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CBO found Build Back Better Act would increase, not reduce, federal deficits

November 19, 2021 GMT

CLAIM: The Congressional Budget Office estimated that the Build Back Better Act “will REDUCE the deficit by $100B+ over 10 years.”

AP’S ASSESSMENT: False. The nonpartisan agency estimated that the bill would increase the deficit by some $160 billion over that period. The White House itself has projected a more-than $100 billion deficit reduction, but it is estimating that the IRS would collect more in new revenue than the CBO does.

THE FACTS: In the lead-up to the House’s passage Friday of the Build Back Better Act — a sweeping social and environmental package — Democrats and others on social media misrepresented the findings of an analysis assessing the bill’s financial impact.

“The CBO estimated that President @JoeBiden’s Build Back Better Act will REDUCE the deficit by $100B+ over 10 years,” the official Twitter account for the Democratic National Committee claimed in a tweet. It went on to criticize Republicans for not supporting the package despite backing tax cut legislation in 2017, which the CBO estimated at the time would add $1.4 trillion to the national debt over the following decade.

That claim about the CBO analysis of the Build Back Better Act was shared widely by others on social media as well.

But the agency actually found the bill would increase the deficit by about $160 billion, as The Associated Press reported.

The office in a Thursday analysis projected that the legislation would increase deficits by some $367 billion over the next decade — but estimated that increased IRS tax enforcement would collect about $207 billion in new revenue in that time.

An estimate put forward by the Biden administration, meanwhile, figured the increased IRS enforcement would bring in at least $400 billion.

A White House spokesperson said on Twitter that the administration estimates a $112.5 billion deficit reduction. But, she explained, its math combines a Treasury Department estimate of $479.6 billion in new revenue with the CBO’s projected $367 billion in added deficit.

A DNC spokesperson confirmed to the AP that its tweet was also based on the administration’s estimate of IRS revenue.

Bill Hoagland, a senior vice president at the Bipartisan Policy Center, affirmed in a statement to the AP that the idea that the bill would actually reduce the deficit relied on the Treasury Department’s “more optimistic projections.”

“Only if that unofficial, more favorable figure ends up being correct could one accurately claim that this would produce savings over the budget window,” he said.

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This is part of AP’s effort to address widely shared misinformation, including work with outside companies and organizations to add factual context to misleading content that is circulating online. Learn more about fact-checking at AP.