Senate Republican leaders have sent a letter to the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) requesting more information on the potential budgetary and economic impacts of making the temporary expansion of premium tax credits (PTC), justified as pandemic relief by Democrats, permanent.
The letter was sent by Senator Richard Burr (R-NC), Ranking Member of the Senate Health, Education, Labor and Pensions Committee, Senator Mike Crapo (R-ID), Ranking Member of the Senate Committee on Finance, and Senator Lindsey Graham (R-SC), Ranking Member of the Senate Budget Committee.
“[R]ecord-high inflation, fueled by partisan spending and irresponsible policy initiatives, continues to erode working families’ wages and savings, imposing a regressive tax on those who least can afford it,” the letter states. “In light of these concerning conditions, policymakers must evaluate any new spending proposal with an especially critical eye towards its budgetary and economic impacts.”
The letter continues, “Our Democrat colleagues passed [the American Rescue Plan Act] quickly and in partisan fashion, with little time for public scrutiny and virtually no opportunity for feedback or input, including with respect to the legislation’s potential to exacerbate inflationary pressures and force monetary policy responses involving interest rate hikes that significantly raise federal financing costs. As CBO’s latest projections confirm, ARPA’s expansion of PTCs and subsequent regulatory actions have proven even more costly than previously projected.”
“Failing to control health care spending growth risks triggering severe and sustained macroeconomic damage,” the letter concludes. “A recent CBO report showed that raising taxes to cover our current spending obligations would, among other effects, result in reduced GDP, lower take-home pay, and a shrinking labor supply. Dramatically increasing spending on PTCs would intensify the economic harm imposed on future generations saddled by the federal debt.
“These profound and diverse risks demand a comprehensive accounting of the true costs of extending the expanded PTCs.”
To read the full letter, click here.