President Joe Biden will broadly endorse the climate, social safety net and tax code changes the White House has pursued as part of his “Build Back Better” agenda in his budget proposal Monday, but he won’t specify the costs or revenues in a bid to avoid disrupting congressional negotiations.
Instead, the fiscal 2023 budget document will include a placeholder known as a “deficit-neutral reserve fund,” signaling Biden’s commitment to sweeping policy changes without spelling out the costs and benefits.
As a result, Biden’s budget tables won’t include the prices of proposals such as universal free preschool, an expanded Child Tax Credit, and funding to combat climate change, and also won’t assume deficit reductions from policies such as prescription drug reforms or tax increases on corporations and wealthy Americans.
The document will simply treat the agenda — which Biden has pledged would be fully paid for — as being deficit-neutral. That also means Biden’s proposals won’t impact long-term projections within the budget, including what a White House official said was an anticipated $1 trillion in deficit reduction over the next decade. The deficit projection was first reported by the Associated Press.
In leaving out the details of “Build Back Better,” Biden’s goal is to avoid upsetting delicate congressional negotiations, according to three people familiar with the strategy who asked not to be identified discussing the budget ahead of its release. The White House believes the approach will preserve maximum flexibility and avoid the budget release spoiling talks during a critical legislative window.
Sen. Joe Manchin, D-W.Va., sunk "Build Back Better" by declaring in December that he wouldn’t vote for the plan as it stood.
The risk for Biden is that the budget ploy is likely to prompt complaints of gimmickry. The costs of Biden’s proposals, if enacted, would have a significant impact on the federal budget: a framework released by the administration in October estimated that Biden’s proposed changes would cost $1.75 trillion, offset by nearly $2 trillion in changes to the tax code.
And while Monday’s release doesn’t incorporate line-item costs or savings from the legislation, the budget’s underlying assumptions about the pace of the U.S. economic recovery do assume a lift from passing some of the proposed "Build Back Better" policy changes.
The unconventional strategy reflects the unique political challenges Biden faces on Capitol Hill.
Had the White House fully integrated “Build Back Better” into its budget, it would risk alienating Manchin.
Manchin this week reengaged fellow Democrats about a scaled-back version of the legislation, focused on climate change and prescription drugs.
The White House might have used the budget to unveil just such a proposal, detailing a more limited agenda reflective of what could potentially pass muster with Manchin and other moderate Democrats.
But Biden has said publicly he remains committed to trying to find other ways to pass elements that may get left out of an agreement with Manchin. Omitting ideas like the child tax credit in the budget would also have risked accusations that Biden was abandoning his key priorities — and a revolt by progressive allies.
The White House was also reluctant to turn a budget that’s prepared over months and finalized weeks before its release into a negotiating tool or a reflection of rapidly changing conversations about a potential agreement.
There’s some precedent for omitting politically sticky items from a presidential budget proposal: Barack Obama’s White House declined to outline proposed costs for a health insurance overhaul in its early projections, as lawmakers were engaged in negotiations over what became the Affordable Care Act.
