President Joe Biden’s American Families Plan will cost $900 billion more than the White House estimates, CBS News reports.
An analysis by researchers at the University of Pennsylvania's Wharton School of Business found that the plan will cost $700 billion more in spending and bring in $200 billion less in revenues than the administration’s projections.
The White House estimates that plan will cost $300 billion over the next decade when accounting for revenue increases from proposed tax increases.
But the Penn analysis estimated that the plan will cost closer to $1.2 trillion.
Researchers reject WH cost analysis:
The Biden plan includes universal pre-K for kids starting at three years old and free community college tuition.
The Penn researchers argued that both programs will end up costing significantly more than the White House estimates, though they did not specify a number.
The study also found that Biden’s proposed tax credits for children and spending to fund additional Obamacare insurance premiums will cost more than the White House estimate.
The researchers said Biden’s plan would spend $2.5 trillion compared to the White House estimate of $1.8 trillion.
What about the taxes?
The Biden administration has proposed paying for most of the plan by raising taxes on those making over $500,000 per year.
The Penn researchers estimated that the tax proposals would bring in $1.3 trillion in revenue over 10 years, about $200 billion less than the White House estimate.
The main difference is how much the White House thinks it will bring in by boosting IRS audits and enforcement. The White House estimates that will generate $700 billion in additional revenue but the Penn study estimated it would generate $480 billion.
The study did not look at Biden’s proposed corporate tax increases, which are part of a different Biden plan.