Budget hawks warn that Biden's social-welfare bill could cost more than administration says

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Two leading fiscal watchdogs are raising alarms about the true cost of President Biden’s social welfare and climate change bill, arguing the total price tag is far higher than the $1.75 trillion that Democrats have estimated.

A new budget model released by the University of Pennsylvania’s Wharton School of Business on Thursday projected the real cost of the spending package could be more than $4.26 trillion. Economists reached the figure by extending all of the programs proposed within the bill over the next 10 years.

“By 2050, the proposal would increase [the] federal debt by 2.0 percent and decrease GDP by 0.1 percent, relative to the current law,” the economists wrote.

The president has claimed that the bill will cost “zero” because, he said, the proposals will be paid for with tax increases on wealthier individuals and corporations.

Congressional Democrats have sought to downplay the cost of the package by limiting the lifespan of some of the more expensive programs. 

The White House, for instance, has proposed to extend an expansion of the Child Tax Credit, which gives $300 a month to families with children under the age of six, for only a year. It has similarly proposed a one-year extension of the Earned Income Tax Credit.

For larger spending programs, like universal pre-kindergarten and child-care subsidies, Mr. Biden has proposed a six-year life span.

Such tactics, according to fiscal watchdogs, prevent taxpayers from understanding the overall cost of the package.

“Unfortunately, the framework relies heavily on the massive gimmick of arbitrary sunsets to make the numbers work,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Extending these policies could end up costing up to $2 trillion over the decade, or perhaps even more.”

The Committee for a Responsible Federal Budget, a non-partisan economic think tank, has also published a studying showing the real cost of Mr. Biden’s bill is above $4 trillion, after discounting budget gimmicks.

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