Biden needs honesty on budget

The country could sorely use an honest discussion and debate about what the federal government should do and how to pay for it.

Unfortunately, President Joe Biden’s new framework for his Build Back Better plan is mendacity compounded.

Let’s begin with what the federal government should be doing. There are three big-dollar programs for families with children: universal pre-K; child care subsidies; and a refundable child tax credit.

The pitch is that these programs will lift a significant portion of children living in poverty out of it. But the reach of these programs extends well into the upper middle class, and even beyond.

There is no income limit for the universal pre-K program. According to a White House fact sheet, eligibility for the child care subsidies can go up to $300,000 of family income. The refundable child tax credit is available for families making up to $150,000 a year.

This is not an endeavor targeted at poor children. It is a fundamental reshaping of the relationship between families with children and the federal government.

Parents with means would no longer be solely financially responsible for raising their children. Even those with incomes well above the median would have the federal government as a financial partner.

There has been virtually no discussion about whether this fundamental reshaping would be good or bad for children not living in poverty. Is it really to the benefit of children to reduce the responsibility of parents to provide for their wellbeing?

As part of the Biden COVID-19 response package, the child tax credit was transformed into a monthly stipend for a year. Families earning up to $150,000 are now receiving a monthly check from the government based upon the number of children they have and their ages.

That was justified as a way to get cash into the hands of families as the country coped with the economic effects of COVID-19. But Biden’s framework extends this monthly stipend for another year, and it is clearly the intent of Democrats to made it permanent.

Is it really a good idea for the federal government to be sending monthly checks to upper middle class families with children?

Now, let’s turn to the paying for it. Biden professes that his proposed tax increases on corporations and the wealthy fully pay for his proposed spending. But, even if his overly optimistic revenue projections are accepted at face value, that’s only true within the bizarre math of budget reconciliation.

To avoid a filibuster under budget reconciliation, there needs to be no net increase in the deficit over a 10-year period. To achieve that, Biden’s framework phases out much of the spending well before the end of the 10-year planning horizon while the tax increases stay in place for the entire time.

To simplify, Biden is using 10 years of revenue to pay for generally six years of spending. This means that Biden’s framework would add to the deficit while the spending is taking place.

Moreover, there is no actual intention for any of the spending to phase out. The intention is to make it permanent.

The monthly checks to upper middle class families with children supposedly would expire at the end of 2022. By then, such families will have been receiving the checks for two years. At that point, what politician is going to cut them off ?

The pre-K financing scheme is particularly disingenuous. At first, the federal government pays for all of it. Over time, that declines to 60% while states are expected to pick up the other 40%. And after six years, the federal funding supposedly disappears entirely. This is best seen as a fiscal trap for states.

The child care subsidies supposedly come to an end in six years as well. Proposals for Medicaid expansion and increased Obamacare subsidies also fade away well before the end of the 10-year planning horizon.

If Democrats want all these programs to be permanent, they owe it to the American people to identify tax increases that fully cover their costs permanently. Or be honest about how much more debt they propose the federal government take on.

A word about the role of Arizona’s two Democratic senators in all this. Kyrsten Sinema has been pummeled by progressives for gumming up the works on budget reconciliation. But her objections haven’t included failing to level with the American people about the true costs. She’s been fine playing within the bizarre budget reconciliation math.

Everyone assumes Mark Kelly is a safe vote on whatever Democrats decide to do, irrespective of how mendacious. He hasn’t made any public suggestions otherwise.