Don’t Take Reconciliation Offsets Off the Table
For Immediate Release
As lawmakers continue to negotiate their Build Back Better reconciliation plan, reports indicate growing objections to a number of offsets, including rate increases, addressing stepped up basis of capital gains at death, and drug pricing reform.
Our illustrative Build Back Better for Less plans discuss each of these offsets as a way to help finance new spending. The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Until we know how much we’re going to spend and have a solid plan to pay for it, we shouldn’t be taking any offsets off the table. New taxes, tax rate increases, base broadening, and spending cuts should all be under consideration.
Rather than starting negotiations with what they can’t do, negotiators should focus first on what they can agree to. Efforts to improve tax compliance, increase tax rates, close loopholes and tax breaks, improve pricing for oil or carbon, lower Medicare costs, and cut other spending should all be in the discussion.
To the extent that agreed upon payfors cannot offset the cost of new spending – without timing gimmicks, exaggerated estimates, or rosy dynamic forecasts – lawmakers should scale back the size of the bill. That is how real budgeting works.
President Biden is right to call for the reconciliation bill to be “fully paid for.” We should keep all options on the table until it is.
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