US Congressional Budget Office: "Infrastructure Agreement to Increase Deficit by $256 Billion Over 10 Years"

President Joe Biden of the United States [Photo by EPA Yonhap News]

[Asia Economy Reporter Park Byung-hee] The Congressional Budget Office (CBO) of the United States analyzed that the infrastructure bill agreed upon by both the Democratic and Republican parties will increase the federal government's deficit by $256 billion (approximately 293 trillion KRW) over the next 10 years. This is expected to become a variable factor ahead of the final vote on the infrastructure agreement.

According to the Wall Street Journal on the 5th (local time), the CBO stated in a report released that day that the increase in tax revenue over 10 years under the infrastructure agreement is $50 billion, and spending cuts amount to $110 billion, while discretionary spending increases reach $415 billion. In conclusion, the CBO analyzed that a $256 billion increase in the fiscal deficit is expected over 10 years.

Due to the CBO's forecast of increased fiscal deficits, there are prospects that the passage of the agreement has become uncertain.

After approving a $1.9 trillion stimulus package in May, U.S. President Joe Biden proposed the American Jobs Plan ($2.25 trillion) and the American Families Plan ($1.7 trillion), which are human and physical infrastructure investment bills. The total budget for the two infrastructure bills reaches $4 trillion, facing strong opposition from Republican lawmakers concerned about the increase in the fiscal deficit.

The ruling Democratic Party adopted a strategy to reach bipartisan agreements on negotiable parts with the Republicans and handle those parts, while using their numerical majority as the majority party in Congress to independently process parts where there is disagreement.

Subsequently, the Democrats negotiated with the Republicans and prepared an approximately $1 trillion infrastructure agreement at the end of last month. The Senate passed the agreement with a procedural vote of 67 in favor and 32 against on the 28th of last month. At that time, 17 Republican House members, including Senate Minority Leader Mitch McConnell, voted in favor.

However, since the CBO pointed out that the agreement, which passed the procedural vote, would also cause a large fiscal deficit, there is now a variable regarding whether it will pass the final vote.

The Democratic Party plans to pass the agreement and then forcibly process separate bills on parts where they could not reach an agreement with the Republicans.

This content was produced with the assistance of AI translation services.