Tipsheet

PA Democratic Congressman Running for Senate Says the Quiet Part Out Loud About Democrats' Spending Agenda

This article has been updated to reflect a statement from Jeff Bartos, who is running for the U.S. Senate as a Republican. 

Recently, Rep. Conor Lamb (D-PA), who is considered one of the more moderate Democrats, made quite the admittance when it comes to President Joe Biden's reconciliation spending bill. Also known as Build Back Better, it is a huge part of the president's agenda. 

The congressman, as Emily Brooks with the Washington Examiner reported, said during a virtual meet and greet with northwestern Pennsylvania Democrats on October 27 that if they "want to propose a lot of new spending and adventurous new government programs in our party, we have to have the confidence to ask... the middle class and people like that to contribute to it." 

As Lamb's Campaign Manager Abby Nassif-Murphy said in a statement to the Washington Examiner, though, "Conor Lamb has not proposed and would not vote for a tax increase on the middle class. In fact, this year he voted for the largest middle-class tax cut in a generation, the Child Tax Credit, which every single House Republican voted against."

The White House has tried to claim that the Build Back Better agenda will be paid for by wealthy Americans and corporations paying "their fair share." The Congressional Budget Office (CBO) has yet to score the bill, which is why certain moderate Democrats were hesitant to be willing to vote for the bill last Friday.

While the House did vote on and pass the $1.2 trillion infrastructure bill late on Friday night, thanks to 13 Republicans voting in favor of it, the reconciliation spending bill will have to wait until later this month. The House soon after passed a procedural rule dictating that that bill will also receive a vote.

During the virtual meeting, though, Lamb had also pointed out that the contributions from wealthy Americans won't be enough. He had been asked about his support for a flat tax, which the congressman said would not work on the federal level, because it would not raise enough money to run the government.

"Some of the focus on the billionaires and the ultra-wealthy that people are putting in the news right now — it’s fine, it’s valid, it’s not enough to fund everything we want to do," the congressman responded. "So, it’s a little bit of a convenient escape hatch for some Democrats, honestly, to say, 'Oh we can just, you know, raise taxes on billionaires.' Well, the combined cost of everything that Democrats are proposing to do right now goes far beyond what billionaires are ever going to realistically pay."

The congressman, went on to make another point about the reality of the cost of all these spending projects that Democrats have come up with.

"To a certain extent, it reflects a little bit of a lack of confidence among our leadership that you really can do all of these different things that they promised at once. And it might caution for doing a few things extremely well, selling the public and convincing the public on the ability to do them well, so that it is easier in the future to get them to trust and invest in the government that ... is supposed to be serving them," Rep. Lamb added.

While the congressman has campaigned on supporting a tax cut for the middle-class, his response is something worthwhile for Democrats to think about when it comes to the cost of their ambitious projects. 

Fellow senatorial candidate Jeff Bartos, who was the Republican nominee for lieutenant governor of Pennsylvania in 2018, found Lamb's admittance to be quite telling. "Conor Lamb acknowledges that Democrats' tax-and-spending spree will require tax hikes 'far beyond what billionaires are ever going to realistically pay.' Make no mistake, Democrats will raise taxes on the middle class," Bartos said in a statement. 

On the campaign trail Joe Biden often claimed that he would not raise taxes on anyone making more than $400,000. His administration continues to stand by that. In March, though, as Katie reported, White House Press Secretary Jen Psaki clarified that this applies to family rather than individual income.

Americans of all income levels are nevertheless suffering the cost of heavy inflation, as Katie also pointed out

In an October 21 column for Townhall, Donald Losman and Maroun Medlej explained that ordinary Americans end up also having to pay the corporate tax:

First, higher corporate taxes mean reduced net corporate income. When companies have lower after-tax income, their stock prices tend to weaken. Since more than fifty percent of U.S. households own equities, either directly or through pension plans, falling stock prices reduce household wealth. Second, with less after-tax income, corporate adjustments are likely to include dividend reductions, another ‘hit’ on the average American. 

Third, reduced corporate retained earnings may be reflected in lower wages (from what they could be) for their employees. According to one study, the “ultimate effect of Biden’s campaign-promised tax increases would be real wages and real incomes that are 3 percent to 4 percent lower.” A European analysis found that for each additional Euro raised via corporate taxes wages would fall by 65 cents. Further, lower retained earnings are likely to reduce corporate investment, a critical backbone of the economy as well as an important source of productivity gains. Fifth, new jobs in the construction and producer durables sectors, which in part depend upon business investment, will also suffer. Sixth, such taxes are likely to lead to employee layoffs. Seventh, higher corporate taxes place our exporting businesses at a meaningful disadvantage in international competition. This too is likely to further reduce corporate income, equity prices, employment levels, and wages. Further, it is likely to drive some corporations to shift profits overseas. Finally, to the degree that they can, businesses will compensate by raising their prices, thus reducing the real wage of those purchasing their products. It also merits note that a 28 percent federal rate coupled with state taxes would lift our combined corporate rate to 32+ percent, very significantly higher than the global average of 23.79%. 

Rep. Lamb is one of the many candidates running to replace outgoing Sen. Pat Toomey (R-PA) who has announced he is retiring. Ballotpedia lists close to 30 people who have declared their candidacy.