Democrats' spending plan could cause US debt to surge, despite Biden claim: analysis
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President Biden has repeatedly pledged that his signature spending plan will pay for itself and add zero dollars to the federal deficit thanks to a slew of tax hikes on wealthy Americans and corporations, but a new analysis suggests the $1.75 trillion measure could trigger a significant debt increase by 2050.
The newest "Build Back Better" proposal – pared down from the original $3.5 trillion request – would expand Medicaid, establish universal preschool, provide new funding for child care and offer green energy tax credits, though it notably omits progressive priorities like free community college and Medicare coverage of dental and vision. It relies on $1.95 trillion in new taxes, including a 15% corporate minimum and a surcharge aimed at ultra-millionaires.
"We pay for everything we spend," Biden said recently while speaking at the White House. "It’s going to be zero. Zero."
BIDEN PITCHES REVAMPED MILLIONAIRES TAX, GLOBAL MINIMUM TO FUND SPENDING BILL
But findings from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School, suggest Biden's plan could actually spend about $1.87 trillion over the next 10 years, while increasing revenues by just $1.56 trillion over the same period. That would cause the nation's already record-high debt to increase by 2% in 2050 (relative to the current baseline, that's close to $580 billion).
If passed, the plan would shrink GDP, the broadest measure of goods and services produced in the country, by about 0.4% by 2050.