CBO says bipartisan infrastructure bill would add $ 256 billion to 10-year deficit

The Congressional Budget Office (CBO) on Thursday released an analysis that said the $ 1,000 billion bipartisan infrastructure package would add $ 256 billion to the federal deficit over the next decade, a tough pill for senators to swallow. GOP who insisted on paying the full cost of the legislation.

The budget office estimates the bill would increase discretionary spending by $ 415 billion over 10 years while increasing revenue by $ 50 billion and decreasing direct spending by $ 110 billion.

“On the net, the legislation would add $ 256 billion to the deficits forecast during this period,” the CBO reported in its summary.

The bipartisan group of senators that negotiated the bill with the White House said it would spend $ 550 billion in new money over the current baseline budget. That means just over half of the new spending – $ 294 billion – would be offset through payments, according to the CBO’s strict standards for rating legislation.

Many Republicans have said for weeks that they want to see official analysis showing that the $ 1,000 billion infrastructure bill is “credibly” paid.

“We have to get a score, so we have to see if the proposal is credibly paid,” said the Senate Minority Leader. Mitch mcconnellAddison (Mitch) Mitchell McConnellOn the money: Trump asks court to block the release of tax returns to Congress | Private sector creates 330,000 jobs in July, well below expectations Senate panel advances first three spending bills McConnell presents GOP demands for government funding deal MORE (R-Ky.) Said in late June, when he said he was undecided on whether to support the legislation.

McConnell was one of 17 Republicans who voted last week to proceed with the bill, although that doesn’t necessarily mean he will support the final passage.

The CBO score supports conservative Republicans who criticized some of the bill’s payments as budget gimmicks.

“It’s easy to get carried away with the things that you see on the bill that are good… sometimes when you’re so wrapped up in it, it’s easy to lose sight of the fact that the are wrong,” said the senator. Mike leeMichael (Mike) Shumway LeeKaine Says He Has Voices To Pass Iraq War Repeal In Senate New Barrier Slows Trillion Infrastructure Bill This Week: Senate Kicks Off Sprint PLUS infrastructure (R-Utah).

“Up to half of the payments are just bogus,” he added.

The CBO screening is a disappointment to the tax hawks in Congress, but not a total surprise.

The main authors of the legislation, including Sen. Rob portmanRobert (Rob) Jones Portman Senate considers possible end of weekend for T infrastructure bill Kaine says he has votes to push Iraq war repeal to Senate Defense from Day to Day next day: Senate committee votes to remove Iraq war authorizations | Police officer fatally stabbed outside the Pentagon ID’d | Biden administrator approves first arms sale to Taiwan (R-Ohio), had previously acknowledged to his colleagues that the budget office had indicated that it would assess the various payments in the legislation as only covering part of the overall cost of the bill.

Portman staff worked for weeks to notify other Republican Senate offices in advance that the CBO would assess the payments as only partially covering the cost of the bill.

The Ohio Republican and his team also pointed out additional documents, such as CBO estimates that are not included in the official score, which indicate that the actual fiscal impact of the infrastructure bill will only add not as much in deficit as that of Thursday. estimate suggests.

These arguments appear to be compelling, as Senators said they did not expect support to drop significantly now that the CBO score has been released.

Several Republican swing votes had previously said they would have no problem with a cost analysis showing that $ 550 billion in new spending was not fully offset.

“The Congressional Budget Office has long been crippled by rules that still make them wrong. They were never quite right, ”Sen said. Todd YoungTodd Christopher YoungKaine Says He Has Voices To Pass Iraq War Repeal Into Senate Defense Overnight: Senate Committee Votes To End Iraq War Clearances | Police officer fatally stabbed outside the Pentagon ID’d | Biden administrator approves first arms sale to Taiwan. Senate committee votes to repeal Iraq war permits (R-Ind.) Monday. “There is a real-world scoring, as my constituents understand, like when you collect unused COVID money or use other unspent government funds.

“The Congressional Budget Office does not give credit for this and instead counts it as a whole as an expenditure,” he added. “My constituents are smart enough to understand that this is an artificial score. So that doesn’t bother me. I dive into the details and look at real world accounting as opposed to Washington, DC, CBO accounting.

The CBO acknowledged in the report that its cost estimate did not include the possibility that increased investment in infrastructure would boost the economy and, in turn, increase federal tax revenues.

“Passing this legislation would create macroeconomic effects which, in turn, would result in fiscal feedback. The CBO did not estimate these effects or their budgetary consequences for this legislation, ”the agency wrote.

In a draft proposal distributed to senators at the end of June, the bipartisan group of negotiators estimated that an increase in economic activity would increase government revenues by $ 58 billion under a dynamic scoring model, different from the government’s approach. CBO.

CBO estimated bipartisan legislation would raise $ 6.18 billion through higher custom user fees, $ 3.16 billion in manufacturer rebates for unused drugs paid for by Medicare, $ 50.8 billion by delaying a Trump-era rule on Medicare prescription drug rebates and $ 10.18 billion in spectrum auctions.

Thursday’s budget score was released shortly after the CBO said it expects the federal deficit to hit $ 3 trillion this year. He also forecast an average annual deficit of $ 1.2 trillion for 2022 to 2031.

Updated at 4:48 p.m.