If Democrats Want To Save Build Back Better, It Must Be Paid In Full
The Build Back Better Act (BBBA) is now on the back burner. Can it be recovered? The answer can come down to whether the Democrats want to adopt something transformational, as they say they want, or just temporary, what they have produced in the House.
One thing is clear: Sen. Joe manchinJoe ManchinHarry Reid, political pugilist and longtime Senate Majority Leader, dies.‘s (DW.Va.) blunt declaration that he would not support the BBBA as it was drafted ended any chance that the bill could be passed by the Senate in the same form it was passed by the House.
And, it’s not just a matter of Manchin’s objections. The Senate parliamentarian has determined that the immigration provisions in the bill passed by the House do not qualify for the protection of reconciliation. There is also an unresolved dispute in the Senate over raising the ceiling for national and local tax deductibility (SALT).
Manchin’s objections, however, will be the most difficult to resolve as they apply broadly to the overall cost of the BBBA, its many expiring provisions that mask its effect on future deficits, and its possible effect on inflation. Without the prospect of Republican support for the bill, Manchin’s vote will be needed to allow Vice President Harris to break a 50-50 tie, which means major changes must be made for the BBBA to have a future.
Despite the obstacles, President BidenJoe BidenBiden, Lawmakers Mourn Harry Reid 29% of GOP Support Efforts to Indict Jan 6 Rioters: Poll Congress Must Meet Time to Hold Big Pharma to Account MORE and Democratic leaders in Congress said they will not withdraw from the negotiations. They have too much at stake.
Much of the attention since Manchin’s announcement has focused on what’s inside and what’s outside. Those decisions will be tough, but whatever specific political compromises will be needed to get the bill to the finish line, Manchin has laid down a global marker that should serve as a guiding principle in rebuilding the BBBA: make sure that its provisions are fully and transparently funded over the long term.
This is not the case with the version that was adopted in the House. In an effort to implement as many new or expanded programs as possible while keeping the official 10-year cost at around $ 2 trillion without increasing budget deficits over 10 years, House Democrats have chosen to simply put end several key provisions after a few years while compensating for them with permanent increases in income.
Democrats aren’t the only ones using this budget sleight of hand. Republicans used the same timing gimmick to pass tax cuts in 2017 (and without claiming to offset those costs). The problem the Democrats created for themselves, however, is that they continued to portray the BBBA as “transformational” and “fully paid,” even as they gave up on trying to make several policies permanent. It is difficult to argue that temporary policies are transformational. You cannot build a skyscraper by funding only the first floors.
This dilemma was exposed when the non-partisan Congressional Budget Office (CBO) issued a To analyse, requested by the Republican leaders of the House and Senate budget committees, showing that if certain provisions of the BBBA passed by the House were made permanent, rather than allowed to expire on time, the total cost of the bill would increase the costs of the bill. future budget deficits of $ 2.8 trillion more than the bill’s official score (ie, assuming sunsets take effect).
Most of the additional costs were attributable to the extended child tax credit extension, which would drop from $ 185 billion for a one-year extension to nearly $ 1.6 trillion over the 10-year budget window with sunset suppression. Other temporary proposals in the BBBA include funding for universal pre-kindergarten, childcare grants, and expanded premium tax credits to help low-income households ineligible for Medicaid purchase a drug. private health insurance.
Democrats repulsed against the CBO report, noting that they have pledged to pay for any future expansions of expiring programs. It is a responsible commitment, but it is not a sufficient response because it does not say where the additional funding of almost $ 3 trillion would come from. The only reason Democrats resorted to sunset tricks in the first place is because they couldn’t agree on a set of offsets large enough to pay for these programs permanently. Which payfors will be available in the future that are not available now? And can that promise coexist with another – the president’s promise not to raise taxes on households earning less than $ 400,000?
Another vital question left unanswered is what happens to these programs – and the people who have come to rely on them – if Democrats no longer have unified control of government when expiration dates roll in? A sure bet: the list of mutually acceptable compensations will become much, much shorter if Republicans claim control of the House, Senate or White House.
In this context, the assessment of the CBO sets up a difficult choice: higher deficits, larger compensations or a set of expired programs. This choice must be clear now before the BBBA becomes law. Rather than denying the obvious, Democrats would be better served by using the CBO report as a roadmap to retooling BBBA. Focus on a few high-priority tasks, pay for them, and throw the rest away.
President Biden and his fellow Democrats deserve praise for sticking to the idea that new policies should be paid for, but a one-year extension of the child tax credit is not transformational and it is all they paid for in the home version of the BBBA.
As negotiations resume after a cooling off period over the holidays, Democrats need to keep in mind that whatever they come up with, Americans need to know what they’re getting with BBBA – and what they’re not getting .
Robert L. Bixby is Executive Director of the Concord Coalition.