Biden's feel-good math on the $3.5 trillion spending package President Biden and congressional Democrats wave away the $3.5 trillion price tag on their spending package, claiming it would not cost taxpayers a penny in the end. "My Build Back Better Agenda costs zero dollars," the president tweeted this week. Raising taxes on high earners and corporations, and closing loopholes, as Biden's plan calls for, certainly would defray the cost. However, as the months have gone by, the goalposts have moved and moved again as lawmakers wrangle their priorities into legislative text. So the initial spending plan Biden proposed shortly after taking office — a combination of infrastructure and social spending — now operates under different math. The $550 billion infrastructure bill that passed the Senate and is pending in the House would not raise any taxes (the price of getting Republican votes) and would add around $400 billion to the deficit. In theory, the tax cuts and other revenue-raisers in the separate, $3.5 trillion reconciliation package would cut the combined price tag down to size. But there is an element of uncertainty — a big one. The impact on the deficit is projected to be as low as zero or as high as $1.75 trillion over 10 years for that piece of Biden's agenda. The White House says Biden is committed to getting to zero, but the plan as it stands today does not get him there. He earned Two Pinocchios. Enjoy this newsletter? Forward it to someone else who'd like it! If this email was forwarded to you, sign up here. Did you hear something fact-checkable? Send it here; we'll check it out. Deceptive ad warns of 'hurricane tax' In competitive districts in Florida and Texas, a new ad campaign from a conservative group warns that Democrats' proposed tax increases could have the unexpected effect of driving up homeowners' insurance costs, especially in states hit hard by natural disasters. A Florida veteran and retiree featured in one ad, from the conservative American Action Network, says: "The Democrats' proposed budget would make it more expensive for us to protect ourselves against hurricane damage. It would be like a hurricane tax on homeowners." We were skeptical from the start because the first footnote for the ads reads, "The Washington Post, 9/13/21." But The Post never reported on any hurricane tax proposal. The real source for the these claims comes in the second footnote: a study from the R Street Institute, a conservative Washington think tank. Raising the corporate tax rate would make insurers pass on some of the higher costs to their customers, according to this study. Meanwhile, setting a global minimum tax would hike costs some more because it would weaken the competitiveness of low-tax jurisdictions such as Bermuda, where the reinsurance industry thrives, it says. But there's much more to this simplified story. Yes, costs could rise for consumers. Or it could be insurance company shareholders who feel the bite much more. Yes, reinsurers in low-tax jurisdictions could jack up their rates after moving to higher-taxed countries. But that trend began when President Donald Trump and Republicans cut taxes and closed some loopholes in 2017. Finally, the AAN ads make no mention of hefty tax credits for households with children. We gave them Two Pinocchios. We're always looking for fact-check suggestions. You can reach us via email, Twitter (@GlennKesslerWP, @rizzoTK, @AdriUsero) or Facebook. Read about our process and rating scale here, and sign up for the newsletter here. Scroll down for this week's Pinocchio roundup. | 
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