Tipsheet

New Talking Point: Biden's $3.5 Trillion Tax and Spend Binge Actually Costs 'Zero' Dollars, You Know

Guy Benson
Guy Benson  |  September 28, 2021 10:05 AM

House Democrats are in the midst of a "time of intensity," according to guidance from Speaker Pelosi – featuring high-stakes meetings and negotiations, a big deadline, plus a spending major vote tentatively scheduled in a few days. Among the big-ticket items Hill Dems are juggling are a government-funding bill with said impending deadline, raising the debt ceiling, and two pieces of the so-called "build back better" Biden agenda: The bipartisan hard infrastructure bill, and the partisan "reconciliation" package that would spend trillions on Democratic priorities. Nobody knows how the schism between more moderate and progressive Democrats will resolve itself (I'll quickly note that every single one of the "moderates," save one, voted for radical and barbaric abortion-on-demand-for-all-nine-months legislation just last week, so let's not get carried away in describing their ostensible centrism). And when I say, "nobody," I mean it; even Pelosi herself, a notoriously effective and ruthless vote-counter, is trying to hold everything together with duct tape. She's loading up the pressure cooker and hoping for the best.

I continue to predict that Democrats will keep the lights on with some sort of government-funding measure or continuing resolution, manage to hike the debt ceiling on their own, enact the Senate-passed bipartisan infrastructure bill, and get something across the finish line through reconciliation. Leftists have been squawking about $3.5 trillion being the minimum number, but that's not where this is headed, and Pelosi is finally saying so out loud: 


Some Biden advisers apparently acknowledge this, too. It's unclear what the relative moderates will end up accepting in the lower chamber, but nobody should expect them to ultimately tank a "compromise" agreement. Likewise, the progressives have been talking a big game, but their threats feel empty. If confronted with the choice of passing a ton of government spending or tanking the entire process, they'll choose Door A. They might make a show of weeping over their "sellout" or whatever, but they'll be there for Pelosi in the end. In my mind, the real question is the size of the final price tag, although there remains a non-zero change of partial or total failure. It's almost laugh-out-loud funny to hear Pelosi try to pretend that "numbers and dollars" are hardly worth discussing as her party prepares to add trillions of dollars in new spending to the national ledger. But it's still less ludicrous than this line that President Biden rolled out, with media types instantly flocking to repeat it: 


It should go without saying that on no planet does a multi-trillion-dollar tax-and-spend binge cost "zero." But so long as the White House and media allies are trotting out this insulting gibberish, I suppose it must be addressed. In short, "paying for" spending (which they almost certainly won't actually do here, by the way) does not eliminate the cost of the spending. And gerry-rigging a CBO score with gimmicks as to eliminate on-paper deficit impact is also not by any definition "zero cost." The Wall Street Journal editorial board does the heavy lifting: 

Behold the new White House spin: The agenda that was being sold a few weeks ago as the modern equivalent of the New Deal or Great Society is actually so modest it doesn’t cost a thing. “Every time I hear this is going to cost A, B, C, or D—the truth is, based on the commitment that I made, it’s going to cost nothing,” President Biden said at a press conference Friday, trying to restore momentum to the reconciliation package, “because we’re going to raise the revenue.” We didn’t know that when you pay for something that makes it free....And so a talking point is born, or at least trying to be: The largest tax increase as a share of GDP and the largest entitlement expansion since the 1960s costs nothing. And money grows on trees...In the real world, Congress’s Joint Committee on Taxation says the bill raises $2.1 trillion over 10 years. Somebody must be paying more.

 Among the tax hikes are a 5.5 percentage point increase in the corporate income tax rate that will be paid by workers in lower wages, consumers in higher prices and investors in lower returns. Though they’ll be pleased to know this all adds up to “zero dollars.” As for the spending, the $3.5 trillion figure that Bernie Sanders considers a “compromise” doesn’t even capture the full cost of what Democrats are proposing. As we explained Friday, that amount is based on budget gimmickry including entitlement phaseouts and phase-ins, and the real cost will be at least $5 trillion, probably far more. So even after $2.1 trillion in tax hikes, the entitlements in the reconciliation package that include the child allowance, college tuition, national pre-K, universal child care, expanded Medicare and a new Medicaid program will add to the U.S. debt for decades to come.

"If the White House thinks these programs are worth the cost, it could make that case. Instead, the political situation is apparently so desperate that it’s resorting to deception that is transparently ludicrous," the Journal editors conclude. It's embarrassing that such things must be said, but they evidently must. They're also correct that whatever the nominal 'top line' cost ends up being (much, much higher than zero), the reality will be far higher. That math has been explained elsewhere. As for the point that "somebody must be paying more," that's manifestly true, and it won't just be "the rich." In addition to raising the business tax rate higher than China's, Democrats are proposing or considering highly regressive tax hikes that will hurt middle and working-class people, from carbon taxes to levies on smoking and vaping. Keep in mind that even as House Democratic leadership seeks to cobble together a bare majority in support of this partisan scheme, with very little margin for error, there are still major questions over on the Senate side: 


Finally, Democrats and the commentariat continue to sing from the hymnal that Biden's agenda is very popular with voters. When Meghan McCain questioned this on "Meet the Press," she was attacked and accused of lying. Consider this: If the huge spending plan were as broadly popular as billed, Schumer and Pelosi likely wouldn't be sweating their whip counts the way they are. And Republicans likely wouldn't be spending money to preemptively hit vulnerable Democrats over the plan: 

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These dynamics do not quite point to a slam dunk win-win for Democrats, the way they're talking about it. And if the American people are clamoring for this package the way we're told they are, why do other polling results show majority opposition in swing Congressional districts – and why were so many Americans in favor of Sen. Manchin's recent suggestion that the entire process be "paused"? The pressure cooker is heating up, and the outcome is uncertain. Stay tuned. I'll leave you with this hackery from the White House: 


The cost is not $0. The cost is trillions of dollars, and Democrats currently don't even know what the final price tag will be. It almost definitely not be fully paid for, which is also not remotely synonymous with "zero cost." And the Trump/GOP tax cuts involved allowing people to keep more of their own money. That may have a deficit impact (I'll remind you that the economy thrived and tax revenues increased after taxes were slashed across the board), but letting people keep more of their earnings is not the same as government "spending." Democrats get this backward. They call trillions in new spending "zero cost" while framing pro-growth tax relief as a "cost."