[Congressional Record Volume 168, Number 115 (Wednesday, July 13, 2022)]
[Senate]
[Pages S3247-S3248]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Inflation

  Mr. THUNE. Mr. President, inflation numbers came out this morning, 
and, once again, they were not good. Inflation in June was 9.1 
percent--9.1 percent, the highest level since November of 1981.
  Groceries are up 12 percent, on average. Baby food is up 14 percent, 
milk up 16 percent. Chicken is up 18 percent. And the list goes on. 
Household cleaning products are up 11 percent. Gas prices are up nearly 
60 percent. Furniture and bedding are up 13 percent. Utility gas 
service is up 38 percent. Health insurance is up 17 percent and on and 
on and on.
  Everywhere Americans look, they are facing price increases, price 
increases on the most essential items: groceries, gas, their utility 
bills. And on top of all this, real average hourly earnings are 
currently declining at the fastest pace in 40 years. Fifty-eight 
percent of Americans are living paycheck to paycheck. Price increases 
on the most essential items--groceries, gas, their utility bills--all 
these things are forcing Americans to dig into their savings, when they 
have them, to try and make ends meet.
  Others are relying on things like credit cards or visits to food 
banks. Demand for food assistance has soared in recent months. One 
organization in my hometown in South Dakota received 600 more calls for 
food assistance in May of this year than it had received in the same 
month a year ago. Food banks often have fewer resources to meet the 
need, thanks to declines in donations and the high price of groceries. 
And there is no end to this pain in sight.
  A recent Joint Economic Committee analysis found that inflation will 
cost the average household $7,620 over the next year or $635 per 
month--$635 per month. That is an unsustainable burden for working 
families.
  By now, most Americans are familiar with how we got here. When 
President Biden took office, inflation was at 1.4 percent, well within 
the Fed's target inflation rate of 2 percent. And it might have stayed 
there had Democrats not decided to pass a massive and

[[Page S3248]]

partisan $1.9 trillion spending spree under the guise of COVID relief, 
mere weeks--mere weeks--after Congress had passed a fifth bipartisan 
COVID bill that met essentially all current pressing COVID needs.
  The Democrats' so-called American Rescue Plan sent a lot of 
unnecessary government money into the economy, and the economy 
overheated as a result. You don't have to take my word for that on the 
damaging effects of this legislation. Here is what one Democratic 
economist who worked in the Obama administration had to say on the 
subject:

       The $1.9 trillion American Rescue Plan passed in the early 
     days of the Biden administration will go down in history as 
     an extraordinary policy mistake.

  Another former Obama adviser noted:

       The original sin was an oversized American Rescue Plan. It 
     contributed to both higher output but also higher prices.

  Those are warnings that came from Democrats that their so-called 
American Rescue Plan ran the risk of overheating the economy, but 
Democrats here in Congress passed it anyway. The President signed it.
  What is also worse is that even after they saw the inflation that 
resulted from their $1.9 trillion boondoggle, they spent months last 
year trying to double down on the reckless spending that helped cause 
so much inflation in the first place. Even as inflation was steadily 
increasing, Democrats spent months working to pass their so-called 
Build Back Better bill--a multitrillion-dollar--trillion-dollar--
reckless tax-and-spending spree that would have dumped more unnecessary 
government money into an already overheated economy. But, fortunately, 
their efforts ultimately failed last December.
  But like a zombie, Democrats' Build Back Better tax-and-spending 
spree just keeps coming back from the dead. That is right. Despite the 
fact that our inflation crisis is even worse--worse now than it was 
last fall--Democrats are once again considering a version of their 
Build Back Better tax-and-spending spree. We don't know all the details 
yet, but what we do know--what we do know--is cause for alarm.
  Democrats are planning to raise taxes by a trillion dollars--$1 
trillion--and a substantial part of that tax increase would come in the 
form of new taxes on small businesses. That is right, on small 
individually and family-owned businesses or what are often called 
passthrough businesses; in other words, Main Street America, the 
businesses that create jobs.
  In South Dakota, passthroughs, such as sole proprietorships, S 
corporations, and partnerships, employ an estimated 68 percent of the 
private sector and represent almost 100 percent--99 percent or 
thereabouts--of all businesses in my home State of South Dakota. 
Nationwide, more than 90 percent of American businesses are 
passthroughs, and these businesses employ tens of millions of 
Americans.
  Small business owners' expectations for better business conditions 
recently hit an alltime low. Business owners are struggling with the 
high cost of everything, from inputs to electricity, as inflation 
continues to soar and global supply chains continue to be sluggish.
  I recently read a comment from one small business owner in South 
Dakota who noted:

       It's hard when you're working so hard but you're not making 
     money. . . . We are right there right now.

  ``It's hard when you are working so hard but you're not making 
money.'' Yes, it is.
  And if Democrats have their way, life for small business owners--and 
their employees--is going to get even harder because raising taxes on 
businesses will lead to a combination of lower wages for workers, lower 
returns for business owners, and higher prices for goods and services. 
It is just intuitive.
  Think about it. If you are a small business owner, you are paying 
more for inputs and all the supplies that you need to run your 
business, and then government says: Oh, we are going to hand you a big, 
fat tax increase on top of that, what happens? Well, you can take lower 
profits--and some of them certainly, I am sure, will, but inevitably 
that gets passed on in the form of higher cost to the consumers, to the 
people they serve, their customers, or in the form of lower wages to 
their employees. That is what it is going to do. It will also make it 
more challenging for small business owners to reinvest in and grow 
their businesses.
  As I said, altogether, Democrats are contemplating raising taxes by 
$1 trillion in their new Build Back Better tax-and-spending spree. And 
those tax hikes and their economic impacts are not going to be limited 
to small businesses, nor are they going to be limited to families 
bringing home more than $400,000, despite the fact that the President 
has repeatedly pledged not to raise taxes on families making less than 
that.
  The nonpartisan Joint Committee on Taxation studied the tax-and-spend 
provisions that Democrats are discussing, and its analysis shows that 
lower and middle-income taxpayers will face significant hits from the 
proposed tax hikes.
  The Joint Committee on Taxation analysis--again, bipartisan, 
nonpartisan organization studies the implications of taxing-and-
spending provisions on our economy and on classes of different people 
in this country--that JCT analysis found that more than half of 
Americans earning between $100,000 and $200,000 would see a tax hike 
next year as well as a quarter of Americans making between $75,000 and 
$100,000 a year.
  Raising taxes on small businesses, including passthroughs in South 
Dakota and across this country, is a reckless--reckless--approach to 
the economy.
  Mr. President, we have an economy that is wobbling. I just mentioned 
that the inflation numbers are historic: 9.1 percent. We haven't seen 
that kind of inflation since 1981, back when I was in college.
  We have an economy that some argue is already in a recession, 
depending on what ultimately the numbers are for the second quarter of 
this year. But some people--economists--are expecting negative GDP 
growth for the second quarter, which, by the clinical, technical 
definition, would put the country already into a recession. But most 
economists and people who study this suggest that there is certainly a 
likelihood of a recession within the next year.
  So we have the prospect of a recession. We are looking down at the 
possibility of record inflation, coupled with a recession, and what do 
the Democrats want to do? Raise taxes. Raise taxes and grow government. 
Spend more. Flood the zone with more spending. Hit businesses with 
higher taxes, which will get passed on in the form of lower wages and 
higher prices.
  So the Democrats apparently are content with the idea of a recession. 
They almost want to seem to guarantee that we want to get there, and I 
am at a loss to understand any other reason why they would be 
contemplating increasing the tax burden on small businesses and middle-
class Americans during an inflation crisis.
  Mr. President, Democrats tried their hardest last fall to double down 
on the spending strategy that helped plunge us into this inflation 
crisis in the first place. Mercifully--and I say ``mercifully,'' and I 
thank God for a couple of discerning Democrats who saw otherwise--
mercifully, they failed.
  Let's hope that common sense will once again prevail and the 
Democrats' latest reckless tax-and-spending proposal will come to 
nothing. American families are already suffering. They should not--
not--have to deal with the economic consequences of yet another ill-
advised piece of Democratic legislation.
  I yield the floor.
  The PRESIDING OFFICER. The gentleman from Texas.