WASHINGTON – The non-partisan Congressional Budget Office on Thursday released its full cost estimate of President Joe Biden's Build Back Better bill, projecting the measure would add $367 billion to the national debt over the next decade.
The CBO reported the measure would raise more than $1.2 trillion in the form of increased IRS crackdowns on tax cheats, higher taxes and other increased revenues but that overall spending on a myriad of social and climate priorities would lead to a net cost. The projection covered the period from 2022 to 2031.
The release of the CBO data is important to the House's vote on the measure, a $1.85 trillion package of Democratic social spending priorities, including free preschool, climate change initiatives and expansion of affordable housing. Now that the estimate is out, a vote on the measure could take place as early as tonight.
The cost projection undercuts Boden's long-standing pledge the bill is not only fully paid for but would decrease the deficit.
The CBO is an independent, nonpartisan referee that analyzes the budgetary impact of proposed legislation. It was created by Congress in 1974 and operates by rules and regulations set by the House and Senate Budget committees.
The CBO broke down the costs by the House committee in charge of a particular section of the bill. Some of the areas that would add most to the deficit (and the actual amount) are Education and Labor ($454.1 billion); Energy and Commerce ($281.5 billion); Financial Services ($150.7 billion); and Judiciary ($115.1 billion).
The CBO also projected the revenue raised by increasing IRS enforcement would amount to about $207 billion, about half the $400 billion the White House estimated.
"The CBO score did not turn out well for this legislation," said Oklahoma Rep. Tom Cole, the top Republican on the House Rules Committee.
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But Rules Committee Chairman James McGovern, D-Mass., said Democrats were still working to come up with ways of keeping the measure from adding to the national debt.
"I do believe this bill will be fully paid for," he said.
House Democrats want to pass the bill Thursday and send it to the Senate, but centrists have held up a vote on the measure because they insisted on having the CBO estimate first. Moderates have been worried about the scope of the bill and its potential addition to the national debt – even beyond the coming decade – issues Republican challengers are expected to raise against Democratic incumbents during next year's mid-term elections.
For example, the bill would increase costs to Social Security by $121.7 billion over the next 10 years, according to the CBO. But "the budgetary effects would be noticeably greater during the following decade, resulting in an increase in the unified deficit totaling $369 billion over the 2032-2041 period," the agency said.
A group of moderates blocked the legislation from coming up for a vote earlier this month without the estimate (or "score"), saying it would be irresponsible to vote without it. In a letter to House Speaker Nancy Pelosi, five moderates wrote that the delay was to "ensure the final bill is indeed fiscally responsible."
It's not clear how those moderates will vote on the bill now that the estimate has been released but Democratic leaders were confident they could win them over.
A recent analysis from the nonpartisan Joint Committee on Taxation found the Build Back Better Act would raise $1.48 trillion in revenue over a decade and also said the plan would be unlikely to add to the deficit long term.
If the House passes the bill, it would go to the Senate, where two moderate Democratic lawmakers, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, have been effective in getting Democrats to scale back the bill from its initial $3.5 trillion. Manchin and Sinema had objected not only to the scale of the Build Back Better plan but also to certain provisions related to the energy industry, prescription drug pricing, and taxes. It's unclear if they support the version the House will take up.
Sinema and Manchin are crucial to final passage of the bill because Democrats are trying to pass the legislation without any Republican support. They're using a process called reconciliation, which would bypass a potential filibuster in the Senate, but would require the backing of all 50 Senate Democrats and then the tie-breaking vote cast by Vice President Kamala Harris who acts as Senate president.
In the closely divided House, the bill would fail if more than three Democrats break rans and oppose the bill.
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