CBO: Over 90 Percent of Promised Deficit Reduction in Manchin–Schumer Would Come after 2026

Senator Joe Manchin has been making the rounds promoting the deal he struck with Senate majority leader Chuck Schumer as inflation-fighting legislation, in part because it reduces the deficit through tax hikes and price fixing. But a closer look at a fresh analysis of the bill from the Congressional Budget Office shows that over 90 percent of the promised deficit reduction in the bill would come after 2026 — meaning it would do absolutely nothing to help reduce the current inflation problem.

The basic mechanics of Manchin–Schumer is that it spends hundreds of billions of dollars on green-energy initiatives and an Obamacare expansion, which is then offset by tax hikes, claimed savings from having Medicare fix drug prices, and increased IRS enforcement. Taken together, CBO expects these measures will reduce deficits by about $305 billion, of which $204 billion would come through the expected boost in revenue from the enforcement provisions.

But the way the bill is structured, the spending increases occur immediately, while the claimed savings take time to take effect — exactly the sort of “shell games” Manchin warned about last year when he blasted Democrats for not considering the permanent cost of expanding government programs (as this bill does with Obamacare).

Of the $305 billion in promised deficit savings over the next decade, CBO says just $21 billion will be coming over the next five years, when we’re in the midst of a historic inflation crisis, while the remaining 93 percent of the claimed savings won’t come until after 2026. Whatever else may be said about the bill, the idea that it will help address the current inflation problem is absurd.