FACT CHECK: Would Joe Biden’s Build Back Better Agenda ‘Cost Zero Dollars’?
President Joe Biden claimed in a Sept. 25 tweet that his Build Back Better agenda “costs zero dollars” and will add “zero dollars to the national debt.”
My Build Back Better Agenda costs zero dollars.
Instead of wasting money on tax breaks, loopholes, and tax evasion for big corporations and the wealthy, we can make a once-in-a-generation investment in working America.
And it adds zero dollars to the national debt.
— President Biden (@POTUS) September 26, 2021
It is preemptive to claim the budget reconciliation bill will have “zero cost” and add “zero debt,” as the final version has yet to be released or rated by the Congressional Budget Office. Of the experts Check Your Fact contacted, the majority were skeptical the bill would be cost neutral. The most credible nonpartisan review of the agenda, from the Committee for a Responsible Federal Budget, estimated it could raise the debt to anywhere between 119% and 129% of Gross Domestic Product by 2031.
Biden’s tweet came a day after he claimed in a speech that the price tag of the Build Back Better Act was actually “going to be zero” because the government is “going to pay for everything we spend.” House Speaker Nancy Pelosi echoed Biden’s claim on Sept. 29, saying, “The dollar amount, as the president has said, is zero. This bill will be paid for.”
Congressional Democrats are currently working to pass the Build Back Better Act through reconciliation, a move that would not require them to get votes from Republicans, The Hill reported. The legislation has not yet reached a definitive form, but a preliminary $3.5 trillion version proposes growing programs in health care, education and other areas that would supposedly be paid for by measures such as increasing taxes on high-income earners and corporations, according to the Associated Press.
Check Your Fact reached out to multiple experts for their takes on Biden’s claim. Some of them declined to make cost projections on the Build Back Better Act until its provisions have been finalized, while others expressed skepticism that the plan would pay for itself. (RELATED: Did Nancy Pelosi Tweet, ‘I Will Be Introducing Legislation To Welcome United Nations Peacekeepers Into The United States’?)
Dr. Michael Boskin, a Stanford University economist and senior fellow at the conservative-leaning Hoover Institution, provided this perspective:
While there is not yet any clear indication of what will be in the final bill, either on the spending or tax side, nor is there a CBO score, the provisions most consistently described in public reporting would 1) result in a substantial increase in the national debt, of about $1.5-3.0 trillion over the next ten years, depending on whether the many temporary provisions become permanent; and 2) because of the likely negative effect on the economy’s growth from the many large increases in marginal tax rates, especially on capital formation, the longer term increase in the national debt would grow considerably larger. The debt is already too large for safety and is already projected to increase considerably because of growing unfunded entitlement spending.
Federal tax economist Alex Durante of the conservative-leaning Tax Foundation said his team’s modeling of the Build Back Better agenda found it would not be “revenue neutral over the next ten years (through 2031).”
“We found that the tax proposals under the plan would raise about $2 trillion in revenue, which would not be enough to offset the $3.5 trillion cost of the bill,” he told Check Your Fact via email. “My understanding is that the administration is claiming the remaining savings will be made up through drug pricing reform and economic growth effects from increased spending, but I would characterize such estimates as wildly optimistic. The plan will almost certainly add somewhere between $1 trillion and $2 trillion to the national debt.”
The progressive-leaning Center for American Progress (CAP) said in a report that the budget resolution approved by Congress in August that would be enacted as the reconciliation bill “allows for a fully financed bill – and even one that reduces deficits.” The CAP report argued Biden’s previously-unveiled American Jobs Plan and American Families Plan, collectively called the “Build Back Better agenda,” would be “fully paid for over less than 15 years” and “would reduce deficits by $1.7 trillion over 20 years.”
The non-partisan Committee for a Responsible Federal Budget (CRFB) in August released an analysis of the bipartisan infrastructure bill and borrowing permitted by a just-passed Senate reconciliation resolution. The bipartisan infrastructure bill, which is currently in the “resolving differences” phase, would add an estimated “$256 billion to projected deficits” over the 2021-2031 period, according to the Congressional Budget Office. The CRFB has posited the infrastructure bill could actually add nearly $400 billion to the deficit.
In the CRFB analysis, the organization said the Build Back Better agenda could have a total potential net cost of $4.28 trillion. It also noted that Congress had the ability to borrow up to $1.75 trillion for the reconciliation package and that the possible future extensions of temporary measures in the reconciliation package could rack up another $1.9 trillion with interest.
Check Your Fact asked C. Eugene Steuerle, an Urban Institute fellow and former deputy assistant secretary of the U.S. Department of the Treasury for Tax Analysis, if the Build Back Better Act’s provisions would result in a national debt increase. (RELATED: Facebook Post Claims The U.S. Has The Fourth-Highest Poverty Rate In The World At 17.8%)
“It’s complicated,” he stated. “Deficits go up for a few years. Then some of the items in the agenda basically end, such as the increase in the child credit and later on some of the clean environment credits. At that point some permanent increases in tax continue, grow somewhat with the economy, and would be larger than the spending increases, so annual deficits would fall. After enough years, technically speaking, if that was all that happened, the spending increases and tax cuts would be paid for mainly by the tax increases.”
However, Steuerle said many of the agenda’s items such as child tax credits were clearly intended to be extended, with estimates presuming an end to the 2017 tax cuts. He also noted that “rising deficits in Social Security and Medicare are not addressed, so the overall budget deficits (not just those arising from this legislation) would increase.”
“On the third hand, The Republicans never claimed that their net tax cuts in 2017 paid for themselves, except through extreme supply side effects (and the greater growth they would create),” he continued. “So, both parties have been at this game for a while. “
Check Your Fact reached out to the White House for comment about Biden’s claim that his plan would cost “zero dollars” and did not receive a response by the time of publication.