Bummer, but fortunately President Joe will still be able to exercise his veto.
Manchin, I mean, not Biden. The real president.
Greg Sargent’s read on this is right. There’s no way Pelosi would be moving ahead with a vote tonight if she wasn’t confident that she had 218 in her pocket. She’s moving ahead.
It's on. Pelosi confirms BBB vote tonight. Votes must be there. pic.twitter.com/eNbrHro28A
— Greg Sargent (@ThePlumLineGS) November 18, 2021
So progressives are going to eat it on the much higher SALT deduction cap and moderates are going to eat it on the bill not being paid for after all — I think. We’re still waiting for a CBO score of the full bill, but the following sneak peek at the fiscal consequences of beefing up the IRS suggests that the reports earlier this week were correct. The White House was estimating that more funding for the IRS would net $400 billion in extra revenue through stricter enforcement of tax laws over the next decade. It’s more like $127 billion, says CBO:
CBO estimates that the funding for tax enforcement activities provided by H.R. 5376, the Build Back Better Act, would increase outlays by $80 billion and revenues by $207 billion, thus decreasing the deficit by $127 billion, through 2031. https://t.co/GrbShPusVK
— U.S. CBO (@USCBO) November 18, 2021
That probably means the total bill will *not* be paid for, which means centrist Dems could conceivably walk away. Instead, since Pelosi apparently has the votes, the centrists will likely argue either that the bill is “close enough” to being paid for or that they trust the White House’s estimate of how much extra revenue a more muscular IRS will collect. Which is … hard to square with their insistence that the House had to wait for a CBO score before the bill could pass, but oh well.
Now that Ways is out, you have the full(ish) picture. ~$800B in scored deficit reduction over 10 years, plus ~$200B in IRS enforcement offsetting ~$1.16T in spending. Adds $159B to the deficit on net, but the $280B WH estimate would put them in the black. https://t.co/slQAxgVwCn pic.twitter.com/yEe7PMmQZN
— Liam Donovan (@LPDonovan) November 18, 2021
NEW: @USCBOcostest says Dems' Build Back Better will add *$240.2 BILLION* to the deficit over 10 years.
— Nathaniel Reed (@ReedReports) November 18, 2021
Literally as I was writing the last paragraph, CBO published its estimate for the full bill:
CBO estimates that enacting this legislation would result in a net increase in the deficit totaling $367 billion over the 2022-2031 period, not counting any additional revenue that may be generated by additional funding for tax enforcement.
If you use CBO’s number for additional revenue from tax enforcement, the deficit drops to $240 billion. If you use the White House’s estimate, revenue actually slightly exceeds spending in the bill by $33 billion or so. That estimate, by the way, includes not only individuals and corporations who’ll pay up after being audited by the IRS but a huge chunk of revenue — $160 billion — which Team Biden expects people will cough up voluntarily, for fear of being audited if they try to hide their income from the IRS. In other words, the administration is expecting would-be tax cheats to be scared straight by stricter enforcement. “The research literature on deterrence, I’d say, is very mixed,” sniffed the head of CBO in a seminar this week, justifying his agency’s more conservative conclusions about how much revenue will be raised.
Doesn’t matter now, though. The “deterrence” revenue argument is the fig leaf that’s been offered to centrist Dems to get them to vote yes and they’ve apparently accepted. (“It’s paid for!”) No doubt the fact that this bill has zero chance of becoming law in the Senate was a powerful inducement in getting them to grudgingly go along. Senate Dems are already sniffing at the legislation, and I don’t just mean Manchin:
The cost of the package is certain to change in the upper chamber. Hundreds of billions of dollars in policies like paid leave and immigration are likely to be altered or axed amid resistance from lawmakers and scrutiny from the Senate parliamentarian, who judges which provisions are compatible with the upper chamber’s rules.
“One wonders what the point is, doesn’t one?” Sen. Sheldon Whitehouse (D-R.I.) said about the House scramble for a cost estimate. “I think at the end of the day, it’s important to price out what we’re going to do.”
It’s time now for the president — the real president — to begin deciding whether he wants to move forward. The polling in his home state is clear:
New https://t.co/694sju1jzT poll: Joe Manchin has 60% approval compared to Biden’s 32%.
78% support Manchin's efforts to pass the bipartisan infrastructure bill.
Nearly 74% said Manchin should oppose the president’s Build Back Better plan.https://t.co/XoMVkWqntU
— Marc Thiessen (@marcthiessen) November 18, 2021
West Virginia loves the bipartisan roads-and-bridges infrastructure bill (someone tell the 13 House Republicans who voted for it) and hates the Build Back Better reconciliation bill. Seems like Manchin’s path is obvious. If he needs a talking point to explain his decision to tank the bill, here’s a fine one from GOP operative Logan Dobson:
And the money it does raise would come in large part from more IRS audits on regular Americans! All to fund a bill that’s primarily a tax cut for the rich! Have fun walking the plank, Dems. https://t.co/ns52l8Ps9b
— Logan Dobson (@LoganDobson) November 18, 2021
A beefed-up IRS means more average joes getting hassled at tax time while a much higher SALT deduction cap means rich people in blue states represented by Schumer and Pelosi keeping more of their tax dollars. Sounds like a sweet deal for liberals but not so sweet for a guy who represents a working-class Trump +40 state. Your move, Joe.