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Budget Office to Publish Cost Estimate for Biden Agenda by Friday

Bloomberg logo Bloomberg 11/16/2021 Erik Wasson, Laura Davison and Jarrell Dillard
Budget Office to Publish Cost Estimate for Biden Agenda by Friday © Bloomberg Budget Office to Publish Cost Estimate for Biden Agenda by Friday

(Bloomberg) -- The non-partisan Congressional Budget Office said its full cost estimate of President Joe Biden’s signature tax and spending bill might not be ready until Friday, threatening to push a planned House vote on the legislation to the weekend or later.

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The CBO analysis also may show that the legislation falls short of fully paying for itself because of differences with the White House over how much revenue could be generated by stricter enforcement of tax laws by the Internal Revenue Service. Yet it’s not clear that will be enough to slow down momentum for passage in the House.

The budget agency has already completed work on portions of the bill. CBO director Phillip Swagel said in a blog post that the rest, including core health care, tax, climate and childcare elements, will be finished by the end of the day Friday.

“If we can get it done before then, we will,” Swagel later told an audience at the Bipartisan Policy Center Monday. “We are not trying to get it in at the end of Friday.”

The CBO analysis is key to Speaker Nancy Pelosi’s plan to bring the roughly $2 trillion bill, known as the Build Back Better Act, to a vote in the House this week.

Pelosi’s office didn’t immediately respond to a request for comment on the CBO schedule. But Illinois Representative Jan Schakowsky said the vote will go forward, even if that means staying in session on Saturday.

“It could be anywhere from Wednesday, Thursday, Friday, Saturday,” Schakowsky said. “It’s not a question of if, it’s a question of when all the T’s are crossed and I’s dotted.”

Representative Katherine Clark of Massachusetts, a member of Pelosi’s leadership team said the vote would still be this week rather than later

Read More: House Eyes Vote on Biden Agenda as Slowdown Looms in Senate

House moderates delayed a vote on the legislation earlier this month, saying they wanted a full picture of the bill’s deficit impact. In a statement, five moderate Democrats pledged to vote for the legislation no later than this week if the CBO estimates were “consistent” with White House estimates that it would be  paid for by tax increases and savings.

The CBO score could fall short of that. The White House estimate of a $2 trillion bill with $2.15 trillion in offsetting revenue and savings is based on achieving $400 billion in new tax revenue from increased tax audits. Swagel on Monday indicated that the CBO, after talking to Treasury officials, continues to see a lower revenue amount.

Video: Biden Hopes to Reach Deal on Economic Agenda This Week (Bloomberg)

“We see north of $200 billion gross which is $120 billion net,” Swagel said, of an $80 billion boost to Internal Revenue Service funds. He said that CBO does not see the same level of deterrence from increased audits that other experts see.

Representative Josh Gottheimer, who was part of the group of moderates that held up the voted pending the CBO assessment, said the discrepancy on IRS enforcement was “part of our expectations.”

“We knew going in that that’s something there will be a difference in,” he said.

Another of the moderates, Florida Representative Stephanie Murphy said, “it’s really important that we don’t draw red lines within the media.”

Swagel also indicated that CBO would not have a clear answer on the exact possible inflationary effect of passing the bill. He said the CBO is in the early stages of compiling an inflation estimate for its annual economic outlook expected sometime in January.

“We are trying to figure out exactly how that goes,” he said.

Inflation Factor

Last week’s government report showing prices in October increased 6.2% from a year ago --  the fastest annual pace since 1990 -- has given Republicans fresh fodder for their attacks on the president’s agenda.

Also sending up inflation warning signals is West Virginia Democrat Joe Manchin, a pivotal vote when the legislation makes its way through the Senate. He has for months been expressing concern about government spending adding to price pressure on consumers. On Monday, he dodged questions about whether he would press for a delay on the bill.

“We’ll be talking to everybody,” he told reporters at the Capitol. “We’re looking at everything.”

House Republican leader Kevin McCarthy accused Democrats of trying to get the bill through Congress before the impact is analyzed.

“In desperation, Speaker Pelosi is demanding the House vote on this bill, even as we do not know exactly how much it will cost or how it will truly impact our lives,” he said on the House floor.

Even if the House does act this week, the legislation will hit a slowdown in the Senate, where Democrats are still working to resolve disputes over taxes, Medicare spending, paid family leave and immigration. On top of that, Senate officials will likely need to work through next week’s Thanksgiving recess to scrub the House bill to make sure it complies with the chamber’s intricate rules before bringing it to the floor. 

“On a bill of this magnitude, this process takes time and patience,” Senate Majority Leader Chuck Schumer said in a letter Sunday to Senate Democrats. He gave no timetable for a vote. 

(Updates with differences on revenue, lawmaker comments, beginning in second paragraph)

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