Democrats are hanging a zero-dollar price tag on their $3.5 trillion social and climate spending spree ahead of Thursday’s crucial vote on President Joe Biden’s legislative agenda.
Liberal Democrats have joined the White House in contending the expansive partisan reconciliation package is deficit-neutral in the hope it will entice centrist members of their party to support it. The liberals are threatening to withhold their support for the separate Senate-passed $1.2 trillion bipartisan infrastructure deal, potentially dooming it in the House, unless the reconciliation bill passes first.
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Bill Hoagland, a former Republican Senate budget and appropriations expert, believed the “$0” messaging strategy was deployed to help Democrats as Congress grapples with infrastructure reform, a possible federal government shutdown, and debt ceiling crisis.
But the Bipartisan Policy Center senior vice president said the legislative package being considered by Congress was likely not deficit-neutral.
The House Ways and Means Committee projects it can raise $2.3 trillion in revenue over the next decade to fund $1.3 trillion in “Child Tax Credit extensions, infrastructure, and some of the social safety net programs,” according to Hoagland. But that leaves $1 trillion “for Medicaid, for agriculture, for energy, for immigration, for justice,” he told the Washington Examiner.
Still, he noted, the bills have not yet been given final cost estimates.
“This is the first time I’ve seen something like this,” he said. “We always had cost estimates for all the bills. The only cost estimate we have is one small business committee.”
Chris Edwards of the libertarian Cato Institute said taxpayers would “ultimately” cover the cost “through current tax increases, future tax increases, and inflation.” Edwards, a tax expert, warned the proposed Democratic individual and corporate levies may not be as profitable as predicted, hampering economic growth.
He noted the Committee for a Responsible Federal Budget, a group that advocates for lower deficits, estimated the reconciliation bill would not bring in the $600 billion of added revenues from faster economic growth that Democrats want.
“We know from experience that federal involvement in activities such as infrastructure adds a lot of bureaucracy, misallocation, and costly regulation to otherwise useful activities, such as highway building,” he added. “If additional spending on highways or paid leave had higher benefits than costs, we should assume that state governments are already doing them.”
Heritage Action Executive Director Jessica Anderson said the plan would cost small businesses and taxpayers.
“The truth is his plan will immediately cost trillions while fundamentally changing American society in ways that will permanently expand the government’s footprint on our lives and continue to cost trillions into the future,” she said.
White House press secretary Jen Psaki parroted the “$0” assertion this week but conceded some taxpayers would dole out more to cover Biden’s agenda.
“There’s a clear difference between what we’re talking about as it relates to taxpayer funds, right, or funding that will lead to our debt,” she said. “Fifty of the top companies last year in 2020 paid not $1 in taxes. A lot of high-income individuals pay lower tax rates than nurses and teachers. Nobody thinks that’s fair. Yes, we’re asking them to pay more. Yes, it will cost them more.”
Republicans have latched on to the “$0” line, lambasting Biden because he “must think … it’s not his money.”
“If it was, maybe he’d think twice about recklessly wasting it on socialist schemes that will make all Americans worse off,” Republican National Committee spokesman Tommy Pigott said in an email to reporters.
The reconciliation bill’s $3.5 trillion price tag has long been a divisive issue. Biden urged centrist Democrats as recently as last week to counteroffer with a figure they felt comfortable with after Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona disputed the cost. The president later dropped that tactic, encouraging them instead to focus on their policy priorities. Manchin told reporters Tuesday he and Biden did not discuss top-line numbers during an Oval Office meeting earlier in the day.
House Speaker Nancy Pelosi recommitted Tuesday to hold a vote Thursday on the bipartisan infrastructure deal, deeming it a “moral imperative” in a letter to her chambers’ Democrats. Her decision provoked socialist Vermont Sen. Bernie Sanders, who implored liberal Democrats not to back it.
“No infrastructure bill should pass without a $3.5 trillion reconciliation bill. That is the agreement that was made & that is the agreement that must be kept,” he tweeted. “Physical infrastructure is important, but the needs of working families & combatting [sic] climate change is more important.”
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Pelosi’s dumping of the Democrats’ so-called “two-track” approach to infrastructure legislation also revealed a lack of communication with Senate Majority Leader Chuck Schumer. Schumer told Senate Democrats during a closed-door lunch Tuesday that the speaker did not consult him before sending her “Dear Colleague” letter, according to reports.
