Economy and Build Back Better

I am a regular reader of historian Heather Cox Richardson's substack "Letters from an American." Yesterday's has some very interesting observations about the economy and the Build Back Better CBO score, etc.  From watching and reading the standard media outlets you would think our overall situation is much worse than Richardson's analysis suggests. 

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 A report from the Organization for Economic Co-operation and Development on Thursday showed that the United States is the only G7 country to surpass its pre-pandemic economic growth. That growth has been so strong it has buoyed other countries.

Meanwhile, the administration's work with ports and supply chains to handle the increase in demand for goods appears to be having an effect. Imports through the ports of Los Angeles and Long Beach are up 16% from 2018, and in the first two weeks of November, those two ports cleared about a third of the containers sitting on their docks.

Then the Congressional Budget Office (CBO) released its score for the Democrats' $1.85 trillion Build Back Better Act. The CBO is a nonpartisan agency within the legislative branch that provides budget and economic information to Congress. The CBO's estimate of the costs of the Build Back Better Act will affect who will vote for it.

The CBO's projection was good news for the Democrats; it was in line with what the Democrats had said the bill would cost. The CBO estimates that the bill will increase the deficit by $367 billion over ten years. But the CBO also estimates that the government will raise about $207 billion over those same ten years by enforcing tax rules on those currently cheating on them. These numbers were good in themselves—in comparison, the CBO said the 2017 Republican tax cuts would cost $1.4 trillion over ten years—but they might get even better. Many economists, including Larry Summers, who has been critical of the Biden administration, think that the CBO estimates badly underplay the benefits of the bill.

The CBO score also predicted that the savings from prescription drug reforms in the bill would come in $50 billion higher than the House had predicted.

As soon as the score was released, House Speaker Nancy Pelosi announced that the House would vote on the bill tonight, suggesting that she had the votes to pass the bill.

And then something interesting happened. Kevin McCarthy took to the House floor to slow down the passage of the Build Back Better Act, throwing the vote into the middle of the night. The minority leader put on a Trump-esque show of non-sequiturs, previewing the kind of speech he would make to rally Republicans behind him if the Republicans retake the House in 2022. The speech was angry, full of shouting, and made for right-wing media: it was full of all the buzz-words that play there. McCarthy spoke for more than three hours—as I write this, he is still speaking.

But the blows he was trying to deliver didn't land. The Democrats made fun of him, catcalled, and eventually just walked out, while the Republicans lined up behind McCarthy looked increasingly bored, checked their phones, and appeared to doze off. When Axios reporter Andrew Solender asked a Republican aide for some analysis of the speech, the aide answered: "I'm watching the Great British Baking Show."

As he spoke, Pelosi's office fact-checked him, noting that while he is attacking the elements of the bill, saying no one wants them, the opposite is true. According to CBS News, Pelosi's staff wrote, "88 percent of Americans support Build Back Better's measures to cut prescription drug prices," "73 percent of Americans support Build Back Better's funding for paid family leave," and "67 percent of Americans support Build Back Better's funding for universal pre-K." In addition, according to Navigator Research, "84 percent of Americans support Build Back Better's provisions to lower health insurance premiums," and "72 percent of Americans support Build Back Better's creation of clean energy jobs to combat climate change.

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