November 18, 2021
The House of Representatives could be voting on the estimated $1.75 trillion Build Back Better bill by tomorrow. Debate is already underway.
But there’s been one little hang up for the last few weeks that has put a stop to the progress.
Some moderate democrats are holding their votes until the CBO score is released. So what’s that and who is the CBO?
First, the Build Back Better bill is the one that some call the “human infrastructure bill” or the bill that expands the social safety net. It includes several items like the monthly child tax credit extension, the expansion of Medicare and Medicaid, and universal Pre-K…just to name a few.
So, back to the CBO. The CBO is the Congressional Budget Office. A non-partisan office established by a 1974 law to provide objective, nonpartisan information that would support the budget process. Basically the CBO takes the politics out of the lawmaking and boils it down to dollars and cents… How much will this law cost in the immediate future and over its lifetime?
The CBO is required by law to produce a formal cost estimate for nearly every bill that is approved by a full committee of either the House or the Senate. Those cost estimates are only advisory. The CBO is not an enforcement entity; the budget committees do the enforcing. The CBO also does not make policy recommendations.
So why do we care? Well, first we know Republican leadership in the House and Senate say they will not support this bill. So Democrats know they’re on their own to pass it through a process called budget reconciliation. That means almost every single Democrat and Independent has to vote yes. And right now…they don’t have the votes in the House or the Senate.
Moderate Democrats are concerned about the projected cost of this $1.75 trillion bill over its 10 year lifetime. The White House insists it’s “fully paid for” because of increased taxes for corporations and the wealthiest Americans and enhancements to the IRS. But – it’s possible – the CBO won’t agree.
The CBO says it’ll release its full assessment of the Build Back Better bill and score no later than the end of business on Friday, November 19. It definitely could come before.
It’s worth noting – when the trump tax cuts were being debated, the then Treasury Secretary Steven Mnuchin claimed that the tax law would not only pay for itself through higher growth, but would reduce the deficit by a trillion dollars. The c-b-o at the time actually projected that the tax cut would add $1.9 trillion dollars to the deficit over 10 years, even after accounting for any growth effects.
So this contradiction happens all the time.
PLUS
UPDATE: House leadership postpones the Build Back Better bill saying they will NOT vote for this bill in the middle of the night. House Minority Leader Kevin McCarthy has been speaking (and at times yelling) for HOURS on the House floor railing against this bill. This tactic contributed to the vote delay.
Surprise – the CBO report is out early – and the house says because of that – they want to vote on the Build Back Better bill as soon as tonight.
The congressional budget office released its full assessment report on the bill a little while ago.
For those of you who don’t know what the CBO is or why this report is important – please go watch the video right before this one.
So what did the CBO find? Well – a lot. But the most important number – is $367 billion. The report says build back better would increase the federal budget deficit by $367 billion from 2022 to 2031… which is the lifetime of the law if passed. But the CBO also pointed out – that it did not include the revenue that could come into the government from several of the key proposals in the bill– like giving the IRS the power to go after people who are not paying their taxes among others. The White House claims the IRS enforcement alone would generate about $400 billion in revenue. The CBO says it may be more like $207 billion.
But the CBO report says there are other projected revenue streams include in the bill that could also reduce that $367 billion dollar number even further but the CBO technically can’t score those.
The House lawmakers continue to debate this bill on the floor. As soon as they make a decision about the vote timing, I’ll let you know.
Also it’s important to understand it’s very possible this bill will change and the proposals in it will shift when it gets to the Senate. Nothing is done yet.
Read the CBO report here.
