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.)
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.
Macroeconomic and Distributional Effects of the Scheduled October 2021 Expansion of the Supplemental Nutrition Assistance Program (SNAP)
The USDA re-evaluation of the Thrifty Food Plan increases the average SNAP benefit by $36.24 per person per month starting in October 2021. PWBM projects that the increase in SNAP spending lowers GDP by 0.2 percent by 2031. People who receive SNAP as well as older working age individuals are helped by policy change while young people with high incomes as well as rich retirees are harmed due to lower future wages and a fall in the return to capital. For more information, please see our full analysis.
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.
Options for Universal Basic Income
Please see our previously published analysis.