Dems using ‘gimmicks’ to hide spending

Dems using 'gimmicks' to hide spending

​The US Chamber of Commerce has accused Democrats of using accounting “gimmicks” to hide more than $1 trillion ​​​in spending in President Biden’s Build Back Better social spending bill, and cautioned lawmakers against voting on the package without knowing its “true cost.”

“We have the highest inflation in 31 years, employers are struggling to fill a record number of job openings, and the current draft of the reconciliation bill uses gimmicks to cover up well over $1 trillion in spending,” Chamber Executive Vice President and Chief Policy Officer Neil Bradley​ said in a statement Wednesday.

“It would be the height of irresponsibility for Members of Congress to vote on this multi-trillion-dollar tax-and-spend bill with no clear understanding of its true cost or the real-world impact of the policies,” he added.

The House passed a bipartisan Senate-approved $1.2 trillion infrastructure deal last week, but the $1.75 trillion spending package is being held up ​in the House while Democratic members await an analysis of its costs by the nonpartisan Congressional Budget Office.

Chamber Executive Vice President and Chief Policy Officer Neil Bradley
Chamber Executive Vice President and Chief Policy Officer Neil Bradley issued to warning statement on Wednesday.

The Chamber’s letter, which was sent to every member of Congress, noted that the Build Back Better legislation includes provisions that could be extended by a future Congress, significantly adding to the bill’s potential cost down the road.

“As currently drafted, the reconciliation bill would expand or create new entitlement programs and refundable tax credits, but then sunsets many of these programs – in some cases after just one year – to disguise the true cost of the bill​,” the letter said.

“​Given that the bill’s proponents clearly intend for these programs to continue past their sunset, lawmakers should be provided with a Congressional Budget Office estimate of the true cost of the bill if these programs were permanent​,” it continues.

The problem programs cited by the Chamber are universal childcare and preschool, which is set to sunset in 2027; an expanded version of the child tax credit, set to expire next year; and the reduction of premiums for Americans who purchase health care through marketplaces set up by the Affordable Care Act. That provision is due to expire in 2025.

“Experts at the Penn Wharton School at the University of Pennsylvania have estimated that if these programs were made permanent, the actual cost of the spending included in the bill would be $4.1 trillion,” the letter warned.

A graph comparing White House cost estimates with economists' estimates.
The letter claims that the bill “sunsets” policies to disguise their true cost. Here, White House estimates are compared to estimates by Penn-Wharton experts.

The Chamber went on to complain that other parts of the bill “front-load spending in the early part of the ten-year window” laid out by lawmakers.

“For example, over $20 billion is provided for workforce training and related education programs, but most of that money is only available through 2026,” the letter said. “A true accounting of the bill’s cost requires identifying which provisions are intended to be permanent and calculating the cost without any arbitrary sunset.”

The Chamber also called for more transparency on how the bill would affect inflation and worker shortages.

“Today, a labor shortage crisis is one of the biggest factors holding back an economic recovery. Employers, especially small businesses, report unprecedented difficulty in filling open positions. Yet, there is no analysis of how the reconciliation bill would impact labor force participation,” it said.

“Some provisions, like childcare assistance, could, if structured correctly and not arbitrarily sunset, increase workforce participation while other provisions that increase transfer payments without requiring that recipients work will dampen participation,” the letter said. 

Democrats have tried to reduce the size of the bill from its initial $3.5 trillion price tag over objections from moderate House Democrats as well as Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-Ariz.). At the same time, many Democrats have expressed hope that the American people would get used to the programs and pressure Congress to make them permanent. 

The CBO on Wednesday released reports on four parts of the bill – contributed by the House Homeland Security, Science, Small Business, and Veterans Affairs committees – that it said “would not increase on-budget deficits after 2031,” but it has also noted that a full report will take more time.

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