President Biden’s tax and benefits plan received what should have been a pair of knock-out punches last weekend. The report on rising inflation has been released in full. But the media has largely ignored the second hit – the real cost of the plan if credited honestly. Allow us to complete the profile.
We’ve been telling you for months that the plan’s advertising costs are $1.75 trillion over 10 years including many budget gimmicks that hide the real costs. The Penn Wharton Budget Model has calculated the 10-year cost at about $4.6 trillion, but the White House continues to claim against all evidence that the cost is “zero.”
Now go to the Congressional Budget Office to report that the zero cost statement is a Big Number. The CBO, a political outfit of Congress, cannot be so blunt. It is constrained by budgetary conventions imposed by Congress. But even under those conventions, the CBO said the bill would add $200 billion to the deficit over 10 years.
Enter Sens. Lindsey Graham and John Cornyn, who asked CBO director Phillip Swagel to charge more for the cost of the bill just passed the House if all of its programs were made in perpetuity. This is a more honest accounting because the Democrats acknowledge that they want to spend the long-term, and they have tweaked the programs to bring them into line with the Senate budget rules so they can pass the bill. passed with just 51 votes (including Vice President Kamala Harris).
Mr Swagel’s response, sent on Friday, was a torpedo speeding towards the hull of the Build Back Better. The dishonesty in total spending of $1.75 trillion is staggering even by Congressional standards.
Take the child benefit, which Democrats say will cost just $185 billion because it ends in a year. No one believes they won’t renew it next year, and the year after that, advertising is hugely important. The CBO says the actual cost over 10 years is $1.597 trillion. Democrats also pegged the extension of their earned income tax credit at a cost of $13 billion as it also ends in a year. The CBO said the net cost was $135 billion over 10 years.
Just calculating honestly those two programs have cost 1.732 trillion dollars, or nearly all of the 1.75 trillion dollars that Senator Joe Manchin has said is the latest total spending he will support in the more than 10 years.
But there’s so much more. Democrats phase out child custody and K-money rights after 2027 at a total cost of $381 billion. The CBO says the actual cost over 10 years is $752 billion if made in perpetuity. They also underestimated the cost of expanded health care subsidies by $74 billion by phasing them out by 2025 or 2026. The CBO says the actual cost is $220 billion.
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And let’s not forget spending 10 years later when subsidies for all these new programs are ingrained in American behavior. This is the main purpose of turning these programs into benefits — to make people more dependent on the government from infancy until death.
One of the bill’s biggest tricks is to restore state and local tax withholding status to $80,000 from $10,000. Democrats pretend that this will grow by $15 billion over 10 years because the current $10,000 limit is set to expire after 2025. The CBO says the true cost of this tax deduction is for the Party. Democracy for the rich without that gimmick would be $245 billion.
We can move on, and we advise everyone to check out Mr. Swagel’s letter on the CBO website. The 18 programs Mr. Swagel listed in a table with his letter contributed $3.477 trillion over 10 years to the House bill’s total cost — compared with the $889 billion Democrats say those Similar programs have costs according to their ostentatious rules.
Overall, Mr. Swagel said in his letter, the CBO and the Joint Committee on Tax Projects that the House bill would increase the deficit by $3 trillion over 10 years with no budget gimmicks. and remove tampering.
and Chuck Schumer reacted furiously to the news, denying their claim that the Better Back Building Act was “paid in full.” Ms. Pelosi said the CBO had scored Mr. Graham’s “imaginary bill”. But her bill is real financial fantasy and “paid in full” is the lie of the year.
All of this gives Mr Manchin and other Democrats hiding behind his skepticism, an ample stockpile of ammunition to throw the whole thing off. If this bill passes, they will own all the deficits, debt, and inflation.
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https://www.wsj.com/articles/the-real-cost-of-biden-spending-plan-build-back-better-cbo-reconciliation-graham-pelosi-manchin-11639344374 The Real Cost of Biden’s Spending Plan