The proposed spending plan for the bipartisan infrastructure package may not be enough to foot the bill, according to an analysis from the nonpartisan Committee for a Responsible Federal Budget.
The fiscal watchdog group’s analysis, released on Thursday, found that the so-called pay-fors “appear to overstate savings or count savings that have already occurred,” meaning that the offsets might only cover about half the cost of the legislation.
Lawmakers have clashed for weeks over the $1 trillion package, finally coming to an agreement on Wednesday and voting to take up the bill in the Senate. The deal would provide about $550 billion in new federal money to help repair the nation’s aging roads and bridges, expand access to public transit and build out the nation’s electric vehicle charging stations. The pay-fors would largely repurpose already-approved funds, rely on accounting changes to raise funds and assume that some of the investments would eventually pay for themselves.
The largest source of funding is $205 billion that the group says will come from repurposing certain pandemic relief dollars. Lawmakers also project that the long-term projects will result in $56 billion in economic growth.
The analysis argued that some of the reported offsets come from savings that may have already occurred, including the $53 billion that is estimated to come from states that returned expanded unemployment benefits after ending that program early. The analysis also questioned whether the $205 billion estimated from repurposed Covid relief funds could actually be applied to funding for the infrastructure package given previous legislative efforts to repurpose some of that money.
The package also relies on pension smoothing, which the analysis called a “budget gimmick.” Although the bipartisan group has not yet estimated how much will come from reducing unemployment insurance fraud, the Committee for a Responsible Federal Budget said it did not expect the measures to yield a hefty amount of savings, citing an Office of Management and Budget estimate that found that $5 billion of anti-fraud funding would save only $6 billion over a decade.
The group said the funding proposals were a good start, but more pay-fors will be needed.
“The legislation includes sensible reforms to lower prescription drug prices, extend or impose fees, and improve information reporting to reduce the tax gap,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement. “But it also relies on several phony offsets that will save little or no money.”
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July 30, 2021 at 01:36AM
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Budget Watchdog Warns Infrastructure Deal May Fall Short on Funding - The New York Times
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