The U.S. government spends more than it receives, running a $3 trillion budget deficit and adding to the national debt of $28 trillion. Unless the account sheet is in balance, every dollar and cent Washington spends will add to the growing pot of red ink. President Joe Biden sees the numbers in a different light, arguing that his $3.5 trillion Build Back Better agenda will cost the taxpayers nothing, even though most estimates suggest it will exacerbate Uncle Sam’s finances. The truth might lie in the numbers.
Government Spending ‘Costs Zero Dollars’
Will spending more cost less? Biden’s Twitter account published a head-scratching tweet on Sept. 25, writing on the social media outlet:
“My Build Back Better Agenda costs zero dollars. Instead of wasting money on tax breaks, loopholes, and tax evasion for big corporations and the wealthy, we can make a once-in-a-generation investment in working America. And it adds zero dollars to the national debt.”
The president reiterated this forecast, telling reporters at the White House: “We pay for everything we spend. It’s going to be zero. Zero.” It is not only the president who is espousing this belief. Representative Pramila Jayapal (D-WA), a lead progressive budget negotiator, told the Associated Press that she believes “this is going to be a zero-dollar-bill.”
The idea is that the White House’s proposal will raise enough tax revenue to pay for one of the largest spending plans in the nation’s history. The Biden administration wants to increase the top income, corporate, and capital gains tax rates and increase levies on foreign income. The Democrats, who are adamantly opposed to making cuts, project this would raise $3.6 trillion.
What the Experts Say
First, an independent analysis by the Committee for a Responsible Federal Budget (CRFB) concluded that the real cost of the budget proposal is about $5 trillion. But even if the $3.5 trillion figure is accurate, the numbers, according to the crunchers, do not add up. The Wall Street Journal noted that Senate Democrats might attempt “to include every program but start small and pretend they’re temporary,” purporting that this would allow the party to evade reconciliation rules and permit spending to add to the federal deficit during a ten-year budget window.
A left-leaning think tank, the Tax Policy Center, estimated that Biden’s tax hike would generate only $2.1 trillion in revenues. The conservative Heritage Foundation called it “a ridiculous lie,” predicting that it would potentially add as much as $2 trillion to the national debt. The Congressional Budget Office (CBO), the non-partisan fiscal watchdog, projects that the debt will eclipse all-time highs by the end of the decade, further noting that the U.S. debt will soar $13.6 trillion by 2031. Moreover, the recent bipartisan infrastructure bill will add $256 billion to the federal deficit over ten years.
Erielle Davidson, a senior policy analyst at the Jewish Institute for National Security of America, was blunt in a statement about Biden’s promise: “Your comms person is ‘economically illiterate.'”
A Leaner Build Back Better Agenda?
Some moderate Democrats, including Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), are pushing for a leaner budget, potentially lowering the ten-year plan to $1.5 trillion. Biden also is asking for more patience from lawmakers and the American people, explaining that they need to get the numbers so that the votes come in the way he wants. “This is a process,” he averred. “But it’s just gonna take some time.” The Build Back Better budget contains plenty of goodies, from payments for family services to climate change investments. Is this something the U.S. government can afford? Despite the exploding debt and deficit that plague America’s fiscal future, the president insists this is a once-in-a-generation opportunity. In other words, what’s another few trillion dollars among today’s crop of taxpayers?
~ Read more from Andrew Moran.