Biden's Build Back Better bill costs more than GOP's 2017 tax reform law: CBO
President Biden's sweeping spending bill would add $3 trillion to deficits over 10 years if made permanent, according to the Congressional Budget Office.
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Democratic leaders often criticize the $1.9 trillion price tag of the GOP's tax reform law but President Biden's Build Back Better Act exceeds the estimated cost of the 2017 tax reform.
The Congressional Budget Office estimates that Biden's spending bill would add nearly $3 trillion to deficits over a 10-year period. The Democrats are using the budget reconciliation process to pass the bill in the 50-50 Senate to avoid the legislative filibuster.
The CBO estimated the GOP tax reform would add $1.9 trillion to the deficit over a 10-year period. The GOP used the budget reconciliation process to pass the bill in 2017.
House Speaker Nancy Pelosi often refers to the across-the-board tax cuts Republicans passed as a "tax scam" that increased the nation's deficit.
"What [Biden] is talking about is exactly just to reverse some of what the Republicans did in their tax scam where they added almost $2 trillion to the national debt, if you include the cost and the interest on the debt, to give tax breaks to the top, top, wealthiest people in the country," Pelosi said in April 2021.
The Republican tax reform bill cut tax rates for individuals across every tax bracket and lowered the corporate tax rate to 21%. GOP leaders argued that lowering the corporate tax rate from 35% would make the U.S. more competitive with other developed nations.
The Democrats' reconciliation bill includes a $7,500 tax rebate for the purchase of electric vehicles. It contains an additional $4,500 tax rebate for the purchase of union-made election vehicles. The estimated cost of these incentives is about $26 billion.
The workforce is not unionized at carmakers such as Tesla, Toyota and Honda. Tesla CEO Elon Musk recently slammed the tax rebates in the legislation and said Congress should throw out the entire bill.
"I'm literally saying get rid of all subsidies," Musk said.
Build Back Better continues the expanded child tax credit of up to $3,600, at an estimated cost of $1.6 trillion over 10 years. The legislation would also eliminate the state and local tax deduction cap of $10,000 that was part of the GOP's tax reform law. Eliminating the cap would cost approximately $220 billion over 5 years. Experts from the liberal Brookings Institution argue that the SALT deduction is a handout to wealthy Americans.
An analysis from the Committee for a Responsible Federal Budget shows that the tax revenue "offsets" in the Biden bill are not enough to cover the costs of its new spending programs, the continuation of the expanded child tax credit, lifting the SALT deduction cap, and tax rebates for purchasing electric cars.
The CRFB found that continuing the programs in the legislation over the next decade would result in $3.2 trillion being added to the nation's debt.
"The Build Back Better Act relies on a substantial amount of short-term policies and arbitrary sunsets to reduce its cost, raising the possibility of deficit-financed extensions in future years," read the CRFB analysis. "A more robust and fiscally responsible package would not rely on these gimmicks to achieve deficit neutrality."
An expert from the Tax Foundation told Just the News that Biden's Build Back Better bill costs more than the GOP's 2017 tax reform law overall.
"Build Back Better would cost about $2.75 trillion over 10 years if the temporary provisions were made permanent excluding interest costs, while [the Tax Cut and Jobs Act of 2017] would cost about $1.76 trillion from extending the expiring provisions after 2025 excluding interest costs," said Garrett Watson, senior policy analyst at the Tax Foundation.
"This excludes the TCJA 2022-2025 cost because that's incorporated into the current law baseline used by scorers like the CBO, but it would be higher if you included that cost too (it's around $640 billion)," he added. "If you include interest costs assuming no other offsets, it's about $3 trillion for BBBA and $1.98 trillion for TCJA.
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