Inflation has come down a bit, as the Federal Reserve tightening policies are taking hold. And Fed head Jay Powell told us today the central bank will be unrelenting in its inflation fight to get 7 percent inflation down to its 2 percent target.  

Unfortunately, the Fed essentially signaled its expectation that continued rate hikes and money supply crunching will generate a recession next year. They think the unemployment rate is going up a percentage point. You know, there might be a better way.  

Remember, Milton Freidman defined inflation as too much money chasing too few goods?  Ok, the Fed is doing its job now absorbing excess money. But, what about the ‘too few goods’ part?  

Suppose we could get policies to foster limited government, lower spending, reduced tax rates, lighten regulation, and re-open the oil and gas spigots. In other words, create fresh new incentives to work, produce, and invest. Think of it.  

Yet this free market policy mix is not happening, at least not yet. The retiring lame ducks in the Senate are quacking up a big spending bill. That means more deficits, more borrowing, and no free market incentives.  

Who are the quacking ducks? Well, Senators Shelby and Leahy.  And they’re going to generate at least a $2 trillion Omnibus bill, but that could be even bigger when it’s all said and done.  

You’ve got 4 or 5 people in a dark smoky room making decisions, not only for the rest of our elected representatives, but also for 350 million Americans.  If that doesn’t seem fair — you’re right, it’s not fair. Nor is it going to make the economy growthier.  

And if this stuff goes through, it might increase the inflation rate next year, which might lead the Fed to be even more restrictive, and hand 350 million Americans an even deeper recession. This omnibus stuff is bad, bad policy.  

By the way, the dreaded earmarks are back with bipartisan support, and the Omnibus looks like it’ll have 7,500 special interest pork barrel earmarks totaling $16 billion.  

Incidentally, Mr. Shelby is the batting average leader for earmarks, totaling $656 million. He’s the MVP of special interest spending. Now, consider this. There is another way. My pal Steve Moore argues for implementing the 2010 pay-go budget caps.  

The omnibus would avoid the caps, which has become a congressional habit, but if the caps were enforced it would cut roughly $130 billion in spending through across the board automatic budget cuts called ‘sequestration.’  

You could get rid of the $80 billion for 87,000 new IRS agents. You could claw back unspent Covid money. And you know what? It would only require 41 Republican votes in the Senate. Because you need 60 votes to waive the caps.  

The GOP could just say ‘no’ to extravagant spending, higher inflation, and recession. Just say ‘no’ — 41 Republicans senators is all we need. Save America. Kill the omnibus. 

From Mr. Kudlow’s Broadcast on Fox Business Network.