Analysts tasked with sorting through President Biden’s massive $1.8 trillion American Families Plan predict that over 21 million Americans would be added to federal welfare programs as a result.
Hoover Institution fellows Daniel Heil and John F. Cogan offered an explanation of the official analysis for the Wall Street Journal, revealing that Biden’s massive spending initiative would dramatically expand the welfare state.
They appropriately name the federal entitlement system “the largest money-shuffling machine in human history,” and then warn that Biden is about to dramatically inflate it. As the plan is currently written, they warn, over half of current working-age households would be eligible for entitlement programs.
The analysts point out something else too, probably just a boneheaded oversight of the utopian authors of the bill, the generous welfare handouts would be given primarily to middle-income and high-income households, including those bringing in six figures.
Federal cash assistance for daycare services would be offered to parents making as much as $130,000, households that bring in over $200,000 would still be eligible for subsidies on their health insurance, and the plan also has no income limit placed on services such as free community college and paid leave.
Handouts would be given to 57% of all married-couple households with children, and 80% of single-parent households. Analysis also reveals that there are several “gimmicks” tucked away in the legislation that hide the true cost of the proposals. In total, the report forecasts that an additional $1 trillion would be added to the federal deficit in the coming decade.
Many economists have expressed concerns about the massive American Families Plan. The Penn Wharton Budget Model group, a nonpartisan think tank from University of Pennsylvania’s Wharton School who is tasked with examining the impact of major legislation such as this, came to the conclusion that economic growth would be negatively impacted by the spending proposal.
The increased taxes against wealthy Americans, additional federal expenditures and borrowing of money is anticipated to cut GDP by 0.4% over the next 30 years, with more severe consequences for capital stock, expected to drop by 1.2% over the same period.
The American Families Plan is bad for the country, and the proof is written on the wall. But economic concerns are always second-place to ideologues who are bringing us toward a grand socialist utopia.
Author: Joyce Spencer