WASHINGTON – The non-partisan Congressional Budget Office on Thursday released its full cost estimate of President Joe Biden’s Build Back Better bill, projecting the measure would add $160 billion to the national debt over the next decade.
The CBO reported the measure would raise more than $1.2 trillion in the form of increased IRS crackdowns on tax cheats, higher taxes and other increased revenues but that overall spending on a myriad of social and climate priorities would lead to a net cost. Projections for the time period 2022-2031 show that the projected expenses will outweigh the revenues by $367B. But that increased IRS enforcement could bring in $207B, which would leave a deficit of approximately $160B.
The release of the CBO data is important to the House’s vote on the measure, a massive package of Democratic social spending priorities, including free preschool, climate change initiatives and Affordable housing expansion. A vote could be held as soon as tonight, now that the estimate has been released.
The cost projection undercuts Biden’s long-standing pledge the bill is not only fully paid for but would decrease the deficit.
The CBO is an independent, nonpartisan referee that analyzes the budgetary impact of proposed legislation. This independent, nonpartisan referee was founded by Congress in 1974.
CBO provided a breakdown of costs for each House committee that was responsible for a specific section of the bill. Education and Labor (454.1 billion), Energy and Commerce (2281.5 billion), Financial Services (150.7 billion) and Judiciary (15.1 billion) were some of the most significant areas.
CBO projected that the additional revenue generated by IRS enforcement would be approximately $207 billion. This is less than half of the $450 billion estimated by the White House.
“The CBO score did not turn out well for this legislation,” said Oklahoma Rep. Tom Cole, the top Republican on the House Rules Committee.
The administration stated that the bill would be paid in full despite the CBO score. White House deputy communications director Kate Berner stated in an interview that the bill will be fully paid for. Tweet This legislation would lower the deficit by $100 Billion over 10 years.
How did this happen? CBO projects that BBB would add $367.1B in deficit. That doesn’t include revenue collected from tax enforcement. Treasury expects $479.6 from tax enforcement. So… $112.5B in deficit reduction,” read Berner’s tweet.
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But Rules Committee Chairman James McGovern, D-Mass., said Democrats were still working to come up with ways of keeping the measure from adding to the national debt.
“I do believe this bill will be fully paid for,” he said.
House Democrats want to pass the bill Thursday and send it to the Senate, but centrists have held up a vote on the measure because they They demanded that the CBO estimate was first. Moderates have been worried about the scope of the bill and its potential addition to the national debt – even beyond the coming decade – issues Republican challengers are expected to raise against Democratic incumbents during next year’s mid-term elections.
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According to CBO, this bill will increase Social Security costs by $121.7 billion in the following 10 years. The agency stated that the bill would have a significant impact on the budget, with a rise in the overall deficit to $369 billion by 2032-2041.
A small group of moderates prevented the bill from being put to a vote early this month. They said it was irresponsible not to have the score (or estimate) before it came up for vote. Five moderates addressed Nancy Pelosi and stated that their delay was necessary to “ensure fiscal responsibility” of the final bill.
Although it’s unclear how these moderates will vote now that the estimate is out, Democratic leaders are confident they can win their support.
A recent analysis from the nonpartisan Joint Committee on Taxation found the Build Back Better Act would raise $1.48 trillion in revenue over a decade and also said the plan would be unlikely to add to the deficit long term.
If the House approves the bill, the Senate would. There, two moderate Democratic legislators, Joe Manchin (West Virginia) and Kyrsten Senema (Arizona), have succeeded in convincing Democrats to lower the bill’s initial $3.5 billion figure. Manchin and Sinema had objected not only to the scale of the Build Back Better plan but also to certain provisions related to the energy industry, prescription drug pricing, and taxes. The House may not support this version.
Sinema and Manchin are crucial to final passage of the bill because Democrats are trying to pass the legislation without any Republican support. They’re using a process called reconciliation, which would bypass a potential filibuster in the Senate, but would require the backing of all 50 Senate Democrats and then the tie-breaking vote cast by Vice President Kamala Harris who acts as Senate president.
In the closely divided House, the bill would fail if more than three Democrats break rans and oppose the bill.