A List of 10 Familiar Budget Gimmicks, Debatable Assumptions in New Biden Budget

Here are 10 familiar budget gimmicks and debatable assumptions in the fiscal year (FY) 2024 budget Biden budget, some of which have been used (or, more appropriately, misused) by policymakers in both parties in recent years.

Potentially Optimistic Economic Assumptions

As NTU Foundation wrote this week, the White House has notably more optimistic assumptions than the nonpartisan Congressional Budget Office (CBO) for how economic growth (real gross domestic product), inflation, and unemployment will trend in the next two years.

2023-24 Economic Projections, CBO and White House

CBO Feb. 2023


White House March 2023


2023 Real GDP growth



2023 CPI-U growth



2023 Unemployment Avg



2024 Real GDP growth



2024 CPI-U growth



2024 Unemployment Avg


If trends are closer to CBO projections than White House projections, federal spending will likely be higher than the White House projects and federal revenues will likely be lower than the White House projects, increasing deficits in the near term.

Unrealistic Revenue Assumptions Based on Current Law, Not Policy

The White House budget baseline is based largely on current law, not current policy, meaning the baseline assumes the individual tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) expire in 2025. This is detectable in the administration’s baseline projections, which have individual income tax revenue rising by 21 percent ($519 billion) from fiscal year 2025 to fiscal year 2027 even as payroll tax revenue increases only nine percent.

As The Wall Street Journal’s Richard Rubin reported and The Washington Post’s Catherine Rampell noted on Thursday, the Biden administration signaled for the first time in its budget request that they intend to extend the 2017 individual tax cuts for low-, middle-, and upper middle-income households (essentially all households making under $400,000).

This could reduce revenues by around $1.5 trillion, but the Biden administration does not build into their baseline an assumption that individual tax cuts for households making under $400,000 will be extended. If President Biden intends to stick with this policy of extending the individual tax cuts for the majority of American households, he and other policymakers will need to make up for that additional gap in the budget.

Not Making the Child Tax Credit Expansion Permanent

Like Congressional Democrats before him, President Biden proposed extending the expanded Child Tax Credit (CTC) an additional three years, from 2023 through 2025, even though the president and officials in his administration very likely support making the expanded CTC permanent.

The cost of this expansion is presented as $429 billion in the budget request, but CBO recently projected that a permanent CTC expansion like the one Biden is asking for would cost nearly $1.6 trillion in the first decade alone. The cost of permanent expansion would also be lower in the first three years than later years because the baseline through 2025 is a $2,000 CTC as enacted in TCJA. After 2026, the baseline is a $1,000 CTC, meaning a $3,000 CTC as proposed by President Biden is more expensive in later years than it is through 2025.

Extending the Mandatory Spending Sequester Nine Years From Now

Unfortunately, the Biden budget includes a paper savings trick long utilized by members of both parties to make it appear as if current spending is paid for: extending the Budget Control Act’s mandatory sequester in the ninth and/or tenth year of the 10-year budget window. This proposed extension would net the Biden administration nearly $49 billion in spending reductions that they can book for either additional spending or deficit reduction today, even though extending the sequester will become increasingly politically risky in the long run. NTUF worries that the escalating spending cuts required by extending the sequester will make it politically easier for Congress to simply and permanently cancel the sequester in some future budget deal. At minimum, policymakers should be extending the sequester in a short-term time window that ensures taxpayers will actually realize savings.

Extending IRS Enforcement Funding Nine Years From Now

The Biden administration also proposes extending additional IRS funding for increasing enforcement activities in the ninth and tenth year of the budget window, building on the agency’s enforcement funding boost provided in the IRA. NTUF’s Demian Brady wrote about this at length on Thursday.

The administration estimates that two years and $29 billion of additional enforcement funding will bring in an additional $134 billion in revenue in FYs 2032 and 2033, an $105 billion net return on investment. As Brady notes, “CBO will likely estimate a lower number when it analyzes the President’s proposal in the coming months.”

Budget hawks should be concerned that extending IRS enforcement funding, one or two years at a time, in the ninth or tenth year of a budget window, becomes a new budget gimmick where Congress says, “I’ll gladly pay you ten years from now for a hamburger today.”

Extending Customs Fees Nine Years From Now

Much like the sequester and IRS enforcement funding extensions outlined above, the administration also proposes extending Customs and Border Protection (CBP) fees in the ninth and tenth year of the budget window, netting them nearly $15 billion in paper savings.

NTUF’s Demian Brady has recommended ending this practice of extending CBP (customs) fees in the ninth and tenth year of a budget window:

“Furthermore, Congress should consider changing budget rules so that customs user fees are scored on a so-called ‘current policy’ baseline instead of a ‘current law’ baseline. A current policy baseline provides more realistic budget projections that are based on the policies that Congress tends to enact, rather than based on a strict reading of current law. Without reforms, some Members of Congress will continue to use this budget gimmick in perpetuity in order to facilitate big spending packages. Instead of allowing the practice to continue, budget-conscious Members should advance changes that ensure these fees are included permanently in the baseline to prevent the use of this ploy.”

It is disappointing to see the administration lean on the customs fees gimmick as well.

Shifting Indian Health Service Funding From Discretionary to Mandatory

The Biden administration “proposes all Indian Health Service (IHS) resources as mandatory beginning in 2025” in order to “guarantee adequate and stable funding.” NTUF worries that in practice this shift for IHS funding from discretionary to mandatory will give the false impression that discretionary spending is declining, giving some lawmakers a helping hand in arguing for increases to non-defense discretionary spending (or “parity” with defense spending increases), increasing government spending levels overall.

Creating a Special Discretionary Spending Category for Veterans Health Spending

The Biden administration also proposes creating a special, third category of discretionary spending – Veterans Affairs Medical Care. NTUF wrote about this proposal at length on Thursday.

Our primary concern is that this proposal, like the IHS proposal immediately above, will give the policymakers the false impression that non-defense discretionary spending is declining. This will put upward pressure on non-defense discretionary spending levels overall, either by boosting the case of policymakers who want to increase non-defense spending or by altering the “parity” debate between defense and non-defense spending.

Shifting the Timing of Pension Benefit Guaranty Corporation Premium Payments

For the second straight year, the Biden administration proposes shifting the timing of Pension Benefit Guaranty Corporation (PBGC) single-employer premiums. This proposal actually does not increase or decrease deficits in the 10-year window – it is a budget-neutral proposal – but does appear to put off premium increases that would reduce federal spending.

The current shift would increase spending by $3.7 billion in FY 2025 (presumably because PBGC premiums will be lower than they otherwise would be) and decrease spending by the same amount in FY 2026. Unfortunately, it is a proposal that appears to just kick the can for a tough policy choice down the road by one year.

Ending Deficit Reduction Contributions From Passenger Security Fees

The administration makes their proposed increase to the Department of Homeland Security (DHS) budget appear smaller than it is by crediting DHS with an increased amount of “offsetting collections” from passenger security fees charged by the Transportation Security Administration:

“The Budget requests $60.4 billion in discretionary budget authority for 2024, a $0.6 billion or one-percent decrease from the 2023 enacted level.  This includes $1.6 billion in additional Transportation Security Administration (TSA) Passenger Security Fee offsetting collections gained from ending mandatory contributions to deficit reduction.  When controlling for the Passenger Security Fee proposal, the DHS request is an increase of two-percent above the 2023 enacted level.”

This proposal increases federal spending (and deficits) by $6.5 billion over the 10-year window.

Conclusion: Over $1.3 Trillion in Paper Savings?

Overall, just a few budget gimmicks alone – specifically, the temporary CTC expansion, mandatory sequester extension, IRS enforcement extension, customs fees extension, and passenger security fee proposal – add up to over $1.3 trillion in paper savings, at least relative to a baseline in which the CTC expansion was permanent, the passenger security fee remained dedicated to deficit reduction, and the administration avoided ninth and tenth year extensions.

The Biden administration is far from the only policymaking body to use budget gimmicks and debatable assumptions in a proposal – Congress does it all the time, often on a bipartisan basis – but taxpayers deserve better from members of both parties.