Kudlow gives his thoughts on Biden's spending plan

Kudlow breaks down the real cost of the bill

What I'm hearing from my moles on the Hill is that the House Budget Committee marked up a $4.3 trillion reconciliation bill by including the marks from the other stakeholder committees.  

That's all that was—no policy analysis and certainly no open, public hearing about the policies. So, that's $4.3 trillion, but we don't know whether they're scoring entitlements, for example, over three years or five years or 10 years.  

So, this is not a gimmick-free total, but it is higher than $3.5 trillion. 

Then, I'm told House leaders will meet with Senate leaders and try to come up with some kind of compromise that will pass both houses.  

Insiders tell me Joe Manchin is going to have a seat at that table. It's mostly going to be leadership people, not budget people. So, we'll see. 

Some additional thoughts: The inside betting is there's no way the Senate-House reconciliation discussion is going to be resolved this week. No way! 

So, that means Speaker Pelosi may not make good on her promise to so-called House moderates to pass the infrastructure bill Thursday. 

They could, but there will be loud yapping from the far-left progressives about all of their government welfare programs, which, of course, have no workfare or education requirements.  

So, I’d say the speaker's got a problem. I’d also say that she's a tough infighter who won't vote on anything until she has the votes on the floor to win—so stay tuned. 

Meanwhile, some basic arithmetic.  

Joe Manchin is at $1 - $1.5 trillion on the spending side, so he's said publicly—which, correct me if I’m wrong, but that's way lower than the $3.5 trillion media bill and still way, way lower than the $4.3 trillion coming out of the House Budget Committee. 

Just saying, looks like a problem to me. You know, folks, I’m really good with these problems because I don't want any of it to pass.  

Save America. Kill the bill. 

Then there is one of Joe Biden’s big lies— that none of this will cost anything. Remember that from his presser on Friday?  Madame Psaki doubled-down on it today. 

The Joint Tax Committee has priced 40-plus tax hikes at $2 trillion in revenues, but now we have another arithmetic problem. 

Besides the Manchin problem, $2 trillion in revenues is lower than $3.5 trillion in the media spending bill and lower still than the $4.3 trillion from the House Budget Committee. 

So, besides Mr. Biden’s big lie about no cost, I would suggest there's no pay-for, even in the D.C. swamp's terms.  

Now, mind you, I don't want a nickel higher in revenues. In fact, the Laffer curve shows that rising taxes block incentives and will depress the economy.  

So, all these tax hikes are going to yield far fewer revenues than government static analysis predicts, but there's yet another angle in this wonderful story. 

On Friday, Senator Sinema told a local Arizona newspaper that she opposes the corporate income tax hike. She also opposes raising the personal income tax. Now, that is my kind of gal and I don't know what the Democratic leaders think they're going to do with her. 

In fact, it's kind of a dynamic duo. Manchin doesn't want to spend and Sinema doesn't want to tax. Now, that's like the Democratic Party of John F. Kennedy or even Bill Clinton’s second term—rather than today's woke'd-up class warfare, hate business and investment, big government, socialist Dems.  

Finally, just one last word on revenues. Our pal, Dan Clifton, has a report out that shows federal tax revenues are booming—booming! As a share of GDP, federal tax revenues through q2 are 19.3% of GDP. That is nearly the all-time high of the past 61 years. 

The average federal tax revenue grab of GDP during that whole period from 1960 to today is 16.9% of GDP. So, you think 19.3% is enough to give Uncle Sam? A cat's whisker from the all-time high share of the economy? Coming from your pockets and mine? 

I think so.  

The problem here is spending, not revenues. 

I’m going to make one last point because I nearly forgot it. The $1.2 trillion infrastructure bill from the Senate has a $250 billion-something deficit.  


In other words, the pay-fors did not pay-for. Listen folks, this is your Washington. You voted for him, I didn't.  

How do you say it? "You reap what you sow" or "you make your bed, you have to sleep in it" or just buyer’s remorse.  

Enough already. That's my riff tonight.