C.B.O. Finds Bidens Spending Bill Not Fully Paid For – The New York Times
There were bright spots for Mr. Biden and his party in the budget office analysis. It confirmed that in the eyes of the congressional scorekeepers, the Democratic bill would add significantly less to deficits over a decade than the large collection of tax cuts Republicans passed under President Donald J. Trump in 2017. The budget office initially estimated that those tax cuts would add about $1.5 trillion to deficits, even as Republicans claimed their cuts would pay for themselves.
The single biggest source of revenue stems from a new 15 percent tax that would apply to corporations that report more than $1 billion in profits to shareholders but not the I.R.S. The budget office found that a tax on so-called book income would raise about $319 billion over 10 years.
Senator Elizabeth Warren, the Massachusetts Democrat who proposed the new tax, released an analysis on Thursday morning showing that at least 70 of the largest companies in the United States would pay more as a result of the new levy. The report by Ms. Warren found that the tax would require companies such as Amazon, Facebook, FedEx, General Motors, Google, T-Mobile and Verizon to pay more to the U.S. government.
The analysis also suggests that the Democratic plan could begin to reduce budget deficits a decade from now, if provisions in the bill expire as scheduled. The bill’s tax increases are permanent, while many of its tax cuts and spending programs are set to be temporary, a move that Republicans have criticized as a budget gimmick intended to keep the overall cost down.
“Here what we’re doing is making smart long-term investments but offsetting those with tax increases,” Brian Deese, the director of the National Economic Council, said Sunday on ABC’s “This Week.” “When you do that, a fully paid for, you actually reduce the deficit over the long term.”
If a future Congress chose to extend those spending programs and tax cuts, though, or to make them permanent, and did not offset them with further tax increases, the bill would add significantly to deficits after a decade. Budget experts have warned of that possibility, which was also true of the Republican tax law. It set individual tax cuts to expire after 2025, even though Republicans immediately vowed to work to make them permanent.
Biden’s Social Policy Bill at a Glance
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A proposal in flux. President Biden’s social safety net and climate bill is back on hold, though the House plans to vote on the $1.85 trillion spending plan the week of Nov. 15. The details are still being worked out, but here’s a look at some key provisions:
Republicans have accused Democrats of gaming the budget rules by providing child care and health care tax credits and universal preschool that would expire but which Democrats hope will be made permanent. A new $80,000 cap on the state and local tax deduction would slip back to $10,000 for a year in 2030 before it expired the following year.