Report: Dems Give $1T in Taxpayer Funds for ‘Green’ Subsidies
Back in the Obama era, then-Vice President Biden famously declared that we had to “spend money to keep from going bankrupt.” And now, as president, he’s certainly living up to his words when it comes to spending.
Last week, Congressional Budget Office (CBO) Director Phillip Swagel testified before lawmakers, revealing that the cost of the green pork provisions in the Democrats’ 2022 Inflation (Reduction) Act is estimated to reach a staggering $1 trillion. It’s no surprise that the Biden administration has found even more ways to spend money beyond what was originally projected by Congress and the CBO 18 months ago.
Preview of Fiscal Outlook
Swagel’s testimony mainly focused on the accuracy of CBO’s budget projections. However, he also provided a glimpse into the upcoming release of the budget and fiscal baseline. How does CBO foresee the nation’s fiscal status in the next decade?
In his preview, Swagel made a significant admission: “We are now projecting that several developments affecting energy-related tax provisions, many of which were part of the 2022 reconciliation act [i.e., the Inflation (Reduction) Act], will add about $400 billion to the deficit over the 2024-2033 period.”
Previously, CBO and the Joint Committee on Taxation (JCT) estimated that these provisions would cost around $570 billion over ten years, with $17 billion in outlay effects and $553 billion in reduced revenues. Adding an extra $400 billion in deficit spending would bring the total cost of these “green pork” provisions to nearly $1 trillion.
Unilateral Spending
There are three key points to highlight regarding this new estimate. First, the original $570 billion in spending was partially funded by raiding the Medicare program and creating a swarm of new IRS employees to squeeze more tax dollars out of Americans. Yet, even these burdensome measures won’t be enough to cover all the new green subsidies included in the Democrats’ law.
Second, CBO explains the reason behind the increased projections for these subsidies:
The largest part of the roughly $400 billion change results from a rule proposed by the Environmental Protection Agency after those baseline projections were finalized that would change standards for vehicle emissions. The rest of the change reflects market developments that increased our projections of the rate of adoption of technologies eligible for tax credits and implementation guidance from the Treasury Department that has been more generous to taxpayers than JCT anticipated in the original estimates for the legislation.
In other words, most of the higher costs of these subsidies stem from the EPA’s new vehicle emissions standards, which involve taking existing cars off the road and forcing people to buy new “green” automobiles. Additionally, the Treasury Department has expanded the number of entities eligible for the subsidies. These changes were made without explicit authorization from Congress and without any offset to their higher costs.
Lastly, even the $1 trillion figure may underestimate the full fiscal impact of these subsidies. According to a report from Goldman Sachs, the green subsidies could cost at least $1.2 trillion, which is 20 percent higher than CBO’s revised estimates. This suggests that the budget office’s estimates of this “green pork” may rise even further.
Stop the (Green) Giveaways
At a time when the federal government is drowning in $34 trillion of debt and running significant deficits, CBO’s reestimate highlights why Congress and the Biden administration should refrain from handing out more giveaways to those who spend their money on government-favored projects. It’s high time for Washington to put an end to this crony capitalism and focus on cutting spending instead of playing Santa Claus to lobbyists and their wealthy associates.
Chris Jacobs is the founder and CEO of Juniper Research Group and the author of the book “The Case Against Single Payer.” You can find him on Twitter: @chrisjacobsHC.
What potential consequences can arise from unilateral decision-making on vehicle emission standards, particularly in terms of economic implications and cost-benefit analysis
And fuel efficiency. Under those proposed standards, automakers would need to produce vehicles that are more fuel-efficient and emit less carbon dioxide and other greenhouse gases. The increase in the cost of the subsidy results from the larger number of green vehicles that would be purchased in response to the tighter standards.
This increase in the cost of subsidies highlights the potential consequences of unilateral decision-making. The EPA’s proposal to tighten vehicle emission standards directly impacts the cost of the green subsidies, ultimately leading to an additional burden on taxpayers. This unilateral approach disregards the potential economic implications and the importance of a balanced cost-benefit analysis.
The Concerns of Deficit Spending
The third important aspect to consider is the impact of this increased spending on the nation’s fiscal health. With the estimated costs soaring to almost $1 trillion, it raises serious concerns about the ever-increasing deficit and national debt. As the Biden administration continues to propose large-scale spending initiatives, it is crucial to carefully evaluate the long-term consequences and the sustainability of such actions.
Increasing deficit spending without a clear plan to address the growing debt could have severe implications for future generations. It threatens the stability of the economy, increases the burden on taxpayers, and limits the government’s ability to respond to unforeseen crises. It is necessary for policymakers to prioritize fiscal responsibility and consider the potential consequences of their spending decisions.
Conclusion
The recent estimate by the Congressional Budget Office highlights the escalating costs of green pork provisions in the Democrats’ Inflation (Reduction) Act. With an additional $400 billion projected to be added to the deficit over the next decade, the total cost of these subsidies could reach nearly $1 trillion. This unilateral spending approach, combined with the potential consequences for the nation’s fiscal health, calls for greater scrutiny and prudence in fiscal decision-making.
It is essential for policymakers to carefully evaluate the economic implications, consider a balanced cost-benefit analysis, and prioritize fiscal responsibility when proposing and enacting spending measures. Without a comprehensive approach to address the growing deficit and national debt, we risk burdening future generations and jeopardizing the stability of our economy. It is time for a more thoughtful and prudent approach to our nation’s finances.
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