President Joe Biden’s American Families Plan would cost $2.5 trillion over the next 10 years, or about $700 billion more than the White House’s estimate, according to a study out Wednesday from Penn Wharton Budget Model analysts.
The analysts also found the plan’s productivity gains would not be enough in the long run to offset the negative effect of higher government debt on gross domestic product. GPD would end up 0.4% lower in 2050, they said.
When asked about the findings, White House press secretary Jen Psaki said the Biden administration strongly disagreed with them, and she pointed to a more favorable Moody’s analysis of the American Families Plan.
“Our issue with the Penn Wharton model was the data it was based on, and that it was off,” she told reporters during a briefing.
Biden’s proposal is aimed at domestic priorities like education and child care, to be paid for by extra taxes on the wealthy, with the White House saying its price tag is $1.8 trillion.
See: Here’s what’s in Biden’s ‘American Families Plan’
traded modestly higher Wednesday after falling a day ago, when Treasury Secretary Janet Yellen said interest rates could rise a bit if the economy overheats.