Nonpartisan Scorekeepers Confirm True Cost of Tax-and-Spend Bill
CBO, JCT confirm high price, long-term negative economic impact
Washington, D.C.--The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) have confirmed what other nonpartisan analysts have said: the policies in the Democrats’ tax-and-spend legislation will negatively impact the economy, with economic effects severely worsening when intentions of permanence are taken into account.
“For months, Democrats have been saying they intend for the policies in their social spending bill to be made permanent, yet they’re trying to mask the true cost by frontloading it with inflationary stimulus spending and budget gimmicks,” said Crapo. “Even with the gimmicks, the bill shrinks the economy, chokes off investment, crushes capital, and loses jobs relative to an economy without the reckless policies. The desired permanence of these policies is even worse, with CBO, JCT and non-partisan analysts all confirming it will cause significant negative economic effects and ballooning debt. More spending, combined with job-killing tax hikes, will only accelerate the record-high inflation American families are experiencing every day.”
Today, CBO released an analysis showing that if certain provisions in the Build Back Better Act were made permanent, the bill would cost $4.9 trillion, and increase deficits by $3 trillion. Neither of these figures include $266 billion in interest on the debt.
In addition to CBO’s new estimate, a recent analysis by the JCT estimates the cost of certain revenue provisions of the Build Back Better Act, if made permanent. In that analysis, JCT estimates the full cost of permanence for the child tax credit alone is $1.6 trillion, which would require either more taxes or trillions more in debt.
A separate macroeconomic analysis from the JCT shows legislation with an inflationary short-term stimulus and long-term negative economic effects. While JCT’s dynamic score does not include enough information to provide an assessment of what would happen to the economy as time goes by, the nonpartisan Penn Wharton Budget Model and Tax Foundation have both shown long-run significant declines in GDP, investment, and employment, while federal debt surges.
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