Republican leaders within the House Financial Services Committee are requesting a report by the Congressional Budget Office (CBO) on the economic impact of new spending proposals put forward by Democrats.
Specifically, the congressmen, U.S. Rep. Patrick McHenry (R-NC), top Republican on the House Financial Services Committee, and U.S. Rep. Tom Emmer (R-MN), the ranking Republican on the Oversight and Investigations Subcommitee, are urging the CBO to analyze the effects of the proposed spending plan on GDP growth and consumer prices.
“Last September, the Congressional Budget Office issued a report entitled ‘The Effects of Pandemic-Related Legislation on Output.’ The reported analyzed the economic impact of the four spending bills Congress passed between March and April 2020, including the effect on gross domestic product (GDP), inflation, the debt and deficits. Since then, Congress has spent an additional $900 billion in December 2020 and $2 trillion in March 2021 in response to the global pandemic. Moreover, Democrats are on the cusp of spending an additional five trillion, some of which will be paid for through higher taxes, but mostly financed through additional debt,” the congressmen wrote to CBO Director Phillip Swagel.
Emmer and McHenry request that the CBO update its September 2020 report to include the effects of the December and March spending.
“Current CBO fourth quarter projections suggest GDP will grow to 7.4 percent, inflation will hold at 2.8 percent, and unemployment will drop to 4.6 percent. Recent data suggests the economy is slowing as prices continue to rise. Moreover, there continues to be a significant disconnect between employers and workers. We are concerned that massive new spending will only exacerbate this negative trend,” they wrote.
Also, they would like the CBO to make a projection of the economic impact the $1.2 trillion Infrastructure Investment and Jobs Act and the $3.5 trillion in new spending associated with reconciliation will have on the economy.