The House version of the Democratic climate and social spending bill would increase federal deficits by $3 trillion over the next decade if temporary provisions are made permanent, the Congressional Budget Office estimated Friday.
The numbers were requested by Republicans, who have criticized the Democratic plan as being riddled with budgetary gimmicks to make it appear to cost less. The legislation has several spending items that sunset early that, if made permanent as Democrats intend them to be, would balloon the cost of the bill.
The report from the budget office released Friday is a blow to President Joe Biden's efforts to push the bill through Congress, as it will add to fears that the spending measure would push the government further into debt and stoke inflation. Democratic Sen. Joe Manchin of West Virginia, in particular, whose vote Biden is counting on, has expressed such worries.
The initial scoring from the CBO only accounted for the legislation as written, sunsets included. The CBO first said the legislation would increase federal deficits by $367 billion over the next 10 years.
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On Friday, the Joint Committee on Taxation also released a long-term projection for if the expanded child tax credit is made permanent. It found that if the program continued, it would cost nearly $1.6 trillion over the next decade. Democrats recently expanded the child tax credit by increasing the money that families received from up to $2,000 per child to $3,600 for children under 6 years old and $3,000 for older children.
Treasury Secretary Janet Yellen tried to preempt news of the expanded budget analysis by sending out a Thursday night memo to lawmakers. She said President Joe Biden has vowed to pay for any extensions of the legislation’s provisions and that “it is inappropriate to judge this legislation based on an assumption that future acts of Congress won't be paid for.”
“Tomorrow, the Congressional Budget Office is expected to release its analysis,” she wrote. “To be clear, this should not be confused with a score of the Build Back Better Act, which was already released. Instead, 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.”
The Committee for a Responsible Federal Budget, which advocates for lower deficits, had previously projected that the final cost of the Democratic legislation over a decade with all temporary provisions made permanent would be $4.9 trillion — much higher than Democrats have marketed.
It is worth noting that the budget office’s bottom-line estimate of the deficit effects of the bill doesn’t include revenues from the Democratic proposal to increase funding for IRS enforcement. The CBO has separately forecast that the proposal would raise $207 billion in revenues over a decade, although the Treasury Department claims it would raise nearly double that amount.
The new scoring will make passing the spending legislation ever the more difficult.
Manchin has decried the early sunsets for several provisions in the legislation, calling them "shell games." The new CBO score with permanent provisions, requested by Sen. Lindsey Graham of South Carolina, the top Republican on the Budget Committee, is likely geared toward trying to peel away Manchin's support for the spending legislation.
"This is a recipe for economic crisis," Manchin has said of the budgetary tactics.
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Graham held a press conference on Friday after the numbers were released in which he stood next to a sign emblazoned with a quote from Manchin calling the early sunsets "budget gimmicks." Graham said he believes that now that the new scoring has been released, Manchin will "listen to the facts" about the legislation, which he dubbed a "spending orgy."
"What I think will happen is that Joe will take these numbers and he will start making decisions about what comes next," Graham said, adding that the massive amount of spending coupled with high inflation will likely give Manchin "great pause."
Democrats can’t afford to lose even a single vote given that the Senate is evenly divided, with Vice President Kamala Harris serving as the tiebreaking vote.