CREDIT: NY POST GRAPHIC
Posted on 11/15/2021 11:25:07 AM PST by Kaslin
At some point in the near future—whether a few days or a few weeks—the Congressional Budget Office (CBO) will release a complete score of the spending spree legislation Speaker Nancy Pelosi, D-California, and House leaders introduced on Nov. 3. The document will represent the first complete CBO analysis of any of the multi-trillion-dollar spending bills that Democrats have spent the fall writing, then re-writing.
Two budgetary analyses suggest CBO could find the most recent version of the legislation increases the deficit. A Penn-Wharton analysis of the White House’s policy framework concluded it would spend $1.87 trillion over ten years while raising only $1.56 trillion, resulting in a roughly $300 billion deficit increase. (This analysis did not include family leave and other provisions Pelosi added back into the bill.) And a recent Committee for a Responsible Federal Budget analysis found that the House bill as introduced would spend $2.4 trillion while generating only $2.2 trillion in revenue, resulting in approximately $200 billion in deficit spending over the coming decade.
But even if CBO says the Democrat bill won’t increase the deficit, that doesn’t give it a clean bill of health—far from it, in fact. The legislation contains almost as many gimmicks and budget tricks to hide its true costs as it does new entitlement programs. Here are just some of the most egregious examples of the bill’s budgetary legerdemain.
Over and above individual budget gimmicks included in its pages, the bill’s entire premise is a budget gimmick. It would use permanent tax increases to pay for “temporary” spending—which Democrats already want to make permanent. Consider the short nature of the major programs included in the bill:
Eliminating these sunsets, as Democrats want, would substantially raise the cost of their agenda well beyond the “mere” $1.75 trillion or $2 trillion they claim the current bill would cost.
Penn-Wharton believes spending would total $3.98 trillion—again, not counting the family leave and other provisions Pelosi recently added. The Committee for a Responsible Federal Budget said that “extending temporary provisions in the bill could add $2 trillion to $2.5 trillion to the total cost,” placing its ultimate fiscal impact at nearly $5 trillion total.
The bill not only has gimmicks on the spending side, it uses gimmicks on the tax side as well. The language Pelosi introduced would lift the cap on the tax deduction for state and local taxes paid (SALT). Current law allows individuals to write off only $10,000 worth of SALT on their federal taxes from now through 2025. The bill would raise that $10,000 cap to $80,000, but extend that higher cap through 2030, lowering it back to $10,000 in 2031.
The Committee for a Responsible Federal Budget described the SALT proposal thusly:
The House fully pays for an increase in the SALT deduction cap through 2026 on paper by extending the cap beyond 2026, after most provisions of the [Trump tax relief law] have expired. While this change raises revenue relative to current law, it would substantially increase the cost of extending the [Trump tax relief] and thus is likely to result in lower revenue collections over time.
In short, the SALT proposal “pays for” tax cuts now by assuming tax increases later that likely won’t happen. Moreover, a recent analysis by the Tax Policy Center showed not just that this gimmick would lower revenue—it means that most millionaires would get a tax cut from the legislation, rather than the tax increase the left claims it wants to impose on “the rich.”
While the White House claims its provisions to increase funding for the Internal Revenue Service will generate $400 billion in new revenue, CBO concluded earlier this year that new IRS funding will lead to a net revenue increase of only $120 billion. Moreover, as CBO noted in September, budgetary conventions prohibit scorekeepers from recognizing any financial benefits from increased funding for anti-fraud efforts in the score of bills like the Democrat spending package.
The bill generates “savings” by repealing a rule regarding prescription drug pricing rebates issued in the final days of the Trump administration. CBO and the Medicare actuary concluded that the rule would raise Medicare spending, meaning that its repeal would save money, at least in theory. (I explained the issue in detail earlier this summer.)
But the rule hasn’t gone into effect—and won’t ever go into effect, given process flaws leading up to its issuance and a legal challenge based on those procedural flaws. Moreover, Democrats have (unofficially) said they don’t want the rule to go into effect. But the Biden administration won’t withdraw the rebate rule officially, because Democrats want the phony “savings” that comes from Congress repealing a rule Biden has no intention of moving ahead with.
When issuing a proposal to raise taxes on certain S-corporations earlier this year, the U.S. Treasury Department claimed the tax increase would deposit new revenue into Medicare’s Hospital Insurance Trust Fund. Democrats may attempt to frame this proposal, a version of which was included in the bill, as extending Medicare’s solvency.
But during the Obamacare debate, CBO and the Medicare actuary both debunked this double counting. CBO noted that, because the Medicare reductions were being used to fund the new Obamacare entitlements—just as the Medicare tax increases are being used to fund new entitlements in this year’s Democrat bill—the IOUs placed in the Medicare trust fund “would not enhance the ability of the government to pay for future Medicare benefits.”
This qualifies as hypocrisy as much as a gimmick. Biden knows well about the Treasury proposal to raise taxes on S-corporations incorporated into the legislation. Over the past four years, he and his wife have exploited the loophole the House bill would close to avoid paying nearly $517,000 in payroll taxes. Groups as disparate as the Tax Policy Center and the Congressional Research Service have raised questions about the propriety of the Bidens’ actions.
Add it all up, and the legislation doesn’t begin to pay for its myriad programs in a fiscally responsible way—not even close. Moderate Democrats in the House and Senate should use the full CBO score, coupled with recent reports about skyrocketing inflation, to stick a fork in this overstuffed fiscal turkey once and for all.
Build back better. Catchy. But, misleading.
It’s the same kind of catchy phrases democrats use to mislead people all the time. Like ‘for the children’. For ‘racial equality or racial equity’. To ‘save the planet’. For ‘a brighter future of our children’. To ‘save the constitution’.
ALL LIES! All meant to mislead and get the people to buy into their dirty lies and get their agenda passed.
Meanwhile, nothing that democrats have ever done, has made the country better or healthier or safe.
CREDIT: NY POST GRAPHIC
Ping
Imagine if we had a media that was awake during all administrations. The rats put out bald faces lies knowing the media will cover for them
PERUSE LATER.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.