As the Biden administration is undoubtedly beginning to understand that the plan to shove its massive $3.5 trillion spending plan through Congress by budget reconciliation on a purely partisan basis is coming unglued, the White House has taken the spin in support of the plan to all-new heights. The administration is now claiming that all of the spendings in the plan will come at no cost.
A report by Axios states that White House chief of staff Ron Klain recently stated that the “net cost of Build Back Better is zero.” According to White House official Andrew Bates, the “price tag is $0” because all spending would be paid for by “ending failed, preferential tax giveaways” for rich people and companies. Bates claimed that the plan would add “nothing” to the national debt.
The astounding claims make no sense initially because no final legislation has been agreed upon. The bill is so far removed from being completed that the Congressional Budget Office has not had enough information to evaluate its costs or how much additional tax revenue it will produce.
It is easy to see that the proposals contained in Biden’s package could cost far more than $3.5 trillion. Even if the plan does somehow raise enough new taxes to cover the new spending programs, it makes no sense to call the plan “cost-free.” The new bill will increase the burden carried by individuals and businesses in handling the actual incidence of the new taxes and regulations in the plan.
Any tax extracted by the government takes away resources that would otherwise be available to the private sector for development and investment in production. Increased government spending always creates new burdens on the economy in unpredictable ways.
If Democrats were talking about paying for the $3.5 trillion in new spending by cutting the same amount in government spending elsewhere, the argument that “zero cost” would make more sense. Of course, Democrats are not talking about cutting one cent of spending anywhere. All of the proposed new spendings will have to be extracted from the productive capacity of the American economy somewhere.
When the White House refers to any tax cut as a “giveaway,” remember that the premise is that the money belonged to the government in the first place somehow. Government has nothing to “give away” that it has not already extracted from every American worker and consumer first.