Part of the fight over the $1.9 trillion “stimulus” package recently passed by President Biden and his allies in Congress was whether we could really afford nearly $2 trillion more in spending amid skyrocketing debt and already having spent record-levels of money ostensibly on ‘COVID’ relief. But according to a recent report, the latest legislation could prove even more expensive than we thought.
The $1.9 trillion estimate assumes that various tax credit programs will be allowed to expire. However, a report by American Enterprise Institute economist Alex Brill concludes that this is highly unlikely—and that if they’re eventually renewed, the bill’s cost could nearly double.
“Expansions of the child tax credit (CTC), earned income tax credit (EITC), and the child and dependent care credit would be enacted for just a single year under the guise of promoting economic security during the pandemic,” Brill explains. “However, the Wall Street Journal recently reported on Democrats’ desire to make permanent the CTC expansion. In addition, the House passed a permanent version of their expansion of the child and dependent care credit last year, and it is unfathomable to imagine Congress letting the one-year EITC expansion lapse post-2021.”
The benefits related to children would alone raise the total cost by roughly 75 percent from $1.9 trillion to $3.3 trillion over 10 years. https://t.co/hpJXa3AvMy— AEI (@AEI) March 5, 2021
Unfortunately, it is indeed unfathomable that Congress would allow these programs to fully lapse. There will be a strong political constituency for continuing the spending and because the costs are disparate, far less of one clamoring for them to be allowed to expire.
Hence, as Milton Friedman famously put it, “Nothing is so permanent as a temporary government program.”
So, we have to do the math on what it will mean if these expenditures are ultimately furthered. And Brill estimates that expanding these portions of the bill would increase its total cost by 75 percent, for an ultimate price tag of $3.3 trillion. That astounding figure comes out to roughly $23,028 per federal taxpayer.
That’s a lot more money—and more fundamentally and importantly, a lot more actual resources transferred from private ownership to government control.