Congress's lame-duck session is an ideal time for both parties to pass last-minute legislation while voters are busy Christmas shopping and before members who lost their reelection bids surrender their seats in January. Especially this year, real danger lurks in such legislation. Above all, there's the threat that Congress turns the expanded child tax credit into a new and very costly permanent entitlement. But other threats loom. I'll look at a few of them today.
The first looming budget buster is the maintenance of discretionary spending at the exorbitant levels we saw during the pandemic, rather than a return to much lower -- as in 20% lower -- pre-pandemic spending. It might make sense during emergencies for Congress to increase spending. However, after the emergency passes, temporary programs -- or temporary expansions of previously existing programs -- should be allowed to expire and spending should fall back to where it was.
This increase over the spending that prevailed during the pandemic is especially outrageous considering the amount of fraud that took place thanks to COVID-19 relief programs. Indeed, some $80 billion -- or about 10% -- of the $800 billion Paycheck Protection Program was lost to fraud. Another $90 billion to $400 billion out of the $900 billion COVID-19 unemployment relief program was fraudulently spent.
by signing up you agree to our terms of service The second issue to watch is related to the first, but arguably even more expensive. Legislators are likely to try extending or delaying various expiring or emergency provisions while also waiving a rule, the PAYGO sequester, that would offset some of the money. Some of the relevant provisions include three from the Tax Cuts and Jobs Act of 2017 , such as a 100% bonus depreciation allowing business equipment purchases to be deducted immediately.