Lawmakers may choose to allow some provisions to expire, to extend some as written, and to modify some. Importantly, these estimates do not reflect what is actually written in the Build Back Better Act nor its official cost for scorekeeping purposes. #Both the CRFB and CBO estimates assume no revenue from imposing the SALT cap, separate from other TCJA changes, after its scheduled expiration in 2025. CRFB assumes a permanent Build Back Better would fully repeal R&E amortization, whereas CBO was not instructed to make this assumption. ^The Build Back Better act delays but does not repeal scheduled amortization of research & experimentation expenses. CRFB’s estimates are based on the assumption that the TCJA is extended or partially extended in separate legislation, which reduces the cost of extending the Child Tax Credit relative to CBO but increases the cost of extending the SALT cap increase. *Differences on Child Tax Credit and SALT are largely due to methodological differences. Memo: Deficit Impact Assuming No Further Offsets Gross Cost of Build Back Better with Extensions
Provide Universal Pre-K and Support Affordable Child Care
Comparison of Estimated Cost of Permanent Build Back Better Act Policy Other differences are mainly due to estimating assumptions. We also incorporate a permanent extension of the bill's delay in the requirement for businesses to amortize research and experimentation expenses, which CBO does not. For example, we assume the Build Back Better Act would be made permanent in the context of an extended or partially extended Tax Cuts and Jobs Act – which results in our permanent Child Tax Credit estimate being roughly $400 billion lower but our permanent SALT cap estimate being about $350 billion higher. Small differences in the total obscure somewhat larger but offsetting differences for specific policies. Moreover, CBO's estimates suggest the gross cost of a permanent bill would total $4.73 trillion, compared to our estimate of $4.78 trillion. CBO estimates a permanent Build Back Better Act with no further offsets would add $2.75 trillion budget deficits, while we estimated $2.81 trillion. That debt increase would grow to $3.2 trillion if lawmakers also make permanent a temporary delay of amortization of research and experimentation expenses.ĬBO's estimates are very similar to our recent estimates, but they differ in some respects. Sources: Congressional Budget Office and Committee for a Responsible Federal Budget.Īssuming these provisions are made permanent without any offsets (note that President Biden has committed to offset extensions), the bill would add $2.75 trillion to the deficit before interest and $3.0 trillion including interest. Gross Cost of Build Back Better from CBO Analysisĭeficit Impact Assuming No Further Offsetsĭeficit Impact Assuming No Further Offsets, with interestĭeficit Impact Assuming No Further Offsets, with interest & cancellation of R&E amortization Other intentionally expiring or non-expiring spending and tax breaks Strengthen Medicaid Home and Community-Based Care Provide Universal Pre-K and Child Care for six yearsĮxpand the Affordable Care Act through 2025 Cost of Permanent Build Back Better Act, Based on CBO Analysis Policy CBO estimates that making most of these provisions permanent would add about $2.3 trillion to the cost of the bill (and lose roughly $260 billion of revenue from imposing the state and local tax (SALT) deduction cap beyond 2025). Most of this increase is due to the cost of extending temporary provisions, though a small amount is likely because some the proposals will cost more in the early years if states and other entities expect them to be permanent.
These include extending the American Rescue Plan's Child Tax Credit (CTC) increase and Earned Income Tax Credit (EITC) expansion for a year, setting universal pre-K and child care subsidies to expire after six years, and making the Affordable Care Act (ACA) expansions available through 2025, among other provisions. Though CBO does not score gross costs, we find the gross cost of the bill would rise from $2.40 trillion to $4.73 trillion using CBO's numbers.Īs we have noted before, the Build Back Better Act relies on a number of arbitrary sunsets and expirations to lower the official cost of the bill. Under assumptions requested by Ranking Members of the Budget Committees, CBO finds a permanent version of the Build Back Better Act with no further offsets would increase budget deficits by $2.75 trillion before interest, as opposed to by $158 billion as the bill is written. The Congressional Budget Office (CBO) today released an estimate of how much it would cost to make most temporary provisions in the House-passed Build Back Better Act permanent.
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