The Congressional Budget Office said on Thursday that the House Democratic version of President Joe Biden’s climate and social spending legislation would increase federal deficits by $367 billion over the next decade.
The much-anticipated score could further imperil passage of the legislation as it is currently written, given that some centrist Democrats such as Sen. Joe Manchin of West Virginia have pushed back on the notion of adding to the debt. Still, it is not as bad as some in the Biden administration had reportedly feared, and paved the way for the House of Representatives to move Thursday night to pass the legislation.
Notably, the CBO’s bottom-line estimate of the effects of the bill on the deficit does not include revenues from the Democratic proposal to increase funding for IRS enforcement. The budget office separately estimated that the IRS provision would bring in $207 billion in revenues over 10 years. The Treasury Department has said that the provision would yield $400 billion.
“The combination of CBO’s scores over the last week, the Joint Committee on Taxation estimates, and Treasury analysis, make it clear that Build Back Better is fully paid for, and in fact will reduce our nation’s debt over time,” Treasury Secretary Janet Yellen said in a statement Thursday evening.
House Speaker Nancy Pelosi had moved to vote on the legislation Thursday evening, before the CBO score was published. She said her caucus had been awaiting the CBO score prior to any vote.
COST OF DEMOCRATIC SPENDING BILL WOULD DOUBLE IF TEMPORARY PROVISIONS EXTENDED, BUDGET WATCHDOG SAYS
Democrats and Biden have marketed the plan as completely paid for because of its tax offsets, but the new numbers from the score cast doubt on that contention.
“CBO has confirmed that this bill is not fully paid for, despite promises from President Biden and Congressional Democrats that it would be,” said Rep. Jason Smith of Missouri, the top Republican on the House Budget Committee.
Republicans and some economists have also panned the Democratic plan as being riddled with budget gimmicks to make it appear to cost less. The current plan has several spending provisions that sunset early that would add to the deficit greatly if they were made permanent, as Democrats intend them to be.
While the CBO didn’t score the plan with the extended provisions, the Wharton School at the University of Pennsylvania released a report that pegged the final cost as much higher, $4.6 trillion over 10 years, with the extensions included. The Committee for a Responsible Federal Budget, an advocate of lower deficits, said Monday that the cost of the bill over 10 years with all temporary provisions made permanent would be $4.9 trillion.
Manchin has been wary of adding to the federal debt. He has also expressed concerns that infusing the economy with more federal spending after the $1.9 trillion coronavirus relief package and $1.2 trillion bipartisan infrastructure plan could further increase inflation, which is clocking in at 6.2% for the year ending in October.
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“I will not support a bill that is this consequential without thoroughly understanding the impact that it will have on our national debt, our economy, and, most importantly, all of our American people,” Manchin said earlier this month.
Due to the party’s tight House majority, Democrats can only afford to lose three votes to pass the new spending package. The Senate is an even heavier lift, as Democrats can’t afford to lose even a single vote if they want the legislation to wind up on Biden’s desk.
