Republicans keep dropping hints about what they want to see happen to the economy under President Joe Biden’s leadership, but the economy doesn’t seem to be listening. Despite all their dire predictions, things are looking up, driven by continuing government COVID-19 relief and the prospect of widespread vaccinations changing the course of the pandemic.
Donald Trump’s big reelection pitch on the economy was that a Biden win would mean a major crash. “If he gets in, you will have a depression the likes of which you’ve never seen. Your 401(k)s will go to hell and it’ll be a very, very sad day for this country,” Trump said in an October debate. Republican voters responded, with their optimism about the economy crashing after Trump lost.
As Democrats pushed the American Rescue Plan, Republicans warned that it was too big and would lead to problems. “There are a lot of warning signs that have not been worrisome in the past but now are certainly blinking yellow,” Sen. Pat Toomey said on Feb. 23, cautioning against “too much liquidity going into the system.”
Now, American Rescue Plan money is flowing out into the economy, things are still going well, and Republicans are … issuing the same kind of dire warnings about Biden’s next set of plans. Spending too much could set off inflation, they say, though Federal Reserve Chair Jerome Powell (a Trump pick) says those concerns are overblown. “We’ve averaged less than 2 percent inflation for more than the last 25 years,” Powell told the Senate Banking Committee in February. “Inflation dynamics do change over time, but they don’t change on a dime.”
Republicans are also howling about the prospect of a corporate tax increase. “Why, as this country begins to reopen and recover economically, would the Biden administration be proposing tax policy which would in the end hurt the American family and millions of struggling small businesses?” Rep. Ann Wagner asked Treasury Secretary Janet Yellen during a recent House Financial Services Committee hearing, based on the theory that raising the corporate tax rate would cause prices to go up. Except that none of the Republican claims about how the Trump-era corporate tax cut would lead to increased household income panned out, so why would anyone believe the dire warnings of what would happen if less than half of the corporate income tax break was rolled back?
That corporate tax increase back to less than the rate in 2017 is planned to fund Biden’s American Jobs Plan, focused on infrastructure. Expect another round of Republican howling as Biden proposes raising the capital gains tax on people earning more than $1 million a year and returning the top marginal income tax rate to what it was before the Trump tax cuts for the rich. These moves would pay for Biden’s American Families Plan, establishing national paid leave, cutting child care costs for most families, and establishing free prekindergarten and community college. Cutting child care costs alone would help parents—mostly mothers—enter the paid workforce.
All of Biden’s moves are aimed at strengthening the working people’s economy and bringing U.S. infrastructure into the 21st century, and all Republicans want to do is predict doom because corporations and the very wealthiest individuals would have to pay a little more, money they’d be paying to invest in schools and roads and bridges and transit and drinkable water, as well as a workforce that was healthy and educated and not overburdened by trying to care for children and elders with no support. These are investments in the future of the U.S., but Republicans can’t see it because they think corporations will be able indefinitely to squeeze just a little more, just a little more out of a workforce already stretched to the breaking point and beyond. And most of all, Republicans want Biden and Democrats to fail, so that a weak economy will propel Republican wins in 2022 and 2024. They’re rooting against the United States’ economy for partisan gain, and all their predictions of economic doom are reminders of that.
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