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As currently written, the Build Back Better bill would add about $158 billion to deficits over 10 years. Major spending would go to child care and child tax credits, among other things.
Republicans asked the Congressional Budget Office to estimate what would happen if temporary programs in the bill were extended through all 10 years.
The bill being considered in the Senate sets time limits on those programs. It would be up to a future Congress to determine whether to change those limits.
Republicans have been highlighting a recent government estimate of what they say is the true cost of the Democrats’ Build Back Better bill, which includes major spending on child care and child tax credits.
On Fox News Sunday, Sen. Lindsey Graham, R-S.C., told departing host Chris Wallace that the bill is far more expensive than Democrats claim, and the money it raises falls trillions short of covering the cost.
"The Congressional Budget Office says it's not paid for," Graham said Dec. 12. "It's $3 trillion of deficit spending."
Graham is incorrect. The bill passed by the House and now in the Senate’s hands costs about $1.75 trillion, and, according to CBO figures, would add $158 billion to the deficit over 10 years, not $3 trillion. (President Joe Biden and other Democrats say even that smaller deficit would evaporate thanks to IRS crackdowns on tax evaders.)
Graham is saying the deficit would be 20 times larger than the bill at hand. That’s like the difference between a grape and a big cantaloupe.
So, what is Graham talking about?
Graham and his Republican counterpart in the House asked the CBO to estimate what would happen if temporary spending programs in the legislation were extended through 2031. The major spending provisions include a bigger child tax credit and support for child care.
Graham’s press office sent us a Dec. 10 letter from the CBO. The agency did say the deficit would go up by $3 trillion, but that was for, as they put it, "a modified version of H.R. 5376, the Build Back Better Act."
Modified means the CBO scored a bill that’s different from the one on the table.
"These estimates do not reflect what is actually written in the Build Back Better Act nor its official cost for scorekeeping purposes," the deficit hawk group Committee for a Responsible Federal Budget wrote. "Lawmakers may choose to allow some provisions to expire, to extend some as written, and to modify some."
To unpack this — just a little bit — Congress passed a budget resolution that set a ceiling on how much, if any, a bill like Build Back Better could add to the deficit. When the CBO scored the bill as adding $158 billion to the deficit, the Democrats were well below the ceiling they had set. (Technically, the CBO said the bill added $365 billion, but it also figured that IRS enforcement would help offset that by $207 billion.)
Those CBO estimates have legal power. If they show that a bill exceeds the limits in the budget resolution, any senator can call for a higher hurdle 60-vote supermajority to move it forward.
To keep costs in check, Democrats made a number of programs temporary. In dollars, a one-year increase in the child tax credit is the biggest example. As passed, that provision added $185 billion to the deficit. It ends after 2022, but if it lasted through 2031, it would add nearly $1.6 trillion.
Other big ticket items in the Democratic package are the subsidies for child care and preschool (ending after 2027), raising the limit on state and local tax deductions (ending after 2025), and health insurance subsidies (ending after 2025 and 2026).
While there would be political pressure to extend some or all of these changes, there’s no way to predict today what would happen. Certainly, if Republicans were successful in the 2022 midterm elections, they would likely have the clout to defeat any effort to extend them if they wanted to.
Former CBO director Douglas Holtz-Eakin, head of the American Action Forum, a right-of-center policy group, said it’s commonplace for lawmakers in the minority party to ask the CBO to score something that isn’t in a bill. Holtz-Eakin said he received and fulfilled those requests all the time.
Unlike the CBO estimates of actual legislation, those what-if estimates have no weight except for purposes of debate and offering amendments.
As for the tactic of making certain provisions temporary to contain the overall cost of a bill, that’s something Republicans have used themselves. In the Republicans’ 2017 Tax Cut and Jobs Act, individual income tax cuts ended after 2025. Graham voted for that bill.
"Their budget resolution said you can’t add more than $1.5 trillion in deficits in the budget window," Holtz-Eakin said. "They were going to do that, so they sunsetted provisions of the income tax, along with a few other provisions."
In 2017, the CBO told Congress that the Tax Cut and Jobs Act would add a bit over $1.45 trillion to the deficit. That was the estimate before the vote to pass the bill. In reality, the law has ended up adding nearly $2 trillion to the deficit.
Graham said the CBO predicted the Build Back Better Act would add $3 trillion to deficits over 10 years.
He’s referring to a bill that’s not the Build Back Better Act. At Graham’s request, the CBO looked at the impact of extending the temporary programs in the bill for a full 10 years. That is an assessment of a hypothetical situation, not the bill at hand.
We rate this claim False.
Fox News, Fox News Sunday, Dec. 12, 2021
Congressional Budget Office, Fall 2021 Reconciliation, Dec. 10, 2021
Congressional Budget Office, Letter to ranking Budget Committee members, Dec. 10, 2021
U.S. Congress, S.Con.Res.5 - A concurrent resolution setting forth the congressional budget for the United States Government for fiscal year 2021 and setting forth the appropriate budgetary levels for fiscal years 2022 through 2030, Feb. 5, 2021
Congressional Budget Office, H.R. 1, the Tax Cuts and Jobs Act, Nov. 13, 2017
Center for Budget and Policy Priorities, Policy Basics: Introduction to the Federal Budget Process, April 2, 2020
Congressional Budget Office, Letter on including IRS enforcement, Dec. 8, 2021
Committee for a Responsible Federal Budget, CBO Estimates a Permanent Build Back Better, Dec. 10, 2021
Interview, Douglas Holtz-Eakin, president, American Action Forum, Dec. 13, 2021
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