BUCK: Clay, I want you to tell me what this turns into for the GOP. The senators… This just broke in the last hour. “Key senators,” here according to CNBC, “have announced they’ve reached a bipartisan infrastructure deal. It’s unclear if the plan had enough votes to pass.” Chuck Schumer says he’s prepared to push it through the chamber. They would need the 60 to overcome what is still a filibuster that would exist if somebody is going to exercise that.
And it’s looking like Republicans, Clay, are going to go along with this. The Democrats have wanted to, as they say, “invest” $3.5 trillion in social programs, plus something like a trillion of this is going to be actual infrastructure, and the text isn’t out yet. But it sounds like we’re just going to spend ourselves into oblivion. Is that the plan?
CLAY: While inflation is skyrocketing. And here’s my big question. And you tell me where I’m missing something, Buck. Most of the time when you agree to a compromise in legislation, the way to compromises work… By the way, I’m married for 17 years, so I also understand that all compromises (laughing) are not actual compromises. There’s a lot of married men out there.
They say, “Yeah. I’ve compromised a lot. She gets exactly what she wants. That’s how I stay married.” It feels like this is that kind of compromise for the Republican Party right now. Most political compromises, you give up something that you didn’t want to give up and you get back something that the other side did not want to give up in exchange for your compromise.
No one has been able to walk me through what the Republicans are getting from this infrastructure agreement. Let me give you a couple of examples of things that could happen. If Joe Biden said, “Hey, you know, I’ve proposed 43.4% capital gains tax,” right now, it’s 20%. So we’re talking about roughly a doubling of that capital gains tax.
“I’ll walk that back to 28% in my $3.5 trillion deal if you’ll agree to support the infrastructure bill that I want.” Okay. I could see that. If Joe Biden is walking back his corporate tax rate, if he’s walking back the overall tax increase he’s getting — and Republicans, in exchange, are saying, “Okay. We’ll support infrastructure,” the Democrats are giving the Republicans are getting and vice-versa.
But, Buck, given the fact that they are… I know this is a little bit procedural, but the Democrats are basically letting it be known that they’re going to pass their budget — this massive tax increase, the biggest tax increase that’s ever existed in the history of the country in the middle of inflation.
They are doing this with the budget reconciliation, where they get 50 votes plus Kamala Harris to break it. What are the Republicans actually getting? Have you seen something where you thought, “Oh, this is a good compromise?”
BUCK: So here’s where we are: Collins and Sinema. So the key moderate Democrat in Sinema —
CLAY: Yeah.
BUCK: — and the key moderate Republican in Collins are on board for this already. I’m hearing… I was just checking with the D.C. source. I’m hearing that it’s going to be substantially less, because remember, the text isn’t out.
CLAY: Yes, that’s right.
BUCK: This is all a horse trading behind closed doors. What they’re doing is coming out. You have a bunch of senators now high-fiving each other. “Yeeeeah, that’s right! We have a deal,” and everyone’s supposed to say, “Oh, great! Our government at work. Look at the amazing things they do.”
But a deal … that does what? They talked about the broad outlines of this, but we’re looking at federal legislation here from the Congress. Guess what? The devil is in the details. So we can’t even know exactly how much is being spent or what it’s being spent on, but as to the question about Republicans?
Look, Republicans — and some people are gonna get a little bit upset, a little bit upset with this. This is true. Republicans like to spend a lot of money too! Republican senators. Remember the Congress wants to bring back pork to their district. That hasn’t changed, and there’s no serious movement, underway, Clay, right now, to rein in spending and the debt and the deficit. There is no Tea Party, and not even the beginnings of one, today.
CLAY: Modern Monetary Theory basically teaches that deficits don’t matter, and there’s no consequences for them, and that’s the era of magical economic thinking, in which we are living right now. But have you heard though? Your point of, “Hey, there are lots of Republicans who want to be able to go back and bring the pork back to their community.”
They get a bridge, they get a new road, whatever it might be. Much of this “infrastructure,” by the way, not actually infrastructure when you actually look into the details of the legislation. But I just don’t see any horse trading, so to speak, where I feel like Republicans are getting anything out of this deal other than giving Joe Biden an opportunity in 2022, to say, “See! I told you I would bring back bipartisanship.
“Now we just need more Republicans eliminated so we can have more people who want to work and understand that importance,” and if they try to drag Joe Biden across the finished line again in 2024, I can already see what his television commercials are going to say, which is, “I made Washington work again by passing the biggest infrastructure bill in generations!”
BUCK: It’s really hard to run against Santa Claus. Republicans have learned this. Talking about the budget, looking at the math, the long-term projections, the challenges of funding Medicare and Medicaid going forward — all those things that, remember, the Republican Party of ten years ago, was very much fixated on, very much interested in.
Although we didn’t really accomplish anything in terms of… Look, we’re going to be at $30 trillion. The numbers speak for themselves. At some point, the scoreboard matters here. We’re going to be $30 trillion in national debt very soon, and so Republicans have spent. Look, under the Trump administration, we were still spending, spending, spending.
This is where we’re going now, because the free-stuff people — which you brought up MMT, Modern Monetary Theory — is the party in power or just the political party in general says, “We’re going to give you stuff, and other people are going to pay for it.” That keeps working until financial catastrophe happens —
CLAY: Brilliant.
BUCK: — until the bill comes due. So right now, it’s like both parties are on this train, throwing coal into the furnace, saying, “Let’s see where this thing ends.”
CLAY: At least if we are going to be on that train, can we not increase taxes? If we’re just going to buy into the idea that budgets don’t matter — if we’re going to do that — what is the benefit at all, of increasing taxes in the middle of a pandemic? And that’s my big thing from the get-go.
BUCK: Oh, it’s the right thing to do. As Obama would say, “It’s the right thing to do.” Remember that? It didn’t matter even if it hurt the economy. It’s about sticking it to the rich people. But as you know, it doesn’t really stick it to the rich people. For all the talk that Bernie Sanders has of (impression) “the millionaires and the billionaires and the oligarchs,” they can afford your 3% marginal rate.
They can afford to get rid of the carried-interest loophole. They can afford this stuff. It’s the small business owner who gets 150K, 250K maybe combined household income who is finally hitting their peak-earning years. They’re the ones where all of a sudden, the lack of the SALT deduction really hurts and changes their long-term outcome.
They’re the ones for whom the corporate tax rate really matters. And it’s all about the politics of envy, man. You have to tell people, “You would have more stuff…” This is what Democrats do. “Were going to give you that stuff! It’s other people’s fault you don’t have it, and we’re going to punish them for not giving it to you before.” That’s what taxes are all about.
CLAY: Sadly, that’s correct. My argument is just, “In the middle of a pandemic, how is nobody standing up and saying, ‘Increasing taxes is the wrong move at this point in time’?” It seems like madness to me.