Even So-Called 'Paid For' Spending Has a Cost
AP Photo/Elise Amendola, File
Even So-Called 'Paid For' Spending Has a Cost
AP Photo/Elise Amendola, File
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As Democrats seek to downplay the impact of legislation that will likely end up adding as much as $5-6 trillion in new spending, they have resorted to a new rhetorical tactic: claiming the Biden agenda will cost nothing at all. President Biden and Speaker Pelosi each said over the past week that Democrats’ agenda will “cost zero dollars.” Press Secretary Jen Psaki even doubled down on the claim afterwards. But while the idea that the reconciliation bill will have no cost is transparently false, Democrats’ underlying argument is untrue as well.

Claiming the reconciliation bill will cost zero dollars is a classic example of deceptive advertising. The literal meaning of those words is that the bill will involve no new spending at all, an obviously untrue statement — you wouldn’t say a new car you bought “cost nothing” because you were able to pay for it without a loan. But Biden and Co. are able to quickly retreat when challenged on this, claiming that they of course meant that the bill will have zero deficit impact.

Fact-checkers have been predictably generous in choosing to address the latter argument and ignore the obviously false claim that Democrats continue to repeat. But even the secondary claim is demonstrably false.

Though we lack final legislative language, the White House’s own Office of Management and Budget has admitted that Biden’s Build Back Better agenda would add $1.36 trillion to the deficit over ten years. And eventhat fails to show the full picture, as Democrats have aggressively used accounting gimmicks to mask the true deficit impact of their agenda.

The legislative package is often referred to as costing $3.5 trillion, but that’s because Democrats included sunset provisions that mean that their proposed spending would last only about four or five years. The ten-year budget window that official budgetary scorekeepers use would show those programs as costing (truly, this time!) nothing for the remaining years. On the other hand, the tax “offsets” take place over the full ten-year budget window. In other words, they’ve written a bill with a decade of tax hikes to pay for five years of spending. The true cost of proposed spending when factoring in these gimmicks would likely be closer to $5.5 trillion.

This is deeply misleading because Democrats do not actually want their agenda to expire after four years. Rather, they’re hoping that Americans become used to the benefits and programs offered and pressure their leaders to extend them. In this case, they’d get to have their cake and eat it too — they can sell the cost of the bill as being far lower than it truly is, but still get to effectively make the programs permanent as they wanted in the first place.

The deceit in the Democrats’ argument is like an onion (or an ogre) — it has layers, and lots of them. It’s an article of progressive faith that the only downside of higher taxes is that rich people don’t like paying them, one which drives them to think that “zero budget impact” means functionally the same thing as “zero cost.” That’s false.

Even paid-for legislation is paid for by you, the taxpayer, even if the tax obligation nominally falls on someone else. Higher corporate taxes andcapital gains taxes, for example, translate to decreased economy-wide investment and, down the line, lower wages. That’s a tax on anyone who earns an income, not just those paying the tax.

Democrats obstinately refuse to admit this, as evidenced by Psaki’s claim that it would be “unfair and absurd” for businesses to respond to tax hikes with price increases. A worldview based around arbitrary notions of morality has no place for amoral economic realities.

It does taxpayers no good to have the fairly clear fact that Biden’s agenda will cost a ton of taxpayer dollars muddied by misuse of words and deliberately misleading rhetorical tricks. If Democrats truly believe the spending they are advocating for is needed even in the face of a $28 trillion national debt, they should be able to defend it on its merits alone.


Andrew Wilford is a policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax policy research and education at all levels of government. 

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