We are now two days into October 2021; and two days into the new federal fiscal year, FY2022. It seems like a good time to take stock.

We've got the President's complete, authentic online version of the FY2022 budget available digitally from the OMB. And the government is temporarily funded (till December 3rd). So the shutdown has been averted for now. And the usdebtclock is still ticking away.

Note: As of this writing, that debt clock says the US FEDERAL SPENDING (OFFICIAL) is about $6.87T, and the FEDERAL BUDGET DEFICIT (OFFICIAL) is about $3.0T. These figures may be helpful for comparison. We don't actually need to discuss the debt to answer my question.

(It appears that "OFFICIAL" means these two figures are sourced from the U.S. Treasury. Are these annualized figures as opposed to the "actual" figures listed on the same page? Surely we haven't spent trillions of dollars in the first few days of the fiscal year.)

But there are Democrats in Congress still arguing about a 3.5 trillion dollar package! So my question is, at a high level, what does that $3.5T figure mean? ( Let's assume the package gets passed through both houses and signed by the President.)

  • Is the $3.5T already in the President's budget; or
  • Is it an additional one-time $3.5T expenditure in FY2022; or
  • How long does it take to spend the $3.5T; and
  • How long does he plan to take in paying off the borrowing necessary to spend the $3.5T?
  • Are the answers in his budget or somewhere else?

Fact & Opinion & Separation of Powers

I've asked for a factual response to the seemingly simple question about the fiscal topics so much in the political news recently. I can certainly up the ante with a bounty on the question to gain more eyes on the subject. But, before I do, I want to establish the ground rules...

  1. Please do not use comments on this question to express opinions on the topic raised. Instead, a chat room should be set up for that purpose.

  2. It's a factual question, seeking documented facts citing someone with legal authority to make such statements. In other words, please don't quote a newspaper editorial unless it cites someone with legal authority, like the head of the Office of Management and Budget.

  3. If the initial 3.5 trillion dollar example is too hard to support, try the earlier 1.2? trillion in dollar "infrastructure" bill. That at least must have a definition somewhere, as the Senate already passed it.

  4. The numerical amounts in some official financial statements don't have to match the political numbers to count. I fully expect that politicians will slant numbers, the question becomes by how much.

@Fizz's comment that "only a few people understand how that's calculated" may be true, it's certainly not an acceptable answer, but it well states the problem. But without proof that such rare people really understand it and have the authority to make fiscal claims for the US, a reasonable but unproven assumption would be that default has already occurred. A classic default on the obligations of the US is clearly within reasonable possibility in the immediate future.

I'm not saying the posit of default is proper but trying to apply the scientific method. A hypothesis that should in principle be disprovable with factual evidence. Answers to the above questions, supported with facts, might prove a foundation for proving my broader hypothesis wrong.

  • Frankly it looks like only a few people understand how that's calculated thehill.com/opinion/campaign/… According to that piece the answer below is actually wrong "When the Congressional Budget Office (CBO) scores the bill, there will be three headline numbers — the net spending increase, the net tax increase and the bill’s overall cost — none of which will be close to $3.5 trillion." I guess will see when CBO actually does that. Commented Oct 3, 2021 at 6:56
  • Thanks, Fizz, that's interesting. I think there's been a law on the books that puts the OMB in charge of budget estimates for the entire government: The General Accounting Act of 1921. Commented Oct 3, 2021 at 15:10
  • And according to the excellent article Fizz referenced, "The budget resolution Congress just passed limits the net price tag of the reconciliation bill to no more than $1.75 trillion." Commented Oct 3, 2021 at 15:13
  • Your 'reasonable assumption that default already occured' might be reasonable if it were applied to an entity that is not the federal government. As the federal government it has a number of options loosely described as 'printing money' that can avoid a default even if an individual or a corporation in the same financial situation would be in default. Governments don't default unless they want to.
    – quarague
    Commented Oct 5, 2021 at 7:11
  • @quarague: on debt in a currency that they control. There are plenty of examples of governments defaulting on external debt (denominated in a foreign currency)... defaults which can't be easily called intentional. Commented Oct 6, 2021 at 18:29

3 Answers 3


Senate Democrats have released a memorandum explaining the $3.5 trillion framework.

To provide some background on how the topline number came about, the memorandum sets forth the breakdown of the $3.5 trillion spending:

  • Agriculture Committee receives an instruction of $135 billion
  • Banking Committee receives an instruction of $332 billion
  • Commerce Committee receives an instruction of $83 billion
  • Energy Committee receives an instruction of $198 billion
  • Environment and Public Works Committee receives an instruction of $67 billion
  • Finance Committee will receive an instruction that requires at least $1 billion in deficit reduction
    • $1.8 trillion in investments for working families, the elderly and the environment
  • HELP Committee receives an instruction of $726 billion
  • HSGAC Committee receives an instruction of $37 billion
  • Judiciary Committee receives an instruction of $107 billion
  • Indian Affairs Committee receives an instruction of $20.5 billion
  • Small Business Committee receives an instruction of $25 billion
  • Veterans Affairs Committee receives an instruction of $18 billion

Adding these instructions up gives a grand total of $3.5485 trillion.

It's worth noting that the $3.5 trillion number only reflects the "level of new investments" and "does not represent the net budgetary impact" as offsets are not accounted for.

It should be noted that the $3.5 trillion framework agreement total represents the level of new investments, but does not represent the net budgetary impact of the expected reconciliation bill because the reconciliation bill will also include substantial offsets.

To answer your questions,

  1. Is the $3.5T already in the President's budget; or Is it an additional one-time $3.5T expenditure in FY2022;

    Section 1. Concurrent Resolution on the Budget for Fiscal Year 2022. This section declares that this resolution is the concurrent resolution for fiscal year 2022 and sets forth budgetary levels for the fiscal years 2023 through 2031.

  2. How long does it take to spend the $3.5T; and

    10 years, from 2022 through 2031.

    Section 1101. Recommended Levels and Amounts. This section sets the budgetary levels for fiscal years 2022 through 2031. These budgetary levels include total federal revenues, new budget authority, budget outlays, deficits, public debt (debt that is subject to a statutory limit), and debt held by the public. The budget resolution assumes discretionary levels as proposed in President Biden’s budget request and passage of policies in the envisioned reconciliation bill.

  3. How long does he plan to take in paying off the borrowing necessary to spend the $3.5T?

    This section provides reconciliation instructions to 11 committees to submit changes in laws within their jurisdictions that will increase the deficit over the period of fiscal years 2022 through 2031 by no more than the specified amounts for each committee. In addition, the Committee on Finance is instructed to submit changes in laws within its jurisdiction to reduce the deficit by at least $1 billion over that same time period.

    The framework states the following means to offset the cost of the budget:


    • Corporate and international tax reform
    • Tax fairness for high-income individuals
    • IRS tax enforcement
    • Health care savings
    • Carbon Polluter Import Fee

Finally, the whole memorandum is worth a read.

  • Thanks. Why isn't it signed? A quick scan of the memo raises a rather obvious question: who's it really from, and what authority do they have? I'll read further, but I'm already skeptical if it fits parameter #2 for being fact-based and authoritative. Commented Oct 5, 2021 at 6:45
  • Here's a model that seems to match the offsets section budgetmodel.wharton.upenn.edu/issues/2021/8/16/…. Wharton is a fairly impressive name, but hardly authoritative in a legal sense. Commented Oct 5, 2021 at 6:55
  • @Burt_Harris The topline number $3.5 trillion came from Democrats themselves, not an independent cost projection. This memorandum, meant for Democrat senators, was released together with the resolution and is hosted on the Democratic caucus' website. This's probably as authoritative as it can get at the moment until further independent official projections are made available.
    – Panda
    Commented Oct 5, 2021 at 7:11
  • Wait a minute, what about the CBO? CBO might have authority (to score), but I doubt partisan party has any authority to account alone. Commented Oct 5, 2021 at 7:19
  • @Burt_Harris The CBO has not yet produced a formal cost estimate and analysis of the spending and revenue of this bill.
    – Panda
    Commented Oct 5, 2021 at 7:25

When someone talks about the cost of a bill, they are almost always talking about the Congressional Budget Office's (CBO) 10-year cost projection number. The CBO is a non-partisan office that attempts to provide an impartial estimate of the cost of a bill. So the $3.5 T number reflects additional spending beyond the current budget but accumulated over 10 years.

In a perfect world where no one was trying to game the system, this would mean something like $300 B in additional FY2022 spending, slowly increasing to $400 B in FY2031 with the $3.5 T total cost. In the real world, however, politicians writing bills on both sides of the aisle know that the CBO uses a 10 year horizon so they game the system. They introduce new spending (remember that tax cuts are spending too) that don't actually start for 5 years or that phase in over many years in order to game the result. From the CBO's cost projection standpoint, it doesn't matter if some cost explodes in year 11 so long as it doesn't affect the 10 year budget. So practically, it is likely that a decent amount of the cost of a bill would end up backloaded into the end of the 10 year period in order to keep the CBO's cost estimate down.

The Democratic leadership has stated that the $3.5 T bill will be mostly if not fully paid for by various revenue raisers (i.e. additional taxes and fees). If that's the case, there would be 0 net impact to the deficit. Practically, I think it's reasonable to expect that it will be much easier to get politicians to agree to spend $3.5 T than to raise $3.5 T in taxes so "mostly" is likely to get stretched to the breaking point. And it is likely to expect a similar amount of gamesmanship in the revenue side of the bill. For example, when Obamacare was passed, one of the provisions that was included to raise revenue was the CLASS Act-- a long-term care insurance program. Since people would pay voluntary premiums during the 10 year CBO period and (primarily) file claims after the 10 year window, it looked like this raised a significant amount of revenue to offset Obamacare spending. Of course, that ignored the fact that all that revenue (plus some) would need to get saved in order to pay the claims that would be filed subsequently.

Since there is no bill to examine at the moment, no one can reasonably estimate how the CBO would score overall impact to the deficit. And no one can reasonably estimate what the impact would be if the estimate wasn't tied to the CBO's rules. No one can guess how long it would take to pay off the spending that increased the deficit because no one knows how much such spending there will be.

  • Welcome @Contrarian. An interesting point I've heard elsewhere is that rather than the 10-year timeframe you mention in your first paragraph, the democrats (in a partisan move) have somehow switched to a 15-year projection. But exactly how that works isn't clear, especially as CBO is supposed to be non-partisan. Commented Oct 3, 2021 at 15:17
  • I've broadened the question. If you can show me where the CBO has authority to make financial statements for the united states, I'm open to such authority on the infrastructure package. Commented Oct 5, 2021 at 0:49
  • If there are no other answers, use the CLASS act as your example. But I want links and quotes from an authority, not just an NGO. Commented Oct 5, 2021 at 0:51


This isn't official, I think the implication is that there's no offsetting revenue in this draft concurrent resolution!

Here is a key screen shot:

enter image description here

From Scribd has a snapshot of the Senate blueprint at https://www.scribd.com/document/519447809/HEN21B52#from_embed

Previous update:

I've found some non-official budget models that seem to provide some interesting content. For example, Wharton (business school?) at UPenn has an analysis of the effects of the president's 2022 Budget Plan which includes the American Families Plan and American Jobs Plan. Here is the key table:

enter image description here

  • So the skeptic in me says, wait a minute. This revenue is already in the baseline budget. How can democratic leaders claim it offsets their $3.5T social plan? It suggests to me the possibility that, relative to the current plan, the $3.5T may not actually offset any of the expense. Commented Oct 5, 2021 at 7:13
  • The American Jobs Plan (titled Infrastructure Investment and Jobs Act) is the bipartisan infrastructure bill which has passed the Senate and is awaiting passage in the House. The American Families Plan is the precursor to this $3.5 trillion bill.
    – Panda
    Commented Oct 5, 2021 at 7:22

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