Macroeconomic Effects of the White House Build Back Better Budget Reconciliation Framework

From Penn Wharton.

"Summary: PWBM estimates that the White House’s Build Back Better reconciliation framework would increase spending by $1.87 trillion over the 10-year budget window and revenues by $1.56 trillion over the same period. By 2050, the proposal would increase federal debt by 2.0 percent and decrease GDP by 0.1 percent, relative to the current law baseline.

Key Points

• PWBM estimates that, as written, the White House’s Build Back Better reconciliation framework would increase spending by $1.87 trillion over the 10-year budget window while increasing revenues by $1.56 trillion over the same period.
  
  

• We project that the reconciliation package will increase federal debt by 2.0 percent and decrease GDP by 0.1 percent in 2050, relative to the current law baseline.
  
  

• Under an alternative, illustrative scenario in which all spending provisions in the White House framework are permanent except the clean energy tax credits, new spending would instead increase by $4.26 trillion and new revenue would still increase by $1.56 trillion over the 10-year budget window. The federal debt would be 25.2 percent higher and GDP 2.8 percent lower in 2050, relative to current law."