Washington, D.C. — Today the Congressional Budget Office (CBO) released its official estimate for the Build Back Better Act. Following the release, Seth Hanlon, senior fellow at the Center for American Progress, released the following statement:
The CBO’s cost estimates confirm that the Build Back Better Act is fully paid for. More importantly, the bill makes long-overdue investments in the country’s future, addressing such critical challenges as reducing child poverty, making child care and health care more affordable, providing paid leave to workers, reforming our immigration system, and combating climate change.
The contrast with the 2017 Trump tax law could not be more stark. That legislation increased deficits by $1.9 trillion while prioritizing tax cuts for the largest corporations and the wealthy. The Build Back Better Act invests in families and children and is fully paid for by making the wealthy and large corporations pay more of their fair share.
As expected, the CBO’s score does not incorporate any of the revenue from Build Back Better’s substantial investment in rebuilding and modernizing the IRS. The CBO’s unofficial estimate is, as former U.S. Secretary of the Treasury Lawrence Summers put it, “conservative to the point of implausibility.” The United States is projected to lose $7 trillion of revenue due to unpaid taxes over the next decade on its current course and has a tax enforcement agency that has been decimated to the point where it cannot even pursue high-income people who completely fail to file tax returns. The estimate by the U.S. Department of the Treasury’s Office of Tax Analysis that rebuilding the IRS will net $400 billion of revenue—which represents just 6 percent of the $7 trillion of unpaid taxes—is eminently reasonable and even conservative. Former Treasury and IRS leaders from both parties agree that the robust investment in tax enforcement will likely generate much more revenue—meaning that Build Back Better will reduce deficits by even more than the administration projects.
The U.S. House of Representatives should pass this vital legislation today and send it to the U.S. Senate to take up in the coming weeks. Given that the bill is fully paid for and Congress has many additional potential offsets, the Senate should not only preserve the investments in the House bill but strengthen them.
For more information or to speak with an expert, contact Julia Cusick at [email protected].