WASHINGTON (AP) — What will it cost to enact President Joe Biden’s massive expansion of social programs?
Congress has authorized spending up to $3.5 trillion over a decade, but Biden is prodding Democrats to fully cover the cost of the legislation — by raising taxes on corporations and the wealthy, negotiating the price of prescription drugs and dialing up other sources of federal revenue such as increased IRS funding.
The idea is that entire package should pay for itself.
Defending a bill not yet fully drafted, Democrats are determined to avoid a deficit financed spending spree. They are growing frustrated by the focus on the proposed $3.5 trillion spending total, arguing far too little attention is being paid to the work they are doing to balance the books. Biden on Friday said he would prefer the price tag described as “zero.”
“We pay for everything we spend,” Biden said at the White House. “It’s going to be zero. Zero.”
But the revenue side of the equation is vexing, and it’s emerged as a core challenge for Democratic bargainers as they labor to construct one of the largest legislative efforts in a generation. Their success or failure could help determine whether the bulk of Biden’s agenda becomes law and can withstand the political attacks to come.
Republicans, lockstep in opposition, aren’t waiting for the details. They’ve trained their focus on the $3.5 trillion spending ceiling set by Democrats, pillorying that sum as fiscally reckless, misguided, big government at its worst.
“The radical left is pushing in all their chips — they want to use this terrible but temporary pandemic as a Trojan horse for permanent socialism,” Senate Republican leader Mitch McConnell of Kentucky said Thursday. “Trillions upon trillions more in government spending when families are already facing inflation.”
Part of the problem for Democratic leaders is the lack of a consensus about which programs to fund and for how long. House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., acknowledge the price will likely come down and say they have a “menu” of revenue raisers to pay for it. But without certainty on what initiatives will be included, no final decisions can be made.
“This is not about price tag,” Pelosi said Thursday. “This is about what’s in the bill.”
Biden and administration officials stress the plan is as much about fairness as dollars and cents. By taxing the wealthy and corporations, they hope to fund paid family leave and child tax credits that help those reaching for the middle class, all while adopting environmental and economic policies that help the U.S. compete with China. But the haggling over a final spending target is overshadowing the policy goals they are trying achieve.
Washington Rep. Pramila Jayapal, a lead negotiator for House progressives, said Friday that reporters should not depict the measure as costing trillions of dollars when the accompanying proposed tax increases would cover the cost.
“I just believe that this is going to be a zero-dollar-bill — that’s the No. 1 priority,” she said.
Sharron Parrott, president of the Center on Budget and Policy Priorities, a liberal think tank based in Washington, warned Democrats that emphasizing the $3.5 trillion figure could detract from what they are trying to achieve.