The Congressional Budget Office released a report Thursday estimating the $1 trillion proposal would add $256 billion to the nation’s budget deficit over the next 10 years, meaning nearly half of the package’s proposed new spending could end up tacked on to the nation’s growing debt load despite calls to raise funds entirely through increased revenues, reallocated funds and spending cuts.
Over the next 10 years, enacting the Infrastructure Investment and Jobs Act would increase the government’s net spending by $315 billion while increasing revenues by only $50 billion, CBO projected Thursday.
When announcing the proposal last week, the White House said it would be funded with more than $250 billion in unspent Covid-19 relief funds, strengthened tax enforcement for cryptocurrencies, new revenues and “other bipartisan measures”—not once mentioning added debt.
It’s unclear how the new estimate may hurt the bill’s chances in the Senate, but on Tuesday, a group of seven GOP senators demanded a CBO estimate showing the bill’s effect on the federal deficit and said: “We support infrastructure, but it has to be paid for.”
Sen. Steve Daines (R-Mont.), who voted against moving forward with the infrastructure proposal last week, released a statement Thursday slamming the estimate and vowing to vote against the final bill, pointing out that lawmakers “promised the bill would be fully paid for and not increase the [national] debt.”
All Democratic senators and 17 Republicans voted to advance the bill last Wednesday, setting the stage for its likely approval in the chamber, but its fate in the House is more uncertain given a crop of progressives who’ve signaled they may not support an infrastructure vote unless the Senate also moves forward with a separate, and highly divisive, $3.5 trillion budget bill.
Amid inflation concerns that have rattled markets in recent months, the gap between government spending and revenue has swelled to more than $2.2 trillion in the 2021 fiscal year—less than last year’s $2.7 trillion at this time, but far more than historical deficits of less than $1 trillion. A larger deficit typically means the government is taking on more debt, which can ultimately limit the government’s ability to increase spending in order to curb economic downturns—or fight pandemics.
What To Watch For
A vote to finalize the infrastructure bill in the Senate is expected by Saturday, Majority Leader Chuck Schumer (D-N.Y.) said Thursday. The package would then move to the House for approval.
$35 trillion. That’s how much CBO projects the nation’s debt will swell to by the end of this year—before adjusting for fiscal stimulus.