How Democrats Could Hide $2 Trillion in New Spending With Budget Gimmicks – Opinion

As a $3.5 billion spending plan, President Joe Biden’s “Build Back Better” budget of $3.5 trillion seems very unlikely.

The final bill, however, will likely have a spending total of less than 2 trillion dollars. Biden admits this now. But it could have up to $2 trillion in additional, hidden costs, too—thanks to at least two potential changes that one budget watchdog group calls “blatant” gimmicks involving the expanded child tax credit and the Affordable Care Act.

Democrats have been reported to be considering an extension for the extended child tax credit. It pays parents $3,000 per child and $600 more for those under six years. The refund is available even to families with no federal taxes. Biden had previously proposed a five year extension to the child credit. The five-year extension of the child tax credit was, as I explained in September, a budget trick designed to show that it is roughly $700billion less costly than it would otherwise be within the 10-year standard budget window. The Democrats signaled that the extended child tax credit was permanent but only half of its actual cost would they have to do so.

This “gimmick”, if extended for one year, would mean that it is even more difficult to push the button.

Similar to the Pandemic, Democrats may also consider a shorter extension of Obamacare’s expanded subsidies. Instead of being extended permanently, those provisions would technically expire after three years—even though everyone knows they are likely to be extended past that sunset date.

Maya MacGuineas is president of the Committee for a Responsible Federal Budget, a non-profit that promotes balanced budgets. The CRFB projects that future spending could be hidden by the two “blatant budget gimmicks”, which include the Obamacare subsidy and the child tax credit. This depends on how other trade-offs are made. Even if $1.9 trillion is the final bill and there’s no need for borrowing, the CRFB says that it may be $4 trillion. Many of these hidden costs are financed with deficits.

As ReasonPeter Suderman, the spokesman for the House, explained that this type of legislative trickery is shameless, but also timid. It requires both deception and implicit acknowledgment of deception. This is not an original or partisan tactic. Similar gimmicks were used in both the Affordable Care Act (2017 Republican tax bill) and the 2017 Republican Tax Bill, which prevented an accurate accounting of the budgetary effects over the usual 10-year period.

The temporary extension of major programs is subject to political risks. Republicans decided in 2017 that their tax cuts would expire in 2025. This was because they believed that even with Democrats in control, Congress would still be open to raising taxes. The Republicans also assumed that the extension would become a reality. Democrats will now bet that Republicans don’t destroy the child credit, either next year, nor in five years. A temporary program is better than nothing.

The short-term extensions can also provide political opportunities. Many Democrats realize that an extension for a brief period of time to the child tax credit can make it a perennial campaign issue. Democrats are able to contest every other year with the promise of it being extended.

You are opportunistic, scared, timid and risk-averse. All of these are budget shenanigans.

They are also very expensive.