According to an estimate of President Joe Biden’s social spending proposal, it might cost more than twice as much over the next decade as the White House claims.
According to the Congressional Budget Office, if the House Republicans’ budget proposal were to become permanent, the cost would more than quadruple, from $2.4 trillion to $4.9 trillion. To keep the topline cost artificially low, the bill uses budget gimmicks, sunset provisions, and the expiry of some tax incentives and programs.
In October, the White House announced the blueprint for the “Build Back Better Act,” including plans to offer free child care, extend Medicare and Medicaid, and combat climate change. The proposal would cost $1.85 trillion, according to the administration, and will “lower the deficit” by raising taxes on the affluent and companies.
Moreover, the plan is expected to add $200 billion to the deficit over ten years in its current form. However, that amount is based on Biden’s coronavirus stimulus package’s Child Tax Credit increase and Earned Income Tax Credit extension disappearing after one year, and other measures expiring shortly after.
According to the Committee for a Responsible Federal Budget (CRFB), Congress may decide not to extend any or all of these tax credits and subsidies. Ending them would be controversial, and MPs who support an extensive social welfare safety net would be outspoken in their opposition. A significant increase in debt would be the alternative.
According to the Center for a Responsible Federal Budget, President Joe Biden’s budget would add roughly $3 trillion to the debt if made permanent without adjustments (CRFB). To reach budget neutrality, a more critical and financially prudent proposal would not rely on gimmicks, according to CRFB.