With the Democrats’ precious bill at stake, a numbers game looms

WASHINGTON (AP) – Like Hercules and his 12 labors, the $ 1.85 trillion Democratic packages of social and climate initiatives appear to be affected by a maddening parade of obstacles.

Up ahead looms the Congressional Budget Office, which could cause problems that would be complicated but likely surmountable.

The office, created in 1974 as a nonpartisan tax scorer in Congress, is working on a 10-year cost estimate for the bill and its component tax and spending proposals.

The key question politically is how close the measure is to pay for itself with savings, as President Joe Biden and leading Democrats claim.

Here’s a guide to understanding the numbers storm CBO is about to unleash:

After months of backbiting and bargaining among Democrats, House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer face the same stubborn problem.

Faced with unwavering Republican opposition, Democrats cannot lose votes in the Senate and only three in the House to pass your gigantic bill.

That gives Sen. Joe Manchin, DW.Va., and his moderate House counterparts significant leverage.

Among other things, the centrists want the savings from the measure, mainly tax increases for wealthy people, large corporations and companies doing business abroad, to pay in full for their family services, health care, and environmental programs.

Five moderates prevented the House from voting on him last week. They demanded to see CBO’s official estimate of the bill first, primarily to see if the agency thinks it would worsen already huge federal deficits.

Many centrists come from districts where accusing Democrats of exacerbating budget deficits is easy for the Republican campaign to attack.

In a compromise with progressive centrists said they would vote on the bill if the CBO’s figures are “consistent” with preliminary White House estimates that the measure paid for itself. They promised to try to resolve the “discrepancies” if the CBO numbers were worse.

Pelosi, a Democrat from California, hopes to finally push the measure through her chamber next week. The Senate will surely change the bill and its work will take longer.

WILL THE CBO NUMBERS HELP THE DEMOCRATS?

The budget office has released estimates on parts of the legislation of 2,100 pages. He has promised general figures “as soon as possible, but the exact moment is uncertain.”

That means a full score on the invoice may not be ready next week.

If that’s the case, would House moderates accept partial CBO numbers or cost estimates from another source? Demand new guarantees from Biden and Pelosi? Do you insist on changing the invoice or delaying it again?

That is not clear. Concerns about worsening inflation can only intensify the scruples of the moderates.

In a reassuring report for Democrats, the Congressional Joint Tax Committee, which works with CBO and produces nonpartisan estimates on tax legislation, said last week that the measure would raise $ 1.5 trillion in new revenue over the next week. decade. That alone would cover most of the cost of the legislation.

However, there is another complication.

Unlike the initial White House estimate, the CBO score may show that the bill is not fully paid. It follows stricter rules for making calculations than the White House, which, regardless of which party holds the presidency, almost always produces more optimistic numbers than the CBO.

For example, the White House estimated that by increasing the IRS tax application, primarily targeting the highest earners, by $ 80 billion over 10 years, the bill would raise $ 480 billion in additional revenue.

Under the guidelines the CBO follows, you are not expected to credit the invoice with the savings from more stringent tax audits. In any case, the budget office projected in September that giving the IRS $ 80 billion would generate just $ 200 billion in additional revenue.

BUT REMEMBER, THIS IS CONGRESS

Even if the CBO figures are not good, there is reason to believe that the bill will survive. When lawmakers have reached a political consensus to do something, bad budget figures rarely reverse it.

Democrats know that sunk legislation that carries Biden’s top national priorities would threaten disaster in next year’s Congressional elections. At key moments like that, Congress is known for its political and budgetary prowess.

Although CBO figures determine the official price of a bill, Democrats could simply talk about better figures from the White House or elsewhere to paint a brighter fiscal picture. That’s what Republicans did in 2017 when they claimed their huge tax cut would pay for itself, even though CBO projected it would worsen deficits by more than $ 1 trillion.

If the bill’s savings are insufficient, but Democrats find the political payoff for passage irresistibly strong, they might decide to swallow some red ink and insist that the bill would boost the economy. CBO said the bipartisan $ 1 trillion infrastructure bill, that Biden plans to sign on Monday will increase deficits by $ 256 billion over the next decade, but nearly all Democrats and some Republicans backed him anyway.

If necessary, Democrats could modify some of the tax provisions of the measure to raise more revenue. Moderates could try to force progressives to accept additional spending cuts on a bill that has already been lowered from a previous price tag of $ 3.5 billion. That would meet stiff resistance from progressives who say they have committed enough.

AND THEN THERE ARE GIMMICKS

The huge bill has many provisions that help keep its price in check.

Many of his priorities don’t start right away or are temporary, although Democrats hope they will eventually become permanent. Since the cost of legislation is measured over 10 years, that effectively makes those programs seem more affordable.

The most generous tax credits for children and many low-income workers extend for just one year. Subsidies for the purchase of private health insurance would last four years, while benefits for free universal preschool education and reinforced child care would last six years. New Medicare hearing benefits would begin in 2023, the family leaves paid in 2024.

The nonpartisan Committee for a Responsible Federal Budget, which advocates for fiscal discipline, has estimated that the total price of the measure could exceed $ 4 trillion if its temporary programs were made permanent.