WASHINGTON (Reuters) – Republicans in the U.S. Congress attacked Democratic President Joe Biden’s $ 1.7 trillion social bill on Friday, releasing a non-partisan estimate that it could increase the federal deficit by $ 3 trillion on a decade if its programs are made permanent.
Republican Senator Lindsey Graham had asked the Congressional Budget Office to calculate the effects of the bill https://www.reuters.com/business/cop/whats-bidens-175-trillion-build-back-better-package-2021 -11-05 on the deficit if the programs – including a child tax credit and free preschool for all 3- and 4-year-olds – would continue for 10 years, rather than being phased out sooner as proposed the Democrats.
Republicans had previously criticized the phase-outs as maneuvers to underestimate the cost of the bill and claimed the bill would worsen inflation. Consumer prices posted their biggest gain on Friday https://www.reuters.com/markets/us/us-consumer-prices-increase-further-november-2021-12-10 since 1982.
The new forecast comes a month after the CBO released an estimate that the bill that was passed by the House of Representatives would increase federal budget deficits by $ 367 billion over 10 years.
That doesn’t take into account the roughly $ 207 billion in revenue that could be generated through better tax enforcement, the CBO believes. This, however, is only about half of what the Biden administration says better tax enforcement could increase.
“No one believes these programs are going to end. Democrats want them to continue,” Graham told reporters. “I’m begging some reasonable Democrats to stop this train.”
Democrats scorned the attack, which House Speaker Nancy Pelosi called “a false partition of an imaginary bill.” Senate Majority Leader Chuck Schumer said the existing proposal was paid for and any future extensions would pay as well.
The bill provides for the expiration of the child tax reduction after one year, with the free grants for kindergartens and childcare expiring after six years.
Amid a wave of activity in Congress that saw lawmakers avoid a government shutdown and take the first steps to raise the federal government’s debt limit by $ 28.9 trillion, averting an unprecedented default , there has been little visible progress on adopting Biden Build Back Better’s $ 1.75 trillion bill.
This package, at the heart of Biden’s social and climate agenda, would provide free preschool for all 3- and 4-year-olds, increase home care cost coverage for the elderly and disabled, significantly reduce the cost some prescription drugs such as insulin; and expand affordable housing programs.
Two Democratic senators, Joe Manchin and Kyrsten Sinema, have not pledged to support Build Back Better, and both parties are pressuring them for their support. Every Senate Democrat’s vote will be needed if the party is to pass the measure without the support of House Republicans, who unanimously oppose it.
Manchin in particular expressed concern about the big spending and its possible inflationary impact, and at one point last month accused his fellow Democrats of playing “shell games” with the cost of the program. Biden told reporters on Friday he would speak to Manchin next week.
Treasury Secretary Janet Yellen argued this week that it was inappropriate to judge the social policy bill on the basis of assumptions about future acts of Congress.
“This analysis concerns a bill that the House has not adopted, that the Senate does not consider and that the president – who has committed to pay for a permanent investment – would not sign,” he said. she said in a note to lawmakers seen by Reuters.
Inflation surging this year to an almost four-decade high in November has become the favorite club of Republicans for criticizing Biden’s ambitious spending proposals.
There is little hard evidence that the plan – spread over a decade – would have the same impact on increasing consumer demand and therefore inflation as previous pandemic relief spending under Biden and his predecessor. , Republican Donald Trump.
Yet inflation is now the number one economic concern voiced by American consumers, far more than unemployment, which could make it harder for Democrats to sell what Biden called the “jobs bill. blue collar workers “.
“When asked directly whether inflation or unemployment was the most serious problem facing the nation, 76% chose inflation while only 21% chose unemployment,” Richard Curtin said Friday, director of the widely followed University of Michigan consumer sentiment index in a statement accompanying the latest reading of the series in early December.
(Reporting by Susan Cornwell, additional reporting by Dan Burns and Andrea Shalal; Editing by Scott Malone and Jonathan Oatis)
Copyright 2021 Thomson Reuters.
