There's some disagreement about what to call the ambitious Democratic legislation pending on Capitol Hill. The breadth of the legislation — touching on everything from health care to education, climate to housing — makes it difficult to label. I tend to like the "safety net and climate" plan, but it's admittedly a little clunky.
Some call it the "reconciliation" bill, since that's the legislative process Democrats are trying to use to pass it, while others refer to it as the "Build Back Better" bill. The trouble, of course, is that much of the country has no idea what those labels mean.
What's far easier for folks in my line of work is to point at the purported price tag: $3.5 trillion. The fact that the investments would be spread out over the course of the decade is sometimes lost in the shuffle, but the topline total is a detail that often dominates the conversation, even overshadowing what the bill would do and the extent to which families would benefit.
But there's a related question that's in need of an answer: Would the plan really "cost" $3.5 trillion? According to President Joe Biden, whose domestic agenda is tied up in the legislation, the answer is no.
In fact, the Democrat made this point explicitly on Friday morning, telling reporters:
'We talk about price tags. It is zero price tag on the debt we're paying. We're going to pay for everything we spend. ... [E]very time I hear, 'This is going to cost A, B, C, or D,' the truth is, based on the commitment that I made, it's going to cost nothing.'
I can appreciate why any discussion based on the nuances of the word "cost" are going to cause some to roll their eyes, but it's important to acknowledge the fact that Biden's argument is sound.
The Washington Post's Catherine Rampell has been working on this for weeks, explaining the difference between net and gross costs. (Some conservative media figures, who really ought to know better, appear to be struggling with the concept.)
But the math isn't that complicated. For example, when we look at the Republicans' 2017 package of regressive tax breaks, we see a plan that cost roughly $2 trillion. Some on the right might be inclined to look at that total and see Biden's safety-net-and-climate plan as costing even more.
Except, the Trump-era tax breaks would've come with an even higher price tag were it not for other provisions, such as the cap on state and local tax deductions, that helped offset the overall cost. The $2 trillion figure refers to the net cost: That's $2 trillion, after offsetting revenue is included in the mix, that the United States was supposed to have, but which Republicans instead put in the pockets of the wealthy and big corporations.
The pending Democratic plan appears to carry an even greater price tag, but the $3.5 trillion figure is a gross cost, which doesn't include proposed tax increases on the wealthy and big corporations to help pay for the domestic investments. As far as the White House is concerned, that makes a world of difference: If Democrats intend to invest $3.5 trillion, but they also intend to pay for all that without adding to the national debt, then for all intents and purposes, the package costs nothing — since unlike the GOP's 2017 tax breaks, the safety-net-and-climate plan will be deficit neutral.
Now, some will argue that the Democratic legislation may not be entirely paid for, and the party may rely on a few budget games here and there. We haven't seen a final bill, but it's likely that some of those criticisms will be fair.
But in broad strokes, the bottom line remains the same: Biden and his party are making a good-faith effort to pay for practically all of these new investments, which is far more than anyone can credibly say about Republicans and their recent initiatives. When the president insists his plan will cost "nothing," he has a point.