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U.S. Chamber Of Commerce Says Accounting Trickery Hiding True Costs Of Spending Bill

   DailyWire.com
Burning US five and one dollar bills, London, 8th August 2011.
Tom Stoddart Archive / Getty Images

The United States Chamber of Commerce sent a letter to members of Congress explaining how the progressive-backed reconciliation bill contains several gimmicks and arbitrary sunsets that would add another $1 trillion to the total cost of the package.

“As you await scoring from the non-partisan Congressional Budget Office on the latest iteration of the reconciliation bill, we request that you seek a complete accounting of the budgetary and economic impacts of the current proposal,” the letter begins. It then lists four major concerns that would add significantly to the cost of the final law: spending and tax provisions which arbitrarily sunset to give the appearance of lower cost, the impact of sunsetting those programs on state governments and the private sector, inflation costs, and workforce participation.

Without the arbitrary sunsets, some as short as one year, on the new entitlement programs and tax credits the bill would introduce, the cost of those programs would jump significantly, the Chamber explains. “Given that the bill’s proponents clearly intend for these programs to continue past their sunset, lawmakers should be provided with a Congressional Budget Office estimate of the true cost of the bill if these programs were permanent.”

The letter then shows a comparison between the estimated proposed funding for three programs, as well as an estimated cost of the programs, made by experts at the University of Pennsylvania’s Wharton School of Business. Under the proposed reconciliation bill, $390 billion would be allocated for universal child care and preschool through 2027. But if the program were made permanent, the cost would be around $700 billion dollars. The proposed spending for health care coverage under the reconciliation bill is estimated at $126 billion and sunsets in 2025, but the experts at Wharton estimated that the cost of making it permanent would be $386 billion.

The bill’s expanded Child Tax Credit and Earned Income Tax Credit sunsets in 2022, and is estimated to cost about $170 billion, but according to the experts at Wharton, the total cost of making the program permanent would amount to an astonishing $1.96 trillion.

The Chamber also took issue with the proposed involvement of states, specifically the burdens of cost-sharing. Under the bill’s childcare provision, states would be required to bear 10% of the costs, beginning in year four, if they choose to participate in the program. In addition, private childcare providers are required to meet a series of federal requirements, which would increase their costs. However, after year six, funding abruptly ends, leaving states hung out to dry, forced to bear the full cost of the program if Congress refuses to extend it. The Chamber expressed similar concerns over the universal pre-K program, which requires a 40% cost share before funding sunsets, as well as expansions to the Affordable Care Act.

The Chamber also took issue with the spending proposals, which would cut taxes in the short term, but increase them substantially in the long term. An analysis by the Joint Committee on Taxation, cited in the letter, revealed that even though the bill proposes $174 billion in tax cuts over 2022-23, the bill estimates an increase of $945 billion in government revenue over 10 years. Furthermore, the bill’s Social Safety Net provisions reduce taxes by $404 billion through 2026, but over the succeeding five years, taxes increase by $202 billion. “Altering the tax code to increase after-tax income in the near-term to be financed by increases (if continued by Congress) in later years would exacerbate inflationary pressures,” the letter says.

“As stated repeatedly over the last several months, the Chamber remains strongly opposed to the reconciliation bill for many reasons, including our concerns regarding its impact on the fragile economic recovery and U.S. global competitiveness. Detailed analysis on the issues identified above would at a minimum help ensure that lawmakers are making a more informed decision before moving ahead with a multi-trillion bill.”

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