Biden Admin's Promise That $1.85T Spending Bill Would Cost 'Zero Dollars' Just Hit Wall of Reality
Remember all of those claims from President Joe Biden that, despite the fact it cost $1.85 trillion, his spending bill won’t add to the national debt and won’t increase most people’s taxes — all because it’ll beef up taxes and tax enforcement against the rich?
“My Build Back Better Agenda costs zero dollars,” Biden tweeted in September.
“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.”
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.
— President Biden (@POTUS) September 26, 2021
When White House Chief of Staff Ron Klain tweeted that the spending plan was “twice as big, in real dollars, as the New Deal was,” Daily Caller White House correspondent Anders Hagstrom expressed doubt that it would “cost zero dollars.” Klain tried to shoot him down.
It’s twice as big, in real dollars, as the New Deal was. This can be the Congress that goes from 12 years of universal education to 14 years; the makes the largest investment in fighting climate change ever; that cuts what families pay for child care in half. https://t.co/hpK95CYcxD
— Ronald Klain (@WHCOS) October 28, 2021
“Nope: The net cost is still zero because we raise more than enough revenue to pay for every investment without raising taxes on anyone making less than $400k,” Klain said, quote-tweeting Hagstrom.
Nope: The net cost is still zero because we raise more than enough revenue to pay for every investment without raising taxes on anyone making less than $400k. https://t.co/3gKp6H3O5K
— Ronald Klain (@WHCOS) October 28, 2021
Now here’s a shocker: The Congressional Budget Office apparently determined that’s a bunch of piffle.
According to a Sunday report in The New York Times, the nonpartisan CBO found that a crackdown on tax evaders by the Internal Revenue Service wouldn’t generate the kind of money the Biden administration thought it would.
The CBO isn’t expected to release its report until Friday, but the Times’ Alan Rappeport said they found the campaign against tax scofflaws would only generate $120 billion over 10 years — a far cry from the $400 billion the Biden administration was expecting.
“The White House has begun bracing lawmakers for a disappointing estimate from the budget office, which is likely to find that the cost of the overall package will not be fully paid for with new tax revenue over the coming decade,” Rappeport wrote.
Their strategy? Telling Democratic lawmakers they shouldn’t believe the nonpartisan CBO but instead trust the very partisan administration, since they have better numbers.
“In this one case, I think we’ve made a very strong empirical case for CBO not having an accurate score,” said Ben Harris, the Treasury Department’s assistant secretary for economic policy. “The question is would they rather go with CBO knowing CBO is wrong, or would they want to target the best information they could possibly have?”
Well, when you put it that way …
The variance seems to be over whether or not increased enforcement of tax cheats will generate the kind of returns over time that the White House thinks it will.
In a preliminary assessment earlier in the year, the budget office warned that those who had avoided paying their fair share would adjust their methods of evasion over time. The administration, meanwhile, believes the $80 billion invested in the IRS over the next decade would enable the kind of enforcement which would encourage compliance.
They’ve also claimed this won’t lead to more audits for people earning under $400,000, relying on a September Treasury Department report that the wealthiest 1 percent underpay taxes by as much as $163 billion a year, the Times reported.
Republicans, on the other hand, have noted this is a recipe for the IRS to become even more intrusive than ever.
“The IRS will double in size. It will be more involved in the day to day lives of every American,” GOP Rep. Mike Kelly of Pennsylvania said last month, according the House Ways and Means Committee. “And the result will be an invasion of privacy and the heavy hand of the government squeezing out smaller, more local businesses.”
Even though one of the more invasive measures of the bill has been excised — the hated proposal that would allow the IRS to monitor virtually any bank account — the idea that money can be legally squeezed from the top 1 percent without jacking up tax rates or increasing audits on middle-class Americans was always a pernicious fantasy designed to sell a bill the White House knows full well can’t be paid for.
If moderate Democrats like Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona didn’t like the size of the spending bill before, a CBO report like this would make it even more toxic for them. Given that the Biden administration can’t lose a single vote to pass this under reconciliation measures, this could be where the tidal wave of “zero dollar” Democrat spending finally breaks.
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