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Cost of Biden's COVID-19 rescue bill revised up to $2.1 trillion

Cost of Biden's COVID-19 rescue bill revised up to $2.1 trillion
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President BidenJoe BidenFormer Rep. Rohrabacher says he took part in Jan. 6 march to Capitol but did not storm building Saudis picked up drugs in Cairo used to kill Khashoggi: report Biden looking to build momentum for Putin meeting MORE's COVID-19 relief bill that became law in March will end up with a $2.1 trillion price tag over the next decade once interest costs are taken into account, the nonpartisan Congressional Budget Office (CBO) said on Friday.

The revised estimate — higher than the $1.9 trillion associated with the measure earlier this year — came in response to an inquiry from Sen. Lindsey GrahamLindsey Olin GrahamSenate confirms Garland's successor to appeals court Progressives want to tighten screws beyond Manchin and Sinema GOP senators applaud Biden for global vaccine donation plans MORE (S.C.), the top Republican on the Senate Budget Committee.

CBO said the spending plan would lead to $208 billion in borrowing costs.

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But the budget scoring office noted that its latest estimate does not take into consideration how implementation of the legislation will affect the economy.

A larger economy would likely lead to higher tax revenues, as well as lower spending on safety net programs and lower borrowing costs.

Without factoring those in, CBO said the debt burden would rise to 113 percent of gross domestic product (GDP) by 2031, up from a February projection of 107 percent.

Republicans have slammed Biden for the cost of his spending plans beyond the COVID-19 relief measure. The president has called for increasing non-defense spending by 16 percent in fiscal 2022, with more immediate measures totaling $4.1 trillion for infrastructure and family support.

Biden has said he wants to raise taxes on corporations and wealthy Americans to cover the $4.1 trillion price tag, an approach Republicans vehemently oppose.

In response to a second request from Graham, CBO found that raising non-defense spending in 2022 at the level sought by Biden would add another $655 billion in spending over a decade, assuming that the spending levels remained on par with inflation. Of that amount, $47 billion would be in interest costs alone.

Alongside the already-passed COVID-19 relief measure, the budget increase would raise the debt burden to 115 percent of GDP by 2031, according to CBO.

While Biden has not discussed how to pay for his proposed budget increase, he is slated to release a full budget proposal on May 28 that's expected to include a 10-year budget outlook, offering clues on whether Biden will seek to address the nation's long-term fiscal outlook and whether he plans to cover the costs of increased non-defense spending.

CBO also estimated that in the absence of higher taxes for corporations and wealthy Americans, deficit financing for Biden's infrastructure and families proposals would add $4.4 trillion to the deficit.

All told, the COVID-19 relief plan, non-defense budget increase and infrastructure and families proposals would add $7.6 trillion to the deficit and raise the debt to 130 percent of GDP by the end of the decade, assuming no action was taken to increase revenues, CBO said.

Biden has said that funding the two programs at $4.1 trillion solely through deficit spending is not an option.