Biden’s Build Back Better Promised To Not Cost A Thing….Has A $367B Price Tag On Fed Debt

Biden’s Build Back Better Promised To Not Cost A Thing….Has A $367B Price Tag On Fed Debt

According to the impartial Congressional Budget Office, the upcoming Build Back Better Act would add $367 billion to the federal debt by 2031 if it passes as currently written.

The proposal, which was approved by the House of Representatives on Friday, will spend $1.75 trillion on a variety of social programs, including universal preschool, childcare subsidies, and climate change efforts, among others. Moderate Democrats were said to be holding off on supporting the package until they evaluated the Congressional Budget Office’s analysis, which was issued on Thursday afternoon.

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[The Wall Street Journal] The CBO found that the bill would contribute $367 billion to the deficit over 10 years; Democrats have argued that revenue not captured in the CBO score shows that the bill is more than fully paid for.

For technical reasons, the CBO’s bottom line doesn’t include $207 billion in revenue that the scorekeeper estimates would result from pouring roughly $80 billion into tax-enforcement efforts at the Internal Revenue Service. Adding that revenue to the CBO’s other estimates would make the bill’s 10-year deficit about $160 billion. The Biden administration says its IRS spending would generate $480 billion, not $207 billion; in its view, that would tip the bill over to reducing the deficit, and many Democrats appear willing to accept that perspective.

Treasury Secretary Janet Yellen welcomed the CBO’s analysis. Noting that the Treasury Department estimates that the crackdown on tax evaders would raise $400 billion, she said in a statement that the combined CBO score, Joint Committee on Taxation estimates and her own department’s analysis “make it clear that Build Back Better is fully paid for, and in fact will reduce our nation’s debt over time by generating more than $2 trillion through reforms that ask the wealthiest Americans and large corporations to pay their fair share.”

It is estimated that the legislation’s actual cost may be $4.9 trillion, according to a study by the Committee for a Responsible Federal Budget.

Additionally, the bill would extend the American Rescue Plan’s Child Tax Credit and Earned Income Tax Credit expansion for a year, set universal pre-K and child care subsidies to expire after six years, make Affordable Care Act expansions available through 2025, and delay the requirement that businesses amortize research and experimentation costs until 2026, among other provisions.

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A new research estimates that extending the Build Back Better Act’s expiring provisions will cost more than $2.5 trillion, bringing the bill’s total cost of permanent extension to more than $4.9 trillion.

A few government officials have claimed that the Build Back Better Act will help to alleviate the impacts of rising inflation. According to White House Press Secretary Jen Psaki, “economists across the board also agree that the president’s economic agenda—the Bipartisan Infrastructure Bill that he will sign on Monday and the Build Back Better Bill that we’re working to move forward—will not add to inflationary… pressure, and will ease inflationary pressure over the long term.”

 

 

 




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