In the fall of 2021, West Virginia senator Joe Manchin said that the “Build Back Better” bill employed “budget gimmicks” and “shell games” to hide the true cost of the bill. Manchin was specifically referring to the fact that many programs in the bill that were intended to be permanent expired after a few years.
Yet the expansion of Obamacare subsidies in the Manchin–Schumer “Inflation Reduction Act” are extended only until 2025, and the price tag for the three-year expansion is pegged at $64 billion. But according to a Penn-Wharton analysis, this expansion of Obamacare will actually cost $228 billion over ten years if the subsidies are made permanent. Combined with the $369 billion on “climate and energy” spending and $80 billion more for the IRS, the Inflation Reduction Act would spend about $680 billion more over the next decade if the three-year extension of Obamacare subsidies becomes a ten-year extension.
The Penn-Wharton model also shows that the Inflation Reduction Act would add to the deficit until 2026, after which time the bill’s Medicare price-fixing proposal and extra money spent on IRS enforcement are estimated to yield the federal government more savings each year than it spends in the bill.