Build Back Better plan 'mostly paid for' but some key provisions will expire relatively soon: Expert

Committee for a Responsible Federal Budget Senior Vice President and Senior Policy Director Marc Goldwein joins Yahoo Finance Live to break down the provisions and costs related to Build Back Better legislation.

Video transcript

ALEXIS CHRISTOFOROUS: President Biden's $1.7 trillion Build Back Better plan contains some measures designed to give Americans more financial security, including a long awaited and much debated provision for paid family and medical leave. But there are some analysts that are raising concerns about the fact that a lot of these key provisions will be expiring in only a matter of years.

Joining us now to break it down is Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget. Marc, it's good to have you here on the show. I want to ask you about the loss of these provisions and what they would mean to the average American if something like, say, the child tax credit were allowed to expire.

MARC GOLDWEIN: Well, look, this bill is trying to basically fit $5 trillion worth of stuff into a $2 and 1/2 trillion package. And so they're doing it by having things only be temporary. And expanded child tax credit [INAUDIBLE] only lasts for one year. Expansions to Obamacare, only three or four years. Universal pre-K and affordable child care only for six years. And when these go away, either there's going to be immense pressure to extend them at a high cost, or it's going to be really disruptive to those families that have grown to rely on these programs.

KARINA MITCHELL: And then, sir, you know, there's obviously going to be a lot of legal wrangling on all of this and political division. But if we were to extend them, what would it cost?

MARC GOLDWEIN: So we've done the math in this bill. And the way that we measure it, the bill as written costs about $2.4 trillion over 10 years. If you extend everything that expires, that would about double to $4.8 trillion. And if you don't pay for those extensions, almost $3 trillion of that would be added to the nation's credit card.

ALEXIS CHRISTOFOROUS: And what about the idea that, you know, Joe Biden kept saying, this thing is going to pay for itself. It's not going to add to the deficit. Are we going to have to pay for it on the backs of, I guess, millionaires and billionaires in the form of higher taxes?

MARC GOLDWEIN: So, as written, the bill is mostly paid for. It falls about $160 billion short, so they have a little bit more work to do, but they're close. The real issue is, are they going to pay for all of these extensions? Because clearly, most people that support this bill don't really want the child tax credit to go away after one year. They don't really want the Affordable Care Act changes to go away after four years. So the question is, are we going to pay for these new changes? If so, how? If not, can we really afford to keep adding that much to the debt?

KARINA MITCHELL: So, you know, the argument is that the American Rescue Act was enough, right, and that the infrastructure bill and then now, if passed, Build Back Better adds to already surging inflation. So what is the risk and reward here? Because clearly, things like family leave are important, child tax credit. These are things that are important.

MARC GOLDWEIN: All these bills are trying to accomplish different things. The American Rescue Plan was about COVID relief. And I do think it was actually far too large. And that's part of why we're seeing inflation now. The infrastructure bill is about roads and bridges, electrical grids, broadband. And this is more about climate change and family benefits. So they all have different purposes.

As for the inflationary effect, when you look at this final bill, the Build Back Better Act, it has elements that are going to boost inflation, elements that are going to shrink it. I think overall, it probably will increase inflation in the first few years likely only by a little bit. But given how inflation already is so high, you probably don't want to take that risk. And so, there are some easy changes we can make to this bill to make it less inflationary.

ALEXIS CHRISTOFOROUS: You know, I'm seeing a bit of a disturbing--

KARINA MITCHELL: Well, what are some of those changes?

ALEXIS CHRISTOFOROUS: Sorry, I was going to say, I'm seeing a disturbing--

KARINA MITCHELL: Go ahead.

ALEXIS CHRISTOFOROUS: Yeah, guys, I see a disturbing pattern of Congress sort of willing to make these short-term deals, right? I mean, you see these provisions. They're going to sunset in a short amount of time. You see them, the way they're dealing with a possible government shutdown and the debt ceiling, just sort of kicking the can down the road. What does this tell you in terms of the path we're on for a balanced budget?

MARC GOLDWEIN: Well, a balanced budget is long out the door. The bigger problem here is I think we just move further and further in the direction of governing by crisis, governing by arbitrary deadline. If we're really going to set ourselves up for one expiration after another, when is Congress going to have time again to actually think about what are the new policies that we need, as opposed to how do we figure out how to deal with this expiration or this extension? I do worry about that.

I also when you look at our debt situation, already debt is headed towards a new record, higher than World War II levels. That's before this bill. If we were to enact this bill and extend everything without offsets, and then if we were to start extending other things, we'd have debt levels headed to really unprecedented levels either by historic standards or international ones.

ALEXIS CHRISTOFOROUS: All right, Marc Goldwein of the Committee for a Responsible Federal Budget, thanks for your insights today.