Vice President Harris recently announced a plan that would increase the Child Tax Credit in two ways, increase the “childless EITC,” and extend the 2021 expansion of Affordable Care Act premium subsidies. As shown in Table 1 below, we estimate a total cost of $2.1 trillion over 10 years. (PWBM will soon post updates of the Harris Campaign proposals. Check back soon.)
Draft Drug Pricing Reform: Preliminary Budgetary Effect
On July 6th, 2022, Senate Democrats introduced legislation (text) that addresses the cost of prescription drugs starting after enactment.
H.R. 5376, Build Back Better Act: Budgetary Effects
Last week, the House Committee on Rules issued updated reconciliation legislation as H.R. 5376, Build Back Better Act (available here). PWBM estimates that the proposal would cost $2.1 trillion, offset by $1.8 trillion in new revenues and other savings.
In order to provide additional context as part of the current reconciliation debate, PWBM has also estimated an illustrative scenario where all spending and revenue provisions in the Build Back Better Framework are permanent. These estimates are neither PWBM’s estimate of any current legislation nor PWBM’s estimates of the Build Back Better Framework released by the House of Representatives. PWBM estimates that making all provisions of the proposal permanent would cost an additional $2.5 trillion.
White House Build Back Better Framework, Illustrative Permanent Scenario
In order to provide additional context as part of the current reconciliation debate, PWBM has estimated a scenario where all spending and revenue provisions in the Build Back Better Framework are permanent. The table below reflects this alternative. These estimates are neither PWBM’s estimate of any current legislation nor PWBM’s estimates of the Build Back Better Framework released by the White House.
The Macroeconomic Effects of the August 2021 Senate Budget Reconciliation Package
Drafting a budget from the August 2021 Senate reconciliation framework that satisfies the Senate rules of reconciliation (“Byrd Rule”) will require a decrease in new outlays or a large increase in revenues (or both) after the standard 10-year budget window. One such potential reduction in spending would allow the new non-healthcare related discretionary spending provisions to expire after 2031. With this reduced spending in 2031, we project that the reconciliation package will decrease GDP by 4.0 percent in 2050. Without this spending decrease (and where the Byrd Rule is not satisfied), we project a 4.8 percent fall in GDP in 2050. For more information, please see our full analysis.
The Biden Platform
Presidential candidate Joe Biden’s campaign has released a substantial list of policy proposals. PWBM finds that over the 10-year budget window 2021 – 2030, the Biden platform would raise $3.375 trillion in additional tax revenue and increase spending by $5.37 trillion. Including macroeconomic and health effects, by 2050 the Biden platform would decrease the federal debt by 6.1 percent and increase GDP by 0.8 percent relative to current law. Almost 80 percent of the increase in taxes under the Biden tax plan would fall on the top 1 percent of the income distribution. Please see our analysis of the estimate for more information on the proposals.
Medicare for All: Comparison of Financing Options
We present the macroeconomic and demographic effects of a stylized mandatory single-payer healthcare system (“Medicare for All” or “M4A”) system under three different financing mechanisms: premiums, payroll, and deficits.
Senator Sanders’ Medicare for All (S.1129)
We estimate the budgetary, economic, health and health coverage effects the Medicare for All Act of 2019 (S.1129) introduced by Senator Sanders, which would provide universal coverage, eliminate all private and public health insurance programs, and expand Medicare to cover additional benefits. More information on the specifics of the act can be found in our analysis of the estimate.