Democrats' Reckless Agenda Puts Rural America Last

KEY TAKEAWAYS

• Inflation soared to 7.9% in February, and it was even higher in regions between the coasts.
• Instead of finding ways to help families in rural communities who are struggling, Democrats continue to push their reckless spending and radical Green New Deal agenda.

Inflation in America has risen at the fastest pace in 40 years, reaching 7.9% in February. Gas prices eclipsed record highs. These and other problems created by the Biden administration’s policies are hitting rural America hard.

Inflation Rages Across America

Families have been paying more since Democrats enacted a bloated “COVID relief” law in early 2021. Democrats have tried to deflect blame for inflation and called for trillions more in spending, which would add even more inflationary pressure to the economy. Bidenflation is plaguing the entire country, but it is especially painful in the interior of the country. In the west north central region, which is made up of North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas, and Missouri, consumer prices have surged 8.2% over last year. To the south, prices are up 8.5% in the west south central region: Oklahoma, Arkansas, Texas, and Louisiana. In the mountain region, which consists of Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona, and New Mexico, inflation is an eye-popping 9.7%.

According to the Department of Labor, rural households spend more than their urban counterparts on traditional transportation and energy. People in rural areas often have to drive farther for goods and services, leaving them particularly affected by high gasoline prices. In 2015, gasoline and motor oil accounted for 5.1% of rural households’ average spending, compared to 3.6% for urban households. Utilities, fuels, and public services accounted for 8.6% of average annual expenditures for rural households versus 6.8% for urban households. In aggregate, rural households also have lower incomes than urban households, and a 2020 report from the American Council for an Energy-Efficient Economy found that low-income households generally spend more of their income on their energy bills.

Democrats’ Detachment from rural america

Democrats have spent the past year pushing their reckless tax and spending spree, showing how disconnected they are from the needs of rural Americans. They have hawked lavish electric vehicles – the average cost of which was $64,685 in February – as the “solution” for Americans feeling the pain of record high gasoline prices. Aside from the hefty price tag, there is a significant deficiency of charging infrastructure in the interior of the country. Democrats also have pitched a ploy to suspend federal excise taxes on gasoline through 2022. This could threaten important transportation infrastructure projects funded by the taxes. A 2020 study estimated there was a backlog of $211 billion in rural transportation projects across the country.

Democrats also have continued to push their radical Green New Deal energy agenda, which would send energy prices even higher and endanger the estimated 10 million jobs supported by the oil and gas industry, many of them in rural areas. After President Biden revoked the permit for the Keystone XL pipeline, he took action to ban new oil and gas leases on federal lands and waters. His administration still hasn’t held an onshore lease sale. A lack of new leases could affect revenues in the future, about half of which are paid to the states and help support basic services like K-12 education. According to the Department of the Interior, states receiving the largest resource allocations in fiscal year 2021 were New Mexico, Wyoming, Louisiana, Colorado, North Dakota, Texas, Utah, Mississippi, California, Alabama, Alaska, and Montana.

President Biden has called for taxing unrealized capital gains by doing away with the benefit of the “step-up in basis” provisions of tax law. That would mean someone inheriting a small business or family farm would owe taxes on the appreciation of its value during the former owner’s life. This could make it more difficult for a new generation of owners to continue the business. A 2020 study by Texas A&M University estimated that 98% of family farms would see a new tax liability of nearly $730,000 if the step-up in basis were eliminated.

Meanwhile, in the House-passed Reckless Tax and Spend Spree, Democrats included provisions to increase the state and local tax deduction cap to $80,000. Wealthy people in high-tax states like New York and California stand to gain the most from increasing the SALT cap, not the typical household in low-tax states like South Dakota or Wyoming.

Democrats also would like to make permanent their inflationary expansion of Affordable Care Act subsidies, which were included in their COVID-19 “relief” law – another mistargeted proposal to help higher-income people. Democrats would make permanent the Obamacare subsidy limit on income, which was originally set at 400% of the federal poverty level. This change provides massive taxpayer subsidies for wealthier people, who were previously ineligible and mostly already had insurance. As a result of their temporary subsidy blowout, the Congressional Budget Office estimates the federal government spent the majority of the subsidies’ cost on people who already had coverage, meaning the spending did not increase coverage.

Democrats claim their agenda will cut costs for things like child care. Rather than build on bipartisan support for programs like the Child Care and Development Block Grant program, Democrats want to take over child care and preschool with two new massive entitlements. Their plan would impose onerous mandates on child care providers, threatening to force small, private centers and family child care homes to shut down if they cannot afford to comply. It would jeopardize faith-based providers’ ability to participate in federal child care and preschool programs. Middle class families who make just enough to be ineligible for the subsidies could see the costs skyrocket by $13,000 for an infant in a day care center. This is hardly a help to parents looking for affordable child care or trying to keep the care they have. An August 2021 survey by the Bipartisan Policy Center found that a majority of rural parents said they or their relatives care for their child and that the parents who use formal child care prioritize factors like trust, cost, quality of workers, and program hours in choosing a provider. By restricting families’ options and driving up costs, Democrats’ one-size-fits-all policy is a losing proposition for people who need flexible solutions.

Reports suggest Democrats are scheming to resurrect their reckless tax and spend spree this spring. The left has claimed it supports investments in rural communities, but their priorities directly contradict that assertion. If Democrats are serious about helping struggling families, they should abandon their radical partisan agenda that would only make things worse.