Though we’re rejoicing that some aspects of the original, mammoth $3.5 trillion “social infrastructure” spending bill (which was actually more in the $5-5.5 trillion range, once budget gimmicks were accounted for) have been cut out, there’s not much to celebrate.
The Wall Street Journal editorial board gives a great summary of the shady math in President Biden’s latest iteration:
The jerry-rigged plan is an enormous expansion of government with quarter-baked entitlement programs that will retard work and $1.85 trillion in tax increases that will distort and limit investment. The $1.75 trillion cost that Democrats have assigned their bill is an illusion. They use phony accounting to finance a few years of new spending with 10 years of tax increases.
For example, the plan extends the $3,600 child tax credit for one year at a cost of $110 billion. But Democrats will inevitably extend the credit next year. If Republicans oppose this or try to scale the credit back, they will be attacked for raising taxes on middle-class families. The true 10-year cost is about $1.1 trillion.
The agreement drops the House’s proposed Medicare vision and dental expansion. But it preserves a new hearing benefit, which the White House claims will cost a mere $34 billion and start in 2024. The annual cost of the hearing benefit once fully phased-in is some $16 billion. Congress will invariably make it permanent. True cost: $160 billion.
Democrats also plan to extend ObamaCare subsidies through 2025 for higher earners and broaden them to low-income folks in states that rejected the Medicaid expansion. The White House says this will cost $130 billion, but the Congressional Budget Office has estimated that providing coverage to these folks would cost north of $500 billion over a decade.
These programs are merely illustrative of how Democrats are desperately trying to squeeze a menagerie of spending into their negotiated $1.75 trillion top-line cost, with the real cost likely to be closer to $4 trillion.
|$555B||Various climate change and clean energy subsidies||permanent|
|$400B||Universal Pre-K to 3- and 4- year olds and child care program||6 years|
|$200B||Expanded Child Tax Credit and increased Earned Income Tax Credits||1 year|
|$150B||Expand Medicaid home- and community-based services||permanent|
|$150B||Affordable housing benefits||permanent|
|$130B||Expanded ACA tax credits for premiums |
ACA credits made available to those without Medicaid coverage
|$90B||Equity priorities and other subsidies||permanent|
|$40B||Benefits for post-high school education and workforce development||permanent|
|$35B||Create a hearing benefit for Medicaid|
|$100B||Immigration reform (if Byrd rule compliant)|
When he gets back from his Europe trip, we’re waiting for Biden to repeat his lie that this bill will cost “zero dollars.” The bill instead will be paid for by American taxpayers and citizens, including poor and middle class families who will see their wages cut and prices rise to pay for this government expansion.