The Congressional Budget Office (CBO) finally released its long-awaited cost analysis of Democrats' Build Back Better Act (BBB) last Friday.
But despite the CBO report's warning that the legislation could add as much as $367 billion to the federal deficit over the next decade, the White House and congressional Democrats have said the CBO's estimate proves that the legislation is affordable and will end up costing taxpayers little, if anything, in coming years.
At the heart of Democrats' claim is a legislative proposal to expand the IRS and increase tax enforcement. The CBO did not officially score that part of Democrats' plan, although it did include a "non-scored revenue" estimate of $207 billion over 10 years in its analysis of the legislation.
If CBO's non-scored estimate of increased IRS enforcement is accurate—and there are plenty of reasons to think it isn't—the BBB would still add about $160 billion to the federal deficit. Democrats and the White House, however, say the CBO—once called the "gold standard" of budgetary scorekeeping by President Joe Biden—is wrong.
According to Biden and a relatively small band of left-wing economists devoted to saying whatever they must to help push the Build Back Better Act across the finish line, Democrats' plan to dramatically expand the IRS will result in enough revenue to offset their new spending. In October, President Biden even went so far as to say that the plan will have a "zero price tag on the debt."
But there are good reasons to believe BBB's cost will actually be much higher than either the CBO or White House claim—perhaps even to the tune of trillions more.
In order to help the legislation appear more affordable than it actually is, Democrats designed key parts to sunset at various times over the next several years, while keeping many of the plan's funding mechanisms in place.
By utilizing this misleading strategy, the CBO and other analysts are compelled to predict that the BBB, one of the most expensive pieces of legislation in decades, will have a net-positive effect on the budget in 2027 and beyond. Incredibly, in 2031, the final year of CBO's analysis, the agency projects the revenue produced by the BBB will exceed its costs by $162 billion.
This almost certainly will not happen. It is incredibly unlikely that numerous key provisions of the BBB will actually sunset according to the bill's terms, especially considering that President Biden and Democrats have repeatedly promised that the Build Back Better Act is meant to "rebuild the backbone of the country" and "set the United States on course to meet its climate goals, create millions of good-paying jobs, enable more Americans to join and remain in the labor force, and grow our economy from the bottom up and the middle out."
How can Democrats achieve any of those lofty goals if they are planning on phasing out much of the legislation in under 10 years?
Truth is, the sunset provisions of the bill are designed to fool people into thinking it will cost much less than Democrats are planning to spend. A careful look at just some of the specific sunset provisions help to illustrate that point.
Democrats say the BBB would be the "most transformative investment in children and caregiving in generations" because it would, in part, extend the expanded Child Tax Credit (CTC). But according to the language of the Build Back Better bill, the CTC will only be expanded for one year, at a cost of $130 billion.
If the expanded CTC were to be extended for 10 years, which is very likely what Democrats are planning, it would cost well over $1 trillion—nearly 10 times the amount estimated.
Another "transformative investment" that the BBB will supposedly phase out is its universal pre-K and child care tax credit provisions. Together, they will officially cost $390 billion and will be eliminated after just six years. If they were extended so that the program lasts at least 10 years, the cost of the program would more than double, to $800 billion.
Similar budgetary gimmicks were used to make the proposal to expand the Earned Income Tax Credit and Affordable Care Act, among other important parts of the BBB legislation, more palatable to Americans worried about our ballooning national debt.
According to the nonpartisan Committee for a Responsible Federal Budget (CFPB), the total amount added to America's deficit over the next decade would be a whopping $3 trillion if all of the key provisions of the BBB were to remain in place for just 10 years—far more than the mere $160 billion estimated by the CBO.
CFPB's $3 trillion figure is likely much closer to reality than Biden's price tag of $0, but don't expect the White House or Democratic congressional leadership to admit that anytime soon. They desperately need their more moderate Democratic colleagues in the Senate to feel comfortable voting for an unaffordable bill. The only way to do that is to alleviate some of the public pressure they are now facing by duping the public into believing Democrats' plan will amount to just a fraction of its true long-term cost.
Justin Haskins (jhaskins@heartland.org) is the director of the Socialism Research Center at The Heartland Institute and the co-author, with Glenn Beck, of the forthcoming book, The Great Reset: Joe Biden and the Rise of 21st Century Fascism.
The views expressed in this article are the writer's own.
