According to media reports, Democrats are reducing the total cost of their plan from $3.5 trillion to as low as $1.9 to $2.2 trillion. However, they are not actually seeking to reduce total federal spending – instead they are simply utilizing budget loopholes and gimmicks to create the illusion that the bill will cost less.
The bill will contain the same harmful policies including trillions of dollars in job-killing tax hikes, wasteful welfare programs that increase dependency on government Green New Deal climate subsidies.
Most of the policy changes being floated to lower the cost of the bill involve shortening the length of time a certain policy will last, not eliminating any of these destructive policies. Congress typically measures spending and taxes over a ten year budget window, and Democrats want to manipulate this practice by having some programs expire after several years and have others take effect gradually.
Rep. Pramila Jayapal (D-Wash.), head of the Congressional Progressive Caucus, said, “We would be willing to trim the number a little bit by cutting back the years for some of these programs, but we want to make sure our priorities as we've articulated them are all contained within the bill.”
The expectation is that once new welfare programs are created, they will never go away and that like other federal programs, they will become permanent, expensive programs. CBS News reported that, “The progressives hope that popular programs would then be renewed down the line, as they're about to expire.”
Specifically, Democrats are expected to shorten the duration of programs like these even more. For example, instead of creating a fully refundable Child Tax Credit until 2025, they may only include an expanded CTC for 2 years. The Wall Street Editorial Board explains that, under an expanded CTC, a married couple making $150,000 a year with four children would qualify for $13,200 a year. A similar family making $400,000 a year could still receive up to $8,000 a year in taxpayer dollars.
Democrats may also reduce the duration of the paid family and medical leave provision. Under this provision, a married couple with a newborn making $200,000 a year could collect more than $1,000 a week.
It is clear that these benefits go far beyond the scope of helping those in need. In fact, this bill increases taxes on working families to deliver thousands of dollars a month to very well-off families. However, because these welfare programs hand out a massive amount of money, provide money to a large base, and would become a regular part of many Americans' month (or week), it would be incredibly difficult to get rid of them.
To be clear, the $3.5 trillion bill released by House Democrats already uses budget gimmicks.
Within the current legislation, the fully refundable Child Tax Credit only lasts until 2025, universal pre-kindergarten funding expires in 2028, free community college expires in 2028, many of the climate tax credits expire in 10 years, several affordable housing provisions expire in 10 years, and more. Democrats reasonably assume these measures will be extended indefinitely, but place an expiration date on them to bring down the cost of the bill.
If the provisions of this bill are made permanent, the Committee for a Responsible Federal Budget (CRFB) estimates that the true cost could be between $5 trillion and $5.5 trillion over a decade, and much more beyond a decade.
Rather than pushing through trillions in new spending, lawmakers should look to rein in out of control federal spending. Last year, the U.S. government spent over $6 trillion. The U.S. is on track to spend over $6 trillion this year, or 30 percent of the economy, even before this massive spending plan is signed into law.
The CBO already projects that the U.S.’s interest costs will triple within the next decade: $331 billion this year to $910 billion in 2031, accounting for 12 percent of the entire federal budget. This budget resolution would launch the United States into even deeper debt, thus requiring a massive chunk of yearly federal spending be dedicated to interest payments.
While the topline cost of the Democrat’s socialist tax and spend bill may be going down, it appears that any reduction in size will be due to budget gimmicks, not true spending restraint. Americans should not be fooled into thinking this bill is anything but a massive socialist Wishlist packed with destructive tax hikes, wasteful spending, and giveaways to progressive special interests.