The mission of the Penn Wharton Budget Model (PWBM) “is to provide non-partisan, research-based analysis to inform the country’s budget.”
To that end, PWBM has proven successful. In recent years, Sen. Chuck Schumer (D-NY), Rep. Pramila Jayapal (D-WA), and Sen. Mark Warner (D-VA), among many others, have sung its praises.
PWBM’s most recent report, an in-depth analysis of President Biden’s Build Back Better bill, shows the actual cost of the reconciliation package could be far more expensive than we have been told by those pushing for the bill’s passage.
According to PWBM, “the White House’s Build Back Better reconciliation framework would increase spending by $1.87 trillion over the 10-year budget window while increasing revenues by $1.56 trillion over the same period.”
Based on that projection, PWBM estimates, “the reconciliation package will increase the federal debt by 2.0% and decrease GDP by 0.1% in 2050, relative to the current law baseline.”
However, that is the rosy scenario.
Here is the much more likely outlook, should Build Back Better become the law of the land.
“Under an alternative, illustrative scenario in which all spending provisions in the White House framework are permanent except the clean energy tax credits, new spending would instead increase by $4.26 trillion, and new revenue would still increase by $1.56 trillion over the 10-year budget window. The federal debt would be 25.2% higher and GDP 2.8% lower in 2050, relative to current law.”
In other words, when the accounting gimmicks and budget shenanigans are taken out of the picture, the price tag of Biden’s Build Back Better agenda more than doubles in price.
The Democrats are touting Build Back Better with a measly $1.75 trillion price tag because they are trying to pull a bait and switch on the American people.
Keep in mind, the original version of Build Back Better was estimated to cost $3.5 trillion.
Over the past few weeks, after the American people balked at the whopping $3.5 trillion price tag, the Biden administration and congressional Democrats laughably said the bill would cost $0.
Obviously, the American people know better than to believe that a bill of the size and scope of Build Back Better would cost $0.
So, in desperation mode, the Democrats instead claimed the bill would only cost $1.75 trillion. But, as PWBM explains, that figure is false, too.
The principal reason that Build Back Better is likely to cost more than $4 trillion over 10 years is because the bill’s authors have maintained most of the expansive social welfare programs while deceitfully claiming they will only last for a year or so.
In reality, those supporting the bill know full well that they have no intention of sunsetting their new social welfare programs, such as universal pre-K, universal paid leave, free community college, expanded Medicare, and so forth after only a few years.
As such, they are simply gaming the system. And they know it.
In fact, Rep. Alexandria Ocasio-Cortez admitted so on national television. “You can work with those numbers and have very ambitious policies if you do things like work on the timeline. Washington accounting is notoriously funny,” she told Medhi Hassan on MSNBC in October.
Regardless of what Biden and congressional Democrats say about program timelines, history is replete with so-called temporary government programs that have morphed into eternal entitlements.
In 1984, ironically, Milton Friedmann wrote, “Nothing is so permanent as a temporary government program.”
Today that is truer than ever.
• Chris Talgo (email@example.com) is senior editor at The Heartland Institute.