Government Spending

How Democrats Could Hide $2 Trillion in New Spending With Budget Gimmicks

Legislating with budget gimmicks is shameful, timid, risky, and opportunistic. Mostly, though, it's really expensive.


It now seems fairly certain unlikely that President Joe Biden's $3.5 trillion "Build Back Better" will make it through the U.S. Senate as a $3.5 trillion spending plan.

Instead, the final version of the bill will probably have a topline spending figure of less than $2 trillion. Even Biden is now admitting as much. But it could have up to $2 trillion in additional, hidden costs, too—thanks to at least two potential changes that one budget watchdog group calls "blatant" gimmicks involving the expanded child tax credit and the Affordable Care Act.

Democrats are reportedly considering a one-year extension of the expanded child tax credit, which pays parents $3,000 annually for every child (and an extra $600 for kids under age 6) and is paid out as a refund even for families that owe no federal taxes. Previously, Biden's plan called for a five-year extension of the child tax credit. As I wrote in September, the five-year extension was a budget gimmick designed to make the tax credit appear to be roughly $700 billion less expensive than it otherwise would be within the standard 10-year budget window. In short, Democrats were signalling that the expanded child tax credit would be permanent, but they were only accounting for half of what it would actually cost to make it permanent.

A one-year extension would be mashing that same "gimmick" button even harder.

In a similar way, Democrats are also reportedly considering a shorter-than-planned extension of the expanded Obamacare subsidies made available during the pandemic. Instead of being extended permanently, those provisions would technically expire after three years—even though everyone knows they are likely to be extended past that sunset date.

"These proposals don't actually shrink the package; they just shorten it," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB), a nonprofit that advocates for balanced budgets. The CRFB estimates that the twin "blatant budget gimmicks" involving the child tax credit and Obamacare subsidies could hide between $1.5 trillion and $2.4 trillion in future spending, depending on other trade-offs in the final package. Even if the final bill is $1.9 trillion and requires no new borrowing on paper, the CRFB warns that the actual price tag could be as much as $4 trillion with much of the hidden cost financed by adding to the deficit.

As Reason's Peter Suderman explained earlier this week, this sort of legislative gimmickry is both shameless and timid, as it requires deception and an implicit acknowledgement of the deception. It's also not a novel or partisan maneuver. Both the Affordable Care Act and the 2017 Republican tax bill contained similar gimmicks that prevented a full accounting of their budgetary consequences through the normal 10-year window.

There is some political risk in temporary extensions of major programs, of course. Republicans in 2017 set their tax cuts to expire in 2025 because they assumed that even if Democrats had control of Congress then, the other party would not be willing to hike taxes and would eventually agree to an extension. Now, Democrats are prepared to bet that Republicans won't trash the child tax credit next year, or in five years. There's nothing as permanent as a temporary government program, after all.

Indeed, the short-term extensions also create political opportunity. Some Democrats have already realized that a short-term extension of the child tax credit means it could become a campaign issue in perpetuity. Democrats will be able to run every two years with the promise of extending it.

Shameful, timid, risky, and opportunistic. These budget shenanigans are all of those things.

Most importantly, though, they are really, really expensive.

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  1. I thought the whole point of Democratic spending was to make it as obvious as possible. How do you get re-elected if you hide your spending?

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  2. In other news, CNN has now tripled down on the Rogan/Horse paste controversy after Sanjay Gupta, their staff doctor admitted they lied. This has gotten surreal to the point of hilarity.

    Oh, and Alec Baldwin [accidentally] killed someone on the set of his latest movie.

    Sometimes you can't make the news up.

    1. Won't be surprised if Baldwin blames Trump for her death.

      1. That was my first thought, Trump got on the phone with Russia who sent a hit squad over to switch the bullets. Note, I don't believe that just figured that would be the Maddow take on it.

    2. He didn't verify that it was loaded with blanks. You always check to see what's in the gun you're going to be shooting. His negligence caused this.

      1. You know, all the baldwin haters are saying this. I'm kind of neutral on this one. It seems like a tragedy... and while someone is to blame, it may not be Baldwin. That's what your prop and gun-safety handlers are supposed to do.

        When you hand Meryl Streep a prop gun, Meryl Streep doesn't know shit about firearms, so the set safety people are supposed to instruct her and make sure the prop gun is safe.

        Either way, it's a tragedy.

        1. That’s what your prop and gun-safety handlers are supposed to do.

          All he had to do was look. That's it.

        2. If you don’t know anything about guns, you shouldn’t have it in your hand.

          1. If that were the case, no Hollywood movie could feature a gun.

            1. That's a wise assessment. For a group that's so anti-gun, it's amazing that they would be faking action with a loaded gun.

              1. If Hollywood couldn't put a prop gun in an actor's hand because "they don't know anything about guns", basically that would leave... I dunno, maybe me and Jocko Willink as the only two people in America who could be featured in a film.

                And while I'd watch a movie with Jocko in it, I'm not sure anyone would want to see me be a leading man on camera.

                1. Chris Pratt, Stallone, Eastwood, Bradley Cooper,

                  1. Keanu does some SERIOUS firearms training.

              2. I will say this about Baldwin going forward, the next fucking time he opens his mouth and the subject is gun control, we're going to have a field day.

                1. But that’s precisely what caused this. Alec Baldwin suffers from acute GAS (Gun Alienation Syndrome)

            2. There could be using something gunlike, with no actual round that fits it, with even something like a crossbar at the end of the barrel to mostly prevent this sort of thing even when everything else goes wrong. It'd be like how they always use a phone number that involves "555" to avoid using a real number, its weird if you're aware of it but they do it anyway.
              They're not willing to do this when it comes to guns. They're pushing their own worst idea of "gun culture" on everybody while pretending to be opposed to it.

          2. Boy that would be a great gun control argument, where have O hear it before. Require infinite “training” before letting people have guns….

        3. It is Baldwin's fault. You ALWAYS check the gun. I don't fucking care is Jesus descends feom heaven surrounded by angels to hand you a 'cold' pistol - you pop the chamber and MAKE SURE. Because that's how people get killed in stupid accidents.

          Baldwin trusted the wrong person and pulled the trigger in ignorant confidence without making any personal effort towards safety.

      2. there is absolutely someone else whose job it is to make sure that gun is safe. I'd say someone should end up fired, but i'm sure the union won't allow it because it'll be "no one's fault"

        I have no love for Alec Baldwin, but this is not on him and i genuinely feel bad for the guy.

        1. He's part of the problem, though. He may not know any better because it's always been that way, but I would NEVER point a real gun at someone and pull the trigger because a prop guy tells me it's safe. I double check my unloaded guns before dry-firing them in a safe direction. He's no more at fault than anyone else on set, but the whole thing is asking for tragedy, and more than once, tragedy has been the result.

        2. Every time I have done firearm training every single person was responsible for checking every gun.

        3. He never checked. Baldwin bears the ultimate blame for not checking if the gun actually was hot.

        4. It's on him because he is also the producer of "Rust". The prop handler that handed him a gun with a live round works for him. The idiots that mixed live rounds in with the blank ammo stored on the set work for him. He set the working conditions - which were bad enough that some crew members quit because of safety issues even before the first time a live round was fired on set. (Allegedly this shooting was the _second_ time a prop gun fired a real bullet.)

          As an actor, he is presumed by the Hollywood rules to be incompetent to even open the action on a gun. Actors don't check the guns, and obviously you can't follow the 4 rules and show a gunfight. But he bears at least part of the responsibility for the combination of errors by the crew that loaded a live round and put that gun in his hand, when only blanks and dummy rounds should have been on the set at all.

  3. Biden, Psaki and others in the administration have already claimed the $3.5T bill "will cost zero".

    Biden repeated that (and many other false claims) last night during his so called town hall.

    1. It took hin so long to memorize, it would be a shame not to use it.

  4. "Both the Affordable Care Act and the 2017 Republican tax bill contained similar gimmicks that prevented a full accounting of their budgetary consequences through the normal 10-year window."

    So, the Republicans have used this sort of gimmick in the past to reduce taxes, whereas the Democrats seem solely intent on using it to massively increase the scope, size, cost, and intrusiveness of government.

    Both sides, huh? No difference.

    1. When was the last time Republicans cut the scope, size, cost or intrusiveness of government? And no, taking a few hundred dollars less from people doesn't count.

      1. I mean they tried to, I guess, a bunch of times, when they kept attempting to repeal the ACA. Failed miserably, but sorta took a run at it at least. Didn't Trump order a bunch of agencies to dump a certain percentage of their regulations in the trash? That's not something I see the Democrats doing any time soon.

        Cutting would be nice, but at this point I will settle for not massively expanding. Moderate to zero expansion is better than doubling or tripling the budget, even if it's not as good as shrinking it.

        1. I dunno. Republicans talk a good talk and they bitch a lot when the other party is in power, but when they are in power (with the exception of Trump who was never a Republican anyway) government always grows. Sure they might cut taxes, which seems nice, except that they increase the budget too.

          Both parties suck. I can't support either of them.

          1. Government grows because government is run by "The Men in the Grey Suits". Presidents come, presidents go, congresscritters and senators come and go, but the men in grey suits run the show.

            That's one of the reason Trump was so hated. His "drain the swamp" remarks (whether or not he actually did any draining of the swam") cut to the core of the problem, and the establishment knew it. it's one thing to talk about slowing or cutting this or that byzantine department, but when you talk about the swamp as an entity, people get jumpy. So jumpy they'll literally attempt a coup.

            Don't fuck with the swamp.

            1. Joe you illiterate fuckstick, how many times do people have to slap you with a Dem house and senate being there? Most of the debt was bipartisan, the bulk being a Covid relief package.

              And again, nothing Trump did in any way excuses the actions of Sloppy Joe in utterly destroying the Democratic party.

      2. Well, there was 1994-- which at that time amounted mainly to slowing the growth, and they got murdered in the press with lies and obfuscations.

        I still don't consider that a bowf sidez argument. You can call the Republicans weak, unprincipled, and several other fanciful names. But there really is no comparison to a party that's swung so far to the left that it has openly embraced socialism, to a party that's mostly feckless and ineffective in the face of massive pressure to not only maintain the status quo, but octuple down on it.

        1. But... BadOrangeMan is BAD! My feels!

  5. I would much rather have the spending sunset earlier like this. At least there's a chance it won't get renewed. (The other way, there's no chance.)

    1. Agreed. I think all laws should automatically sunset in 8 years, so the next administration can reconsider whether they are really needed or not.

      1. Yep! Would certainly keep the politicians busy instead of them looking for new things to fuck up.

  6. The title could read: How Republicans Could Hide $2 Trillion in tax cuts With Voodoo Economics.

    Trickle-down economics DOES NOT WORK.

    1. Agree. Government stealing earned money then trickling it down to the sit at homers via social spending absolutely does not work.

  7. Nothing new GW Bush took the Afghan war off budget. Try that with your mortgage! Yeah, you will lose your house.

  8. Who cares? They should just shove it through the way Republicans shoved their 2 trillion balloon through too.

    1. Bowf sidez.

      You should cut back on the cocktails - Biden isn't finished completely ruining the Dems yet. Lots to celebrate coming up!

  9. Yes to parties trying to bankrupt the country and steal from the taxpayer is much better than just one party doing it. Idiot!

  10. "It now seems fairly certain unlikely..."

    This is Pulitzer worthy stuff. Congratulations to the editors of reason on landing such talent.

    1. Yeah, it's one of those "earn while you learn" things.

  11. The Democrats know nothing about economics or where money comes from. Nor do they understand the very basics of monetary theory. To them money comes from a rainbow colored Unicorn wearing LGBTQXYZ labels.
    Much of the spending disguised at infrastructure has not managed to fool anyone. even some democrats including Manchin.
    This bill is simply another giveaway in an attempt to secure the dems control over both houses.
    It's not going to work.
    The best thing to happen is for this bill to die a quick death.

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  13. If tech moguls can afford to build space dildos, there is capacity here to do some stuff. These bills will likely be revenue neutral, not that they need to be, but I suppose you would find yourself looking rather foolish defending the wealth of Jeff Bezos at the expense of roads, bridges, and childcare.

    Rightwing politicians and libertarians depend on people being stupid about how this all works. That's the entire "fiscal conservative" project: make people stupid. Tell them the US government, despite its unique ability to print its own money, must behave like your household does. That, like your household, there is some higher power to which it must owe money. There's a higher power than the United States government?

    I suppose there will be someday, once Republicans have finished utterly ruining the country's hegemony through decades of mismanagement and vampire capitalism. Soon we may very well be in a position where we owe other people money, because due to our decline, we'll be under the thumb of China or whatever. We'll be Weimar Germany just like you predicted. Well done.

    1. The projection is breathtaking.

      1. I've never been a fiscal conservative.

  14. It now seems fairly certain unlikely that President Joe Biden's $3.5 trillion "Build Back Better" will make it through the U.S. Senate as a $3.5 trillion spending plan.

    Fairly certain unlikely.

    Which is it?

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