Democrats, including President Joe Biden, are now trying to sell the $3.5 trillion spending package by claiming the massive bill “costs zero dollars.”
What are the details?
Over the weekend, Biden shared a message from his Twitter account claiming the bill has no cost — despite its massive $3.5 trillion price tag.
“My Build Back Better Agenda costs zero dollars,” Biden tweeted. “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.”
My Build Back Better Agenda costs zero dollars. Instead of wasting money on tax breaks, loopholes, and tax evasi… https://t.co/3KGPRqKcBh
— President Biden (@President Biden)1632616471.0
White House spokesperson Andrew Bates told Axios on Friday, “The bill’s price tag is $0 because it will be paid for by ending failed, special tax giveaways for the richest taxpayers and big corporations, adding nothing to the debt.”
Rep. Pramila Jayapal (D-Wash.), chairwoman of the Congressional Progressive Caucus, repeated the erroneous claim during an interview Sunday on CBS News’ “Face The Nation.”
“President Biden also said something very important the other day, which is, this is a zero-dollar bill because it’s going to be completely paid for with taxes on the wealthiest and the largest corporations,” Jayapal said.
Washington Post columnist Catherine Rampell boasted a similar claim Sunday on CNN’s “Reliable Sources.”
“The bill itself will not cost $3.5T in the sense it will be entirely, or at least partly, paid for. So the actual cost, in terms of deficits, will be smaller than that, perhaps even zero, although I think that’s unlikely,” Rampell claimed.
What is the truth?
As CBS News host Margaret Brennan told Jayapal, the massive spending package that Democrats want to pass, hardly knowing everything that is in it, does not cost zero dollars.
“The joint committee on taxation says actually that, in raising this revenue, taxes could go up at least 2% on those making between $200,000 and $500,000 a year,” Brennan explained. “It also will raise taxes for corporations and those who are wealthier. So it’s not no cost.”
The Wall Street Journal aptly characterized Democrats’ new talking point as the “the largest tax increase as a share of GDP and the largest entitlement expansion since the 1960s costs nothing. And money grows on trees.”
In fact, according to the WSJ, the proposed tax increase does not even cover the spending Democrats have proposed.
In the real world, Congress’s Joint Committee on Taxation says the bill raises $2.1 trillion over 10 years. Somebody must be paying more. Among the tax hikes are a 5.5 percentage point increase in the corporate income tax rate that will be paid by workers in lower wages, consumers in higher prices and investors in lower returns. Though they’ll be pleased to know this all adds up to “zero dollars.”
As for the spending, the $3.5 trillion figure that Bernie Sanders considers a “compromise” doesn’t even capture the full cost of what Democrats are proposing. As we explained Friday, that amount is based on budget gimmickry including entitlement phaseouts and phase-ins, and the real cost will be at least $5 trillion, probably far more.
So even after $2.1 trillion in tax hikes, the entitlements in the reconciliation package that include the child allowance, college tuition, national pre-K, universal child care, expanded Medicare and a new Medicaid program will add to the U.S. debt for decades to come.
Even if Democrats found enough mon….