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Commentary By Brian Riedl

Dems Will Use These Tricks to Make the $3.5T Spending Bill Seem Smaller

Economics Tax & Budget

President Biden and Speaker Nancy Pelosi attempt a last-ditch effort to rally Democrats to fully support the $3.5T spending bill.

How does Congress cut a $3.5 trillion spending bill down to $1.5 trillion? By using gimmicks to hide its true cost.

That is the approach that congressional Democrats are brazenly employing to make their spending bonanza appear smaller than it is. Rep. Pramila Jayapal (D-Wash.) openly discussed their use of budget gimmicks over the weekend when she told CNN that “our idea now is to look at how you make them funded for a little bit of a shorter time.”

Progressives have been abusing these gimmicks from the start. They began with a reconciliation proposal that would cost nearly $5 trillion over the decade. Then, in order to cut the bill’s “official” cost closer to $4 trillion, the bill’s authors included a December 2025 expiration of the $130 billion annual expansion of the child tax credit to $3,000 per child (or $3,600 for children under the age of 6). This made the 10-year cost of the proposal appear $750 billion smaller.

Of course, no one believes that Congress will actually allow the child tax credit to be reduced at the end of 2025, and progressives have declared this policy one of the cornerstones of their long-term antipoverty agenda. In fact, Democrats purposely selected for “expiration” a popular middle-class benefit that they know even a future Republican Congress or president would not dare take away from voters. Congress already renews a small group of expiring tax policies each December, and this is expected to become an expensive addition to that list.

While Jayapal asserts that Sen. Joe Manchin’s (D-WV) limit of $1.5 trillion in new reconciliation bill benefits is “not going to happen,” she and other Democrats are discussing scaling back their proposal even further by simply stuffing the same level of annual spending into a smaller number of years. This means that expensive child care subsidies, family leave, and “free” community college benefits may also have their full cost hidden with fake expiration dates early into the 10-year scoring window. Lawmakers fully expect to extend these policies later, ultimately raising the cost of the total reconciliation bill closer to the $3.5 trillion target (or even higher).

Progressives are also discussing delaying the proposed new Medicare dental benefits until 2028, which legitimately saves money within the 10-year scoring window but also hides a larger long-term cost.

To be sure, Republicans play this game too. The 2017 (and 2001) tax cuts included expirations of some of the more popular middle-class tax cuts in order to shave the 10-year cost and also comply with the reconciliation requirement that deficits not drastically expand in future decades. However, most of the 2017 tax cut expirations were scheduled for the ninth year of the 10-year window, and thus provided a few hundred billion in fake savings. This year’s Democratic tricks may cost trillions of dollars.

Will voters — and senators demanding a lower cost — fall for these gimmicks?

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Brian M. Riedl is a senior fellow at the Manhattan Institute. Follow him on Twitter here.

This piece originally appeared in New York Post