CBO Analysis Highlights Risk of Arbitrary Expirations
The House-passed Build Back Better Act incorporates numerous arbitrary sunsets in order to hold down its costs. Today, the Congressional Budget Office (CBO) released an estimate of the cost of the House-passed Build Back Better Act if most temporary provisions in the bill were made permanent. CBO estimates that if all of these provisions were made permanent without offsets, the plan would add almost $2.75 trillion to the deficit before interest, compared to the $158 billion deficit impact of the legislation as written.
Based on this analysis, we estimate the gross cost of the plan if permanent would total over $4.7 trillion, up from our estimate of $2.4 trillion for the bill as written (gross cost estimates can differ based on methodology). These estimates are similar to those published by the Committee for a Responsible Federal Budget in a recent analysis.
The following is a statement from Maya MacGuineas, President of the Committee for a Responsible Federal Budget:
Today’s analysis highlights the large cost of permanently extending expiring policies in the Build Back Better Act. Arbitrary expirations don’t make policies cheaper, they just make them shorter – and sooner or later politicians will have to come to terms with how to address these new benefit cliffs.
CBO’s report doesn’t mean the Build Back Better Act will add $2.75 trillion to the debt; the legislation as it stands would increase the deficit by nearly $160 billion over a decade. But the report does show how expirations in the bill will require tough choices on whether or not to extend these provisions and how to finance them.
President Biden deserves tremendous credit for committing to fully pay for any extension. But it’s impossible to predict the political situation in 2027, 2025, or even the end of 2022 as the chaotic schedule of expirations unfolds. And historic experience doesn’t instill confidence– more often than not, extensions of expiring policies are added to the nation’s credit card.
Moreover, any member voting for this bill should be asked whether they plan to let these policies expire as written in the law, borrow trillions more, or offset the huge cost of the extensions. A follow up question should be if they plan to extend the policies and pay for them why not do that now?
Arbitrary policy expirations create tremendous risk not only for the federal budget, but for beneficiaries of new programs and the states or entities administering them. It was wrong to include them in the 2017 tax cuts and it would be wrong to include them in the Build Back Better Act.
Policymakers should prioritize the programs and policies that matter most, target them where they will do the most good, make them permanent if that is their real intention, and fully offset the cost.
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