Bill unlikely to add to deficit, tax panel says

WASHINGTON — The nonpartisan Joint Committee on Taxation released its initial analysis of Democrats’ major social spending and climate bill Thursday, judging that the “Build Back Better Act” would raise $1.48 trillion in revenue over a decade and be unlikely to add to the deficit long term.

The results are a boon for Democrats, and the report itself clears one of the last remaining hurdles keeping the House from holding a vote on the bill — a demand by moderates to see at least one major nonpartisan analysis of the bill’s effects.

The JCT and the Congressional Budget Office both traditionally evaluate the impacts of major legislation on the federal budget, and their assessments carry weight with lawmakers on both sides of the aisle. It was not clear Thursday when the CBO would release its report.

But with the JCT report in hand, House Speaker Nancy Pelosi and her lieutenants were busy Thursday negotiating with the last few remaining holdouts in the Democratic caucus. With just a three-vote majority, Pelosi cannot afford any last-minute defections.

Speaking to reporters Thursday in the Capitol, Pelosi would not offer any estimates of when a vote might take place.

But she insisted that the House would vote on Build Back Better bill and the companion bipartisan infrastructure legislation together, fulfilling a key demand by progressives that the infrastructure bill not proceed ahead of the social spending plan.

The 10-page report did not include an assessment of the cost of extending pandemic-era Obamacare subsidies or expanding Medicare to cover hearing aids. Democrats have estimated those provisions will cost $165 billion altogether.

Nor did the report factor in the revenue potential of expanded IRS enforcement, something Democrats believe will bring in around $400 billion over a decade. Another revenue stream the report did not include is the projected income from allowing Medicare to directly negotiate prices for certain drugs, starting with up to 10 products in 2023.

But even absent these major provisions, the JCT assessed that the bill will not add to the budget deficit in either the medium-term or the long-term.

While the first two years of the bill’s enactment will be costly, largely due to a one-year extension of the expanded Child Tax Credit, starting in its third year the Build Back Better Act’s revenue will outpace the costs. Over a decade, the JCT estimates the net total revenue from the legislation will be $944 billion.

While major pieces of the bill are currently left out, the JCT report as it is offers Democrats a reason for optimism. The long-term net revenue estimate was higher than many observers had anticipated.

President Joe Biden has long insisted that the bill will not add to the long-term budget deficit. But some of the the early assessments…