According to the impartial Congressional Budget Office, President Biden’s massive climate change and social policy package will raise the federal budget deficit by $160 billion over the next ten years.
This decision contradicted Mr. Biden’s vow to fully fund the $1.85 trillion package, but it seemed unlikely to prevent House Democrats from passing it.
Intentions to do so were thwarted Thursday evening when the minority leader, Representative Kevin McCarthy of California, delivered a long address that caused Democratic leaders to send members home with plans to reconvene at 8 a.m. on Friday.
According to the budget office’s study, the bill’s tax cuts and spending program were nearly – but not totally – offset by new income and expenditure cutbacks. The program would be mostly funded by tax hikes on high-income individuals and businesses, which were expected to raise over $1.5 trillion over a ten-year period. Another $260 billion is expected to be saved in government spending on prescription medications.
The fact that now the bill may slightly increase the federal deficit within next ten years was unlikely to deter House lawmakers from voting for it, in part because the debate boiled down to a disagreement over a single line item: how much the Internal Revenue Service would collect by cracking down on people and businesses who avoid paying large tax bills.
The budget agency estimated that the law will add $367 billion to the government deficit over a ten-year period.
However, that projection did not include the $207 billion in additional revenue that the agency believes the I.R.S. will eventually recover from tax evaders. These revenues would reduce the estimated deficit to $160 billion over a ten-year period.
The predicted money generated via I.R.S. financing was significantly less than the $400 billion the White House estimated it would bring in over a decade, both through enforcement actions and frightening tax cheaters into paying what they owe.
The budget office’s forecasts, according to White House officials and former IRS commissioners, are too cautious.
To use the White House’s I.R.S. revenue predictions, the whole package would actually lower the deficit by $112 billion.
Democrats, who have crammed the package with long-desired objectives and policy reforms, took turns touting the measure’s environmental features, health-care expansion, and assistance for education and child care on Thursday.
Speaker Nancy Pelosi touted the areas of agreement established by Democrats in both the House and the Senate, including universal prekindergarten, extensive child care support, prescription medication price restrictions, and home health care for the elderly.
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