The administration’s massive spending bill is „paid for“ by future tax increases. That argument works in D.C., if not in real life.
To understand how the government works, look no further than the assertion by both President Joe Biden and House Speaker Nancy Pelosi that the Democrats ‚ plan to spend $3.5 trillion over the next ten years will „cost zero dollars.“ The claim lit up social media with the predictable jokes—and widespread puzzlement. How could $3.5 trillion in new spending actually not cost anything? The answer is simple. Biden and Pelosi together have spent over 80 years in Washington D.C. And in Washington, concepts like how much something costs have a very specific, if very peculiar, definition. To Washington lawmakers, adjustments to the federal budget—whether a tax cut (the amount of tax revenue the government takes in) or a spending increase (the amount it sends out in various government programs) only „cost“ something if it isn’t „paid for.“ Consider the tax cuts passed during the Trump administration. To Democrats and other critics, the corporate and individual tax cuts Trump signed into law in 2017 weren’t paid for, in the sense that spending wasn’t cut by an amount commensurate to the loss in revenue the government incurred—$275 billion in just the first year after the cuts were enacted, according to a Brookings Institution analysis.
