3 Principles For A Better Build Back Better Bill

Retirement

The other day, my teenage son announced we should all support the Build Back Better Bill because it was so much fun to say. So how about a Better Build Back Better Bill?

And, yes, these principles are, admittedly, wishful thinking, centering on good governance rather than “ways to make voters happy and win elections.” It is without a doubt the case that for many supporters, the only acceptable “principles” are tactics that move them closer to accomplishing their objectives. But nevertheless, I offer to readers the following.

Principle 1: Don’t vote until the CBO has evaluated the costs of the bill, and other expert groups have weighed in on what the realistic impact is, taking into account longer-term effects.

Back at the end of September, the Committee for a Responsible Federal Budget put out the call, “No score, no vote” and published a statement by Maya MacGuineas, president, saying,

“Passing a reconciliation bill without a CBO score would make a mockery of the entire budget process.

“Right now, we don’t know whether the reconciliation package currently being considered would cost $3.5 trillion, $4 trillion, or $5 trillion, and we don’t know whether it is deficit-neutral or a huge budget buster. And we won’t know until CBO has a chance to score it. You wouldn’t buy a new house without knowing its price; why would you vote for transformative legislation without knowing the cost?”

And, no, in the intervening weeks, there has been no score released, only talk of hypothetical alternate versions of the proposal and indicators that a vote will happen immediately upon the conclusion of negotiations with Senators Joe Manchin and Kyrsten Sinema, whose votes are needed to secure the majority vote.

This is appalling, and all the more so considering that the Biden administration regularly claims that the proposal is cost-free, most recently, in a tweet on Sunday:

“The cost of the Build Back Better Agenda is $0.

“The President’s plan won’t add to our national deficit and no one making under $400,000 per year will see their taxes go up a single penny. It’s fully paid for by ensuring big corporations and the very wealthy pay their fair share.”

Even moving beyond the eye-roll at the claim that “cost” really measures whether a bill adds to the debt, it should be wholly unacceptable for Congress to vote on this without any independent verification of this claim.

Principle 2: Fully fund any new spending programs, full stop and gimmick-free.

I’ve criticized the bill previously for its inclusion of a child care benefit which ends in 2027 — and that’s far from the only provision which ends after a limited number of years, in order to appear “fully funded” based on 5 years of spending, for example, and 10 years of tax revenues. Medicare Dental phases in over a long period of time. Among the most extreme of these gimmicks is that the child tax credits are cut off in 2025. Reports are that Democrats are deliberating cutting the overall pricetag of the bill by crafting other such cut-offs or phase-ins, with the expectation that once benefits are expected by the electorate, they will demand they be maintained regardless of whether they require new tax increases or are instead deficit-financed.

It should go without saying that the American public should consider this wholly unacceptable, but so little has been written about these gimmicks, especially in the major news sources, that the barest preconditions for American opposition don’t even exist. And consider, after all: when was the last time you saw reporting on polls of Americans’ opinions on the spending bill that asked questions like, “do you support a child care benefit that ends in 2027?”

Lastly, Principle 3: Fund broad-based social insurance programs through broad-based taxes, rather than promising that they will be “free.”

Yes, I am speaking of the family and medical leave proposal which is planned to be deficit-financed and/or funded through “tax hikes on the wealthy.” And, as I wrote previously, this fails to conform to established norms — in Social Security disability and retirement benefits and in broad international practice — and there is a reason for those norms, a recognition that social insurance is, in fact, not just “welfare for the middle class” but benefits that we all collectively receive and all collectively pay into.

The same holds true for the proposed new Medicare dental, vision, and hearing benefits, the plan for which eliminates the 25% premium payment that applies to Medicare Parts B & D.

Many Americans have the conception that we do not tax the wealthy as much as we should, and that other countries tax the rich much more aggressively than we do — but this is not actually the case. Other western developed nations are actually far more accepting of the need for all residents, and in particular the middle class, to be taxed to fund social welfare benefits.

Are these principles unrealistic, pollyannish, even? Maybe so. But they are still necessary.

As always, you’re invited to comment at JaneTheActuary.com!

Articles You May Like

Credit card debt set to hit record levels as consumer holiday spending rises
More than 90% of 401(k) plans now offer Roth contributions – but only 21% of workers take advantage
Why the ‘great resignation’ became the ‘great stay,’ according to labor economists
13 anonymous media executives make predictions for the new year
GOP Budget Squabble Puts The Older Americans Act At Risk

Leave a Reply

Your email address will not be published. Required fields are marked *