By Katabella Roberts
President Joe Biden’s “Build Back Better” legislation, if passed through Congress, would increase the U.S. deficit by $367 billion over 10 years, the Congressional Budget Office (CBO) said Thursday.
That estimate does not include the additional revenue that could be generated from tax enforcement activities, which the CBO suggested would be $207 billion in the next 10 years.
The nonpartisan federal agency’s $207 billion figure is far less than the White House’s $400 billion “conservative” estimate, which it plans to achieve through raising the minimum tax of 15 percent on the income the most profitable companies report on their books.
Overall, the CBO estimates the legislation would spend $1.63 trillion. The agency said changes to the tax code and other provisions would generate more than $1.26 trillion in revenue.
Meanwhile, some of the CBO figures were lower than those estimated by the Biden administration, including the cost of universal pre-K and affordable child care, which the agency found would amount to roughly $382 billion, compared to the bill’s estimate of $400 billion.
Prescription drug reforms would save nearly $300 billion, as per the CBO, which is $50 billion more than the White House estimated. The CBO also estimated that a four-week paid leave included in the House version of the bill would cost $205 billion. Lawmakers removed paid leave from the bill before later partially reinstating it.
Both the CBO and the White House provided relatively close estimates for things like affordable housing related costs, which have a figure of roughly $150 billion. The CBO said expanding Medicare to include hearing would cost $36 billion, while the White House said it would be $35 billion.
Biden’s signature social spending plan—costing $1.75 trillion—moved closer to a final vote on Thursday but House Speaker Nancy Pelosi (D-Calif.) and other lawmakers said Thursday they would only proceed to a final vote on the bill “as soon as” CBO released its final budget estimates for review by House members.
The White House welcomed the CBO’s report Thursday, calling it “good news for Democrats,” despite the worse-than-expected findings, CBS reports.
Treasury Secretary Janet Yellen also welcomed the CBO’s analysis, noting that, “the combination of CBO’s scores over the last week, the Joint Committee on Taxation estimates, and Treasury analysis, make it clear that Build Back Better is fully paid for, and in fact will reduce our nation’s debt over time by generating more than $2 trillion through reforms that ask the wealthiest Americans and large corporations to pay their fair share.”
“A particularly salient aspect of the revenue raised by the legislation is a historic investment in the IRS to crack down on high-earners who avoid paying the taxes that they owe, which Treasury estimates would generate at least $400 billion in additional revenue,” the Treasury Secretary said in a statement published Thursday.
Meanwhile, the Joint Committee on Taxation earlier this month estimated the bill would raise about $1.5 trillion in revenue although its analysis did not include how much tax enforcement provisions would generate.