U.S. infrastructure bill to add 256 bln USD to deficits over 10 years: CBO

Photo taken on March 16, 2020 shows the White House Visitor Center in Washington D.C., the United States. (Xinhua/Liu Jie)

The latest analysis from the CBO shows that just more than half of the new infrastructure spending would be offset by pay-fors.

WASHINGTON, Aug. 5 (Xinhua) -- The bipartisan infrastructure bill would add 256 billion U.S. dollars to U.S. budget deficits over 10 years, the Congressional Budget Office (CBO) said on Thursday.

The CBO estimated that the bill would increase discretionary spending by 415 billion dollars over the 2021-2031 period while increasing revenues by 50 billion dollars and decreasing direct spending by 110 billion dollars.

"On net, the legislation would add $256 billion to projected deficits over that period," the CBO said in an analysis.

The White House and a bipartisan group of senators have reached an agreement on a roughly 1.2-trillion-dollar infrastructure bill, which includes 550 billion dollars in new spending on infrastructure projects such as roads, bridges, passenger rails, drinking water and waste water systems.

The latest analysis from the CBO shows that just more than half of the new infrastructure spending would be offset by pay-fors.

The release of the CBO analysis was one of the key steps remaining before the Senate votes on the bill. It is unclear whether the analysis would prompt any Republicans who back the bill to reconsider their support, according to CNBC.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, has urged policymakers to identify additional offsets to fully cover the costs of the infrastructure bill and ideally reduce long-term deficits.

"Between income tax revenue, user fees, and spending reforms, there are plenty of offsets available," MacGuineas said in a recent statement.

However, the bill's two lead negotiators, Democratic senator Kyrsten Sinema of Arizona and Republican senator Rob Portman of Ohio, said that the CBO analysis did not account for all the ways the bill offset costs.

"The new spending under the bill is offset through a combination of new revenue and savings, some of which is reflected in the formal CBO score and some of which is reflected in other savings and additional revenue identified in estimates, as CBO is limited in what it can include in its formal score," the senators said Thursday in a joint statement.

"The American people strongly support this bipartisan legislation and we look forward to working with our colleagues on both sides of the aisle and President (Joe) Biden to get it passed through Congress and signed into law," they said.