Build Back Better was even more costly thanks to the gimmicks
The Biden administration’s Hail Mary pass – otherwise known as the Build Back Better Act – dropped like a load of bricks over the weekend, when Sen. Joe Manchin announced he could not support it.
That’s a victory for common sense, and a very rare nod to fiscal restraint. As the Committee for a Responsible Federal Budget notes, the numbers on the Biden plan were rotten to their core, thanks to the multiple budget gimmicks that hid the bill’s true costs:
Based on CBO’s score of the House-passed Build Back Better Act, this update of our prior analysis finds extensions would nearly double the cost of the bill from over $2.4 trillion to nearly $4.8 trillion. If all extensions were enacted without offsets, it would increase the deficit impact of the bill from $160 billion to $2.8 trillion.
About those gimmicks:
The Build Back Better Act relies on a number of arbitrary sunsets and expirations to lower the official cost of the bill. These include extending the American Rescue Plan’s Child Tax Credit (CTC) increase and Earned Income Tax Credit (EITC) expansion for a year, setting universal pre-K and child care subsidies to expire after six years, making the Affordable Care Act (ACA) expansions available through 2025, delaying the requirement that businesses amortize research and experimentation (R&E) costs until 2026, and setting several other provisions – including targeted tax credits, increased Pell Grants, and school lunch programs – to expire prematurely.
The assumption being that future Congresses and presidents will never allow these goodies to expire. To keep them alive, however, will require even more budget offsets – either new taxes, spending reductions in other programs, or both.
But not for several years. By then, people will have forgotten the original promises and costs, and happily accept even more government spending. That’s how a nation goes from fiscal stability to fiscal insanity. Democrats and their allies will bemoan the BBB’s failure, and blame Manchin for it. For the rest of us, who worry about deficits, debt, and the gimmicks used to inflate both…the BBB’s failure is a small victory for fiscal responsibility.