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Floor Speech

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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 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.

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