Democrats’ lavish COVID-era “stimulus” slowed the economy, made the labor shortage worse, and sent prices growing three times faster than paychecks from inflation, said Republican Leader of the Ways and Means Committee Rep. Kevin Brady (R-TX) on National Review’s “Capital Record” podcast.
In a conversation with “Capital Record” host David Bahnsen, Rep. Brady also warned that growth for workers and small businesses from Republican tax reform are being wiped out by Democrats’ spending and tax hikes which have the economy headed towards a recession.
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Asked about economic growth after the pandemic, Rep. Brady said he was disappointed:
“Most economists believed 2021 would be a record year, because there were so many advantages heading into it. We had a much faster recovery from COVID than anyone expected under President Trump. We had trillions of stimulus out there, life-saving vaccines, and regions finally reopening.
“But unfortunately we’ve seen some really bad economic policies. Job growth has fallen far short of what’s expected. As you know, we’ve seen raging inflation that’s getting worse and this crippling worker shortage is really contributing as well to both inflation and slower growth.”
Rep. Brady added he hasn’t seen an effort by the Administration to address the worker shortage:
“We saw very lavish, Affordable Care Act subsidies, and universal child care for the jobless. I don’t think there’s any question: all those policies contributed to the labor shortage. And right now, I’ve just not seen any interest from the Administration in addressing that worker shortage. If anything, in Build Back Better even in the slimmed down versions, they continue some of those policies.”
Rep. Brady warned that inflation is wiping out American workers’ wages and has the U.S. at a risk of recession:
“Right now, prices are growing three times faster than paychecks. Think about that: three times. And it’s accelerating. A family in the U.S. – two workers – are paying about $5,700 more today to buy the same products. That’s pretty crushing.
“And then we saw on businesses, their wholesale prices are double digit inflation over eleven percent. That’s going to land in higher prices as well. Americans are bracing for even higher inflation ahead. I think, David, we are clearly in a wage-price spiral. It’s something no country wants to be in because it always ends in a recession.”
Asked about whether he’s concerned that inflation points to slow growth ahead for the economy, Rep. Brady said:
“You know, the short answer is yes. And nearly everyone is concerned about growth. When we reformed the tax code, it made us more competitive, lowered taxes, and paired that with more balanced regulation, we saw economic growth and societal growth – especially for people of color and the lowest skilled – we saw all of that.
“A lot of those policies are being reversed or at least attempted to be reversed. So there are real concerns about growth ahead. Growth is slowing. I think the chances for a recession are growing each month, unfortunately.”
Asked what can be done to get the economy back on track, Rep. Brady said:
“I think part of the solution to inflation has to be to stop the COVID-era programs. Don’t let them get put in the budget so that they grow to unimaginable amounts later on.
“As long as the President keeps going after Main Street businesses and high earners, he’s actually targeting those most likely to invest into our economy. They’re in new ventures, investing in new technology, new innovation, and in the supply chain. So I think if any of those policies get through, we’re going to have an even more dramatic effect on growth going forward.”