Covid Relief Bill that simply should not be there. We have learned in recent years how deep and wide the swamp  in Washington is, but this item reaches a new level.

The article reports:

President Joe Biden’s coronavirus stimulus package outlines a one-time $1,400 check to families financially affected by the virus.

Yet the fine print in the House stimulus bill sneaks in this fascinating nugget: If you’re a federal employee, you can receive $1,400 a week in paid time off for 15 weeks if you decide to stay at home and virtually school your child.

As first reported by Forbes, the carve-out is included in the bill’s $570 million “Emergency Federal Employee Leave fund,” which is exclusively reserved for federal employees.

Among those eligible are those who are “unable to work” because they are caring for school-aged children not physically in school full time “due to COVID-19 precautions[.]”

The new fund allows a federal employee “caring for a son or daughter” to qualify for the paid leave, specifically “if the school or place of care of the son or daughter has been closed, if the school of such son or daughter requires or makes optional a virtual learning instruction model or requires or makes optional a hybrid of in-person and virtual learning instruction models, or the childcare provider of such son or daughter is unavailable, due to COVID-19 precautions.”

The article continues:

Meanwhile, millions of families are trying to balance work with virtual learning and child care — with only a lousy one-time $1,400 check to help compensate them for their efforts. Yet federal government employees will be paid weekly not to work. The entire thing is insane, and another example of how the swamp takes care of its own.

As Forbes notes, the drafting of the federal employee leave fund is intentionally sloppy. It doesn’t include age requirements for the children (meaning federal employees could apply for this leave even if their children are attending college), and it also would allow for government employees to receive the benefit even if their child could be in school five days a week, but the employee chooses a virtual option instead.

The entire House stimulus bill includes no financial reimbursement for working families who have decided to place their children in private schools because their school districts are virtual, even as they continue to pay school taxes. They continue to pay for a service not being rendered — with no exact timeline of when it will be.

This is a disgrace. The small businesses that have been forced to close receive a fraction of what employees of our bloated federal government receive. That is simply wrong.

It’s Time To Return To Single-Issue Bills

Yesterday Townhall posted an article about some of the items included in the coronavirus relief bill proposed by the Democrats. The bill is 591 pages long, and needless to say, is not all relevant to coronavirus relief.

The article lists some of the items:

The 591-page document includes another round of stimulus checks. Individuals making less than $75,000 will receive a $1,400 check. Couples earning less than $150,000 will receive a combined $2,800. As an individual or couple’s income increases, their stimulus amount decreases.

Of the $1.9 trillion, $350 billion will go towards states and local governments. Unemployment benefits will provide Americans with $400 a week on top of their state-issued benefits.

Under this bill, the Paycheck Protection Program (PPP) is replenished with $7 billion in additional funding. The Emergency Injury Disaster Loan (EIDL) program will also receive $15 billion.

In addition, the bill ups the child tax credit to $3,600 for children six and under. That credit drops to $3,000 for kids ages seven to 17.

There are, however, a number of questionable liberal wishlist items in the bill. If passed and signed into law, the federal minimum wage – which currently sits at $7.25-an-hour – would increase to $15-an-hour over the next five years.

…Democrats set aside $50 million for “family planning.” As of now, the Hyde Amendment is in place, which bars taxpayer funds from being used for abortion. This, however, could set the stage for the repeal of the Hyde Amendment down the road. If this bill is passed and Congress later repeals Hyde, money that was funded in this relief bill could theoretically be used for abortion.

…Although higher education has teetered because of the virus, Howard University is the only higher education facility that would be given money to recoup funds lost during the pandemic. Gallaudet University is listed in the bill, but it’s a specialized university for students who are hard of hearing.

It is important to note that Vice President Kamala Harris is an alumna of Howard University, which is an unlikely coincidence.

…Another $135 million would be allocated for the arts and humanities, likely museums that received funding during the CARES ACT.

It is time to bring back legislation that deals with one issue at a time. Some of the items in this bill will actually do damage rather than solve problems. For instance, the $15 a hour minimum wage is likely to result in the closure of any small business that was not closed by the government shutdowns. This relief bill is looking like the Obamacare bill which became law in 2010. That law cost the Democrats their majorities in Congress. If this relief bill is passed without Republican votes, the result will probably be the same.