Provisions included in the Build Back Better social spending package could add as much as $3 trillion to the federal debt over ten years if made permanent, an analysis by the Congressional Budget Office (CBO) found.
South Carolina Sen. Lindsey Graham and Missouri Rep. Jason Smith, the Republican ranking members on the Senate and House Budget committees, requested the updated scores out of concern that programs listed as temporary in the Build Back Better Act will be funded throughout the ten-year period assumed by the CBO in its analyses. Many Republicans have argued that programs such as a Child Tax Credit and universal preschool and childcare will be permanently funded by Congress, even though the Build Back Better Act does not currently fund them permanently.
Many Democrats, including putative moderates like Colorado Sen. Michael Bennet, have called for a permanent child tax credit.
CBO and the Joint Committee on Taxation project the budgetary effects, including the effects on interest costs, of a modified version of H.R. 5376, the Build Back Better Act, that would make various policies permanent rather than temporary. https://t.co/PFScfS5sAl
— U.S. CBO (@USCBO) December 10, 2021
Democratic West Virginia Sen. Joe Manchin, who has not pledged to vote for the final bill, has derided those strategies as “budget gimmicks” and “shell games” to keep the apparent debt impact of the package low.
An initial CBO analysis found that the Build Back Better Act as written would add $367 billion to the federal debt. The CBO did not score an Internal Revenue Service funding mechanism, although it separately found that increased tax enforcement could lower the debt impact by up to $207 billion over the ten-year period. The new CBO estimate is the same as one provided by the non-partisan Committee for a Responsible Federal Budget (CRFB) shortly after the House unveiled the full Build Back Better Act. (RELATED: House Begins Debate Over Biden’s $2.4 Trillion Spending Package Without Knowing How It’s Going To Be Fully Paid For)
“The largest difference between the two estimates stems from an increase in the child tax credit that ends after 2022 in the House-passed version of the bill,” CBO Director Philip Swagel wrote to Graham and Smith.
Top Democrats, including President Joe Biden and Speaker of the House Nancy Pelosi, have argued that the Build Back Better Act is fully paid for and will not impact the federal debt. Treasury Secretary Janet Yellen submitted a memo to senators on Thursday repeating those claims, which were rebutted by economists across the political spectrum before the new analysis was released.
“This analysis is of a bill that the House did not pass, the Senate is not considering, and the President—who has committed to paying for permanent investment—would not sign,” she wrote.
