The House of Representatives passed the Democrats’ “Build Back Better Act” on a party-line 220-213 vote, even though it is now clear that it won’t do what Joe Biden said. On Twitter, President Biden claimed that “My Build Back Better Agenda costs zero dollars…And it adds zero dollars to the national debt.” But the Congressional Budget Office has concluded that this is false.
As the former independent Congressman Justin Amash observes, “According to the CBO, Build Back Better increases deficits by $792 billion over the next 5 years. Spending is front-loaded and revenues (taxes) are back-loaded, so don’t count on it ever to balance. Instead, count on more debt, more resource misallocation, and more divisiveness.”
As the American Action Forum notes, the CBO found that “contrary to its proponents’ advertising, the bill is not fully paid for….the deficit effects are particularly pronounced in the first half of the decade. Specifically, the BBBA would increase federal borrowing by $792 billion between 2022 and 2026.”
The Build Back Better Act is likely to increase inflation somewhat over what it otherwise would be. As the American Action Forum notes, “The upfront nature of the spending means that there will be a substantial fiscal pulse of $792 billion in the first 5 years, exacerbating inflationary pressures…[this] would, all else equal, exacerbate price increases.”
The Build Back Better Act contains many perverse incentives. It will stick large marriage penalties into the tax code. It will subject over a million prosperous married couples to higher tax rates than unmarried couples making the same income. “Marriage penalties in the proposed structure can total $130,200 annually in higher taxes” for some couples, says the Texas Public Policy Foundation.
It encourages out-of-wedlock births, by conditioning thousands of dollars worth of tax credits for low-income people on them not getting married. As CNBC explains, many low-income people could lose their earned-income tax credits if they marry: “a childless worker marrying someone with a kid may eliminate the benefit. It may also reduce what their spouse with a child would have received if they were single.” The Republican Study Committee notes that the bill “penalizes marriage: The bill would permanently double the EITC’s marriage penalty on childless worker benefits.”
It also discriminates against churches and religious communities. It specifically states that “eligible child care providers may not use funds for buildings or facilities that are used primarily for sectarian instruction or religious worship.”