Tag Archives: Congressional Budget Office (CBO)

When Fact Checkers Check President Biden

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Recently President Biden made a speech where he claimed that Bidenomics was working for everyone–inflation was down, jobs were up, etc. Well, that sounds wonderful, but the numbers tell a different story.

Issues & Insights reported:

The middle class made huge gains during the “trickle-down” Reagan boom and was making huge gains during the Trump boom until the Biden-backed COVID lockdowns gutted it.

Truth is, the only way Biden can make the case for “Bidenomics” is by lying. Examples:

    • “U.S. has had the highest economic growth rate, leading the world economies since the pandemic.”

Except it didn’t. The U.S. ranks 146th in real GDP growth in the world so far this year, came in 151st place last year, and was 66th in 2021, according to the International Monetary Fund.

    • “We created 13.4 million new jobs.”

Also false. Because almost 10 million of those were simply refilled jobs lost during the pointless COVID lockdown. Under Biden, the number of net new jobs is less than 4 million — which is nothing to brag about, given that the working-age population has grown by 6.8 million since Biden took office.

    • “Americans are back to work who’ve been on the sidelines, and they want to come back.”

Another falsehood. There are almost 10 million people who’ve dropped out of the labor force as of today, which is 2.7 million higher than it was just before all the COVID lockdowns.

    • “Just in my first two years in office, my team and I have reduced the deficit by $1.7 trillion.“

His biggest lie yet. As we pointed out in this space earlier, a Congressional Budget Office report released at the start of this year showed that “Biden sharply increased the deficit last year, this year, and next year, and he has set the country on course to add a total of $5.45 trillion to the federal deficit over the following decade.”

The only thing that Biden said that was truthful in his speech is that “Bidenomics is working.”

It’s working all right, assuming that Biden’s plan was to destroy America.

Please follow the link to the article. It includes a number of charts that actually illustrate what has happened to the American economy since 2021.

More Fact Checkers

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On Thursday, The Washington Examiner posted an article about President Biden’s recent speech on Bidenomics.

The article reports:

President Joe Biden promised a “fundamental break” with “trickle-down economics” in a speech on Wednesday in which he relied on a number of misleading claims to make his point.

Touting “Bidenomics,” the White House’s name for its economic agenda heading into the 2024 race, Biden floated a plan that would involve spending more taxpayer money and boosting union labor.

Here is the fact check on that speech:

“My predecessor enacted the latest iteration of the failed theory. Tax cuts for the wealthy. It wasn’t paid for, and the estimated cost of his tax cut was $2 trillion.”

Former President Donald Trump‘s tax cuts did not benefit only the wealthy, and they didn’t cost the government nearly as much as critics claimed.

Last year, the Congressional Budget Office actually said the government is expected to collect more revenue over the next decade than it had projected before the tax cuts were signed into law.

In fiscal 2018, the first year after Trump signed the tax cuts into law, the federal government actually collected slightly more revenue overall than it had the previous year.

We learned this during the Reagan administration–when you cut taxes, revenue goes up.

The article continues:

“Wind and solar are already significantly cheaper than coal and oil. You’re not going to see anybody building a new coal-fired plant in America — not just because I’d like to pass a law to say that; it’s too expensive.”

One key reason that renewable energy is now cheaper than traditional energy production is because the Biden administration has offered sweeping tax breaks and subsidies to green energy companies.

…“Today, inflation is less than half of what it was a year ago. And that inflation [was] caused by Russia and by the war in Ukraine and by what was going on.”

Inflation still remains significantly higher than before Biden took office, even if it has fallen from the heights of last year.

Before Biden took office, the consumer price index, a measure of inflation, rose 1.4% for 2020.

The CPI climbed 4.9% from April 2022 to April 2023, meaning prices this year are still rising far faster than before Biden’s inauguration.

While inflation was indeed worse last year, with prices jumping by 8.6% between May 2021 and May 2022, it remains a significant problem for many at nearly four times the level it was before Biden’s presidency.

…“When I took office, unemployment was over 6%. With the American Rescue Plan, we provided relief and support directly to working-class families. Our economy came roaring back. Unemployment dipped below 4% by the end of my first year in office.”

Like Biden’s claim about the number of jobs created, this statement is misleading because the unemployment rate was artificially high when he took office.

The unemployment rate had already begun to come down from its high of 14.8% in April 2020 by the time Biden took office.

Ending lockdowns and easing pandemic restrictions were the primary drivers of the unemployment rate’s fall, but Biden opposed both as a presidential candidate.

…“Just in my first two years in office, my team and I reduced the deficit by $1.7 trillion.” 

Biden has previously touted the deficit reduction that occurred on his watch, and it’s been misleading every time.

The national debt grew by $7.8 trillion during Trump’s four years in office.

But much of that occurred in 2020 as a result of emergency pandemic spending.

The deficit at the end of fiscal 2020 was more than triple what it was at the end of fiscal 2019, a result of the massive rescue packages Congress passed to blunt the effects of lockdowns.

…In fact, Biden has pushed for record levels of spending, and he asked Congress for relief funds in 2021 well in excess of what was needed at the time.

Please follow the link to the article for further details.

Let’s Not Celebrate Too Soon

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On Friday, CNS News posted an article about the jobs report that was recently released. The mainstream media is thrilled that non-farm payrolls added a whopping 528,000 in July, more than double the estimate of 250,000; and the unemployment rate edged down to 3.5 percent in July from 3.6 percent in June. Unfortunately, that does not really represent the whole picture.

The article notes:

But on the downside, the number of Americans not in the labor force — no job and not looking for one — climbed above the 100,000,000 mark again, settling at 100,051,000 in July. That’s a 239,000 increase from June; and it follows an increase of 510,000 from May to June, when the number rose to 99,812,000.

The “not in the labor force” category includes retired persons, students, those taking care of children or other family members, and others who are neither working nor seeking work.

People who don’t have a job and aren’t looking for one put downward pressure on the important labor force participation rate, which dropped a tenth of a point to 62.1 percent in July.

According to the Congressional Budget Office, a lower labor force participation rate is associated with lower gross domestic product (GDP) and lower tax revenues. It is also associated with larger federal outlays, because people who are not in the labor force are more likely to enroll in certain federal benefit programs.

The article concludes:

In contrast to the aging of the population, CBO said it expects two long-term trends to boost participation in the labor force:

The population is becoming more educated, and people with more education tend to participate in the labor force at higher rates than do people with less education. And increasing longevity is expected to lead people to continue working until increasingly older ages.

But CBO said it expects those two trends to be mostly offset by other trends that will put downward pressure on the labor force participation rate.

The unemployment rate is projected to gradually rise over the next few years. By 2028, it is projected to reach 4.5 percent, CBO said.

We saw what policies actually increase the workforce participation rate and gross domestic product (GDP) during the Trump administration. A return to those policies would increase government revenue, slow down inflation, and improve the overall economy. However, the Biden administration is so intent on undoing everything President Trump did, they don’t care if they destroy the American economy in the process.

This Really Isn’t A Surprise

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Yesterday The Daily Caller posted an article about President Biden’s spending plans.

The article reports:

President Joe Biden’s administration is facing a daunting reality check after claiming for months that their spending agenda will “cost zero dollars,” with the head of the Congressional Budget Office (CBO) saying the White House drastically overestimated the revenue the IRS could gain by cracking down on tax loopholes.

Biden and numerous other senior Democrats in the White House and on Capitol Hill have repeatedly insisted that their $1.85 trillion social spending package will add nothing to the national debt. They argued the package included enough pay-fors to offset the spending programs. CBO chief Phillip Swagel brought that claim down on Monday, however, saying that the tax loophole crackdown in the bill would only garner $120 billion, a far cry from the White House’s projected $400 billion, according to The New York Times.

Why didn’t these numbers come out before they voted on the Infrastructure Bill?

The article notes:

The CBO, which is a non-partisan organization, is set to release its official report Friday. The White House is shoring up support and urging lawmakers to disregard the report ahead of its release.

“In this one case, I think we’ve made a very strong empirical case for CBO not having an accurate score,” Ben Harris, assistant secretary for economic policy at the Treasury Department, told the NYT. “The question is would they rather go with CBO knowing CBO is wrong, or would they want to target the best information they could possibly have?”

Why do we have the CBO if lawmakers are going to disregard their research? Again, why didn’t the lawmakers wait for the report before they voted on the spending?

Sad News For America

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The Epoch Times is reporting that yesterday the House of Representatives voted to pass a bipartisan $1.2 trillion infrastructure bill. Unfortunately, thirteen Republicans joined with Democrats to pass the bill. Oddly enough, six progressive Democrats—members of the “Squad”—voted against the measure. Evidently the squad has grown–there used to be only four members. Now Cori Bush, a Democrat from Missouri, and Jamaal Bowman, a Democrat from New York, have joined the group.

The article reports:

The final vote was 228-206, with 13 Republicans joining Democrats in support of the bill. The Republicans were Reps. John Katko (R-N.Y.), Andrew Garbarino (R-N.Y.), Nicole Malliotakis (R-N.Y.), Tom Reed (R-N.Y.), Jeff Van Drew (R-N.J.), Chris Smith (R-N.J.), Don Young (R-Alaska), Adam Kinzinger (R-Ill.), Fred Upon (R-Mich.), Don Bacon (R-Nebr.), Anthony Gonzalez (R-Ohio), Brian Fitzpatrick (R-Penn.), and David McKinley (R-W.Va.)

…House Speaker Nancy Pelosi (D-Calif.) had sought to hold votes on both bills on Friday but was forced to postpone the vote on the Build Back Better bill, after some moderate Democrats said they wanted a least 72 hours to review the text of the bill, and to review the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) scores on the spending bill to understand the “true cost of the legislation.” They also wanted the Senate to confirm it would not make changes to the bill in the interim period.

The New York Post reports:

In an effort to get the entire Democratic caucus on board, the legislation was further amended on Thursday to change provisions pertaining to drug pricing and the state and local tax deduction (SALT) — a priority for members that represent high-tax states like New York and New Jersey. 

Under the latest version of the Build Back Better legislation, the SALT cap would increase from $10,000 to $80,00 through 2030 before returning to $10,000 in 2031.

Drug pricing language was also altered to provide an extra year before Medicare is permitted to negotiate prices on biologics once those drugs hit the market.

The bipartisan infrastructure measure — negotiated by a group of 22 bipartisan lawmakers led by Sinema and Rob Portman (R-Ohio) — includes $550 billion in new spending, with $110 billion set to be allocated toward roads, bridges and other projects; $65 billion toward broadband, $66 billion to be spent on passenger and freight rail, $55 billion for water infrastructure, $39.2 billion for public transit, $47.2 billion for resiliency purposes, $7.5 billion for electric vehicle infrastructure and $21 billion to address pollution. 

Note that of the $1.2 trillion spent, only $110 billion goes toward roads, bridges and other projects.

Make no mistake about it, the change in the SALT cap is a tax cut for the rich in Democrat states where taxes are high due to reckless spending. It will cut the amount of revenue coming into the treasury and reward the states that voted for Joe Biden. It causes states with lower taxes to essentially subsidize the higher tax states.

We all remember a reasonable infrastructure bill that was suggested during the Trump administration that Speaker Pelosi refused to pass because she didn’t want President Trump to get credit for it. Now we have a pork-laden bill that includes things that no rational person would call infrastructure. We need to elect people who will be fiscally responsible and put patriotism over party.

Fudging The Numbers (As Usual)

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Townhall posted an article today about President Biden’s plan to pay for his massive spending programs. He plans to close the gap between what taxpayers legally owe and what the IRS actually takes in.

The article reports:

Commissioner Rettig’s testimony appeared to provide groundbreaking new information that the tax gap has reached $1 trillion, with major media outlets like the New York Times taking this statement as gospel — even though it’s nearly three times what had been previously estimated by the IRS. Rettig’s statements were soon followed by a plan from Biden to raise $780 billion over the next decade by spending $80 billion on increased enforcement.

But the context of Rettig’s statements show that it was not a new agency estimate. Rettig was asked by Senator Ron Wyden (D-OR) to state his “personal opinion” on the size of the tax gap, and responded by saying that “it would not be outlandish to believe” that the tax gap “could approach or possibly even exceed $1 trillion.” Note also that the IRS Commissioner made this statement while trying to secure increased agency funding.

While this statement may be interesting, to portray it as equivalent to an official IRS estimate is absurd. Less than two years ago, the IRS estimated that, after factoring in enforcement and late payments, the net tax gap was $381 billion. Clearly the gap hasn’t more than doubled in just over 18 months.

The article notes that increased funding of the Internal Revenue Service would bring in some additional revenue, but nowhere near what is needed:

The government’s official budgetary scorekeeper, the Congressional Budget Office (CBO), does believe that some additional revenue could be raised by increasing tax enforcement spending. But the CBO estimates that increasing IRS funding by $40 billion would increase collections by just $103 billion over ten years. Based on that, the Administration’s claim that it could raise $700 billion on net is ludicrous.

The article concludes:

All of this means that closing the tax gap is not as simple as grabbing revenue the IRS thus far simply has not bothered to collect. It would cost money and would end up targeting a broad swath of taxpayers, not just the wealthiest. That means auditors combing through the lives of thousands of Americans, many of whom would be lower income. And it would probably yield far less than Americans are being led to believe.

Biden’s promises of easy revenue from tax cheats are overblown at best. While enforcing owed tax payments isn’t inherently bad, throwing more money at the problem than the IRS would know what to do with is impulsive and wasteful.

Has anyone considered that the way to cut the deficit might be to examine the budget for wasteful spending (and end earmarks again)?

The Cost Of A $15 An Hour Minimum Wage

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What would be the cost of waging the minimum wage nationally to $15 an hour? Townhall posted an article today about the consequences.

The article notes five negative consequences of a $15 an hour minimum wage:

It will destroy jobs

According to the Congressional Budge Office upwards of 1.4 million jobs will be lost if the minimum wage goes to $15 an hour. The cost of doing business will increase and the number of jobs will decrease.

It will hurt low-skilled workers

Low-skilled jobs will be the ones being lost, denying low-skilled workers entrance to the work force.

It will cause inflation

When the cost of doing business goes up, the price of the item produced goes up.

The rich will get richer

Bid companies can absorb the additional cost; small businesses probably cannot. This helps big corporations get rid of their competition.

It will hurt red states the most

Generally speaking, red states are well run and have a lower cost of living than blue states. A sudden increase in the minimum wage would skew their economic profile, causing a sharp increase in their cost of living.

The article concludes:

Yes, people are struggling. I’m not denying that. But an oft-hidden fact is that employers are struggling too … to find workers willing to work … and they are adjusting their rates accordingly. Indeed, the average hourly wage has risen from just under $14 per hour in 2000 to over $25 today. If employers could get workers for less, they would. Instead, the MARKET has forced them to gradually raise wages in order to compete with other employers for labor. Working against this, ironically, is Democrat-encouraged immigration, which serves to dampen wage prospects for lower-skilled employees forced to compete with counterparts used to making less than 50 cents on the hour.

If we’re suddenly jumping from $7.25 to $15, it’s hard not to ask why they wouldn’t just go all out and say $20? Hell, why not $30, or even $50? Everyone in America should have the ‘right’ to a six-figure income, right? No? The same problems anyone with an IQ above 60 could see with such a proposal apply just as much at $15. Of course, none of this has ever been about logic, just politics.

We need the people in Congress to study economics.

Policies Have Consequences

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So far the Biden administration has not been kind to American workers. If you work in the energy sector of the economy, you are in danger of losing your job–if you haven’t lost it already. Now there is another policy idea that will increase unemployment in America.

CNBC reported the following yesterday:

Raising the federal minimum wage to $15 an hour, as President Joe Biden has proposed, would cost 1.4 million jobs over the next four years while lifting 900,000 people out of poverty, according to a Congressional Budget Office report Monday.

The impact on the employment rolls is slightly higher than the 1.3 million employment estimate from a 2019 report from the CBO, a nonpartisan agency that provides budgetary analysis to Congress.

The number has been disputed by employment advocates who cite the benefits from the raise and say businesses will be able to handle the costs.

Biden has acknowledged that the plan to phase in the new federal wage floor likely won’t make it through the $1.9 trillion spending plan he is pushing through Congress, though he remains committed to the increase.

The CBO report estimates that the employment reduction would happen by 2025 and come as employers cut payroll to compensate for the increased costs.

Along with the reduction in employment, the federal budget deficit would increase by $54 billion over the next 10 years, a fairly negligible level considering the fiscal 2020 shortfall totaled more than $3 trillion.

There are a few facts being left out in this discussion. The minimum wage exists to allow new unskilled workers to enter the workplace. It exists for high school students looking for part-time jobs. It allows new unskilled workers to learn some basic skills that are applicable in any job–showing up on time, dressing appropriately, being reliable, taking responsibility, etc. Jobs that pay the minimum wage are not supposed to be career jobs–the people in those jobs are expected to increase their marketable skills and move up the employment ladder. Raising the minimum wage will result in a lot of high school students not being able to get jobs and learn the skills they need to succeed in the business world. Although raising the minimum wage sounds like a wonderful idea, the consequences will not be wonderful.

Pro-growth Or No-growth

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Guy Benson posted an article at Townhall today about the impact of the Trump Tax Cuts on the American economy. As has been pointed out by anyone with a brain, any deficits in Washington are caused by a spending problem–not by a lack of tax revenue.

The article includes a chart showing revised economic growth estimates based on the growth that has already occurred because of the tax cuts:

The Congressional Budget Office (CBO) now projects 156.8 million jobs in America by year-end 2027—2.6 million more jobs than in its June 2017 Budget and Economic Outlook. CBO attributes an average of 1.1 million additional jobs over the next 10 years to the recently enacted Tax Cuts and Jobs Act.

On April 10, I posted an article detailing the Democrats plan to roll back the tax cuts and increase both personal and corporate taxes. That will bring us back to the slow economic growth we experienced under President Obama. The Republicans need to make sure that the American voters understand that–a vote for a Democratic Congressman is a vote for economic slowdown.

Economic policies do have consequences. That has become very obvious in the past year or so.

The Cost Of The Wall

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One of the recent talking points used against those people who actually want to control our borders is the cost of building a wall. Obviously, Mexico will not directly pay for a wall–they enjoy having people come here illegally and send money back to Mexico. There is no incentive for them to put a stop to that behavior. So how do we pay for the wall?

Paul Sperry posted an article at The New York Post on Saturday that offers one possible solution.

The article reports:

Mexico won’t have to pay for the wall, after all. US taxpayers won’t have to pick up the tab, either. The controversial barrier, rather, will cover its own cost just by closing the border to illegal immigrants who tend to go on the federal dole.

That’s the finding of recent immigration studies showing the $18 billion wall President Trump plans to build along the southern border will pay for itself by curbing the importation of not only crime and drugs, but poverty.

“The wall could pay for itself even if it only modestly reduced illegal crossings and drug smuggling,” Steven A. Camarota, director of research at the Center for Immigration Studies, told The Post.

Federal data shows that a wall would work. A two-story corrugated metal fence in El Paso, Texas, first erected under the Bush administration has already curtailed illegal border crossings there by more than 89 percent over the five-year period during which it was built.

The problem is not only illegal immigrants–it’s drug smuggling. How much money and how many lives do the illegal drugs coming into America cost?

The article concludes:

While Democrats complain the $18 billion price tag for the Trump wall is too high, the “Dreamers” amnesty bill they want Trump and Republicans to pass in exchange for funding the wall (or ideally in spite of the wall) would cost US taxpayers even more than the construction of the border partition over 10 years.

“The cost of the DREAM Act has been estimated as very large — a $26 billion net cost in the first 10 years,” Camarota noted.

Indeed, the Congressional Budget Office recently estimated that 3 million DREAM Act recipients would receive an estimated $12 billion-plus in ObamaCare subsidies, more than $5.5 billion in Medicaid benefits, $5.5 billion in earned-income and child-tax credits and more than $2 billion in food stamps.

A bipartisan bill incorporating the deal was defeated in the Senate last month by a vote of 54-45. Trump rejected the proposal in favor of a tougher border bill introduced by Sen. Chuck Grassley (R-Iowa), which limits the number of DACA beneficiaries to 1.8 million, curbs family visas, or so-called chain migration, and phases out the diversity visa lottery, while earmarking $25 billion in funding for the wall and other border security.

The problem is not the money–the problem is the spending priorities.

This Is Not A New Idea

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On Friday, The Daily Signal posted an article about a proposal before Congress asking taxpayers to make loans to private, union-run pension plans. This is a really bad idea. We have seen what has happened to the college loan program since the government took it over. Just in case you think the idea of the government bailing out union pension plans is far-fetched, I posted an article about this idea in October of 2010.

The article reports:

The Butch Lewis Act—a proposal to bail out private-sector pensions through loans as well as direct cash assistance—acknowledges the high probability of default by stipulating that pension plans that have trouble repaying their loans after 30 years of interest-only payments will be eligible for forgiveness or alternative repayment plans.

A loan with a zero-consequence default option for the borrower is not a loan—it’s a bailout.

But it’s not just defaults that taxpayers need to be concerned about. There’s also the cost of providing highly subsidized, low- or no-interest loans for 15 to 30 years, as well as the risk that plans will increase—rather than decrease—their unfunded liabilities over the course of their loans.

These features could lead to loans to insolvent pension plans costing taxpayers more than direct cash bailouts.

But those costs won’t be apparent in the official government score because the Congressional Budget Office is required to score loans under the assumption that insolvent pension plans are essentially riskless borrowers.

In reality, loans to insolvent pension plans could cost taxpayers hundreds of billions of dollars. The most liberal proposals—which supplement loans with direct cash assistance—could cost more than the entirety of multiemployer pensions’ half-trillion-dollar shortfall.

Does anyone really believe that these loans will be paid back? Union membership is down, and various courts are hearing cases that will make the mandatory payment of union dues by non-union members who work in a union shop illegal. Both of these factors will make the union retirement plans (actually a true Ponzi scheme) unsustainable.

The article concludes:

Coping with roughly $500 billion in private union pensions’ unfunded promises will not be easy. There are ways to minimize losses to workers who have earned pension benefits and protect taxpayers from paying for private pensions’ broken promises.

Policymakers should look to improve the solvency of the Pension Benefit Guaranty Corp.’s multiemployer program through premium increases and other reforms; end union pensions’ preferential treatment; enact and enforce sound funding rules; hold pension trustees liable for financial decisions; act sooner rather than later to enact needed reforms, including benefit reductions; and explicitly prohibit federal pension bailouts.

None of these actions provide a costless cure-all, but they offer more fair and rational solutions that don’t treat taxpayers as guarantors of private-sector promises or set the stage for even more mismanagement and reckless behavior.

There is no reason every American should pay for the fact that the unions have not sufficiently funded their retirement plans!

Losing Health Insurance Because You Want To

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Yesterday National Review posted an article about the claims the Congressional Budget Office (CBO) is making regarding the number of people who would lose their health insurance if ObamaCare were repealed.

The article states:

Do you want to repeal every word of Obamacare and replace it with nothing? CBO says 22 million fewer people would have health insurance. Do you prefer replacing Obamacare with a system of flat tax credits, in which you get the same amount of assistance regardless of your financial need? CBO says 23 million fewer people would have health insurance. Do you prefer replacing Obamacare with means-tested tax credits, like the Senate bill does, in which the majority of the assistance is directed to those near or below the poverty line? CBO says 22 million fewer people would have health insurance.

22 million, 23 million, 22 million—these numbers are remarkably similar even though the three policies I describe above are significantly different. Why is that?

Thanks to information that was leaked to me by a congressional staffer, we now have the answer.

Nearly three-fourths of the difference in coverage between Obamacare and the various GOP plans derives from a single feature of the Republican bills: their repeal of Obamacare’s individual mandate. But the CBO has never published a year-by-year breakout of the impact of the individual mandate on its coverage estimates.

So actually, a large percentage of the people who would lose insurance coverage if ObamaCare is repealed would choose to lose coverage because they would no longer be penalized for not having insurance. Basically, the CBO report is spin! There is also the matter of ObamaCare requiring people to pay for coverage they don’t need. Generally speaking senior citizens do not need maternity coverage or pediatric dental coverage. They should not be asked to pay for it!