It’s trickle-down economics by another name.
Commentary:
By Rep. Chris Van Hollen and Rep. Louise Slaughter
In 2012, the Governor of Kansas enacted massive tax cuts tilted toward the wealthy, promising that they would provide a “shot of adrenaline” for the state’s economy. He shrugged off the fiscal risks on the advice of hand-picked economists who assured him that the tax cuts would pay for themselves. Two years later, the promised jobs haven’t materialized, Kansas’s economy is lagging behind the rest of the country, and even after brutal cuts to school funding, state finances are still in tatters.
This is the same approach that President George W. Bush tried at the national level, with the same bold predictions from trickle-down economists that the tax cuts would turbo-charge the economy, and the same weak economic results: the rich got richer, everyone else got poorer, and, since the tax cuts did not pay for themselves, the deficit exploded.
The evidence has clearly shown that these “trickle down” policies haven’t worked, but instead of changing their approach to budgeting, Republicans want to change the evidence. They want Congress’s nonpartisan scorekeepers—the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT)—to start engaging in wishful thinking with a fancy name: “dynamic scoring.” But trying to predict how tax changes will affect the overall economy is a highly speculative exercise, and Congress should not base the country’s fiscal policy on ideologically driven promises of future growth. It’s a practice that George H.W. Bush famously called “voodoo economics.”
It may be tempting to dismiss this change as just an accounting issue. But they are rigging the rules in favor of windfall tax breaks to the very wealthy and big corporations who can hire high-priced, well-funded lobbyists—once again choosing to leave behind working families. Their plan would further distort the nation’s fiscal outlook by applying this scoring model only to tax cuts—not the economic impact of investments in education, healthcare, infrastructure, and other areas. That means that the value of tax cuts to the economy would be exaggerated, and the value of investments in the middle class would be undercut.
Instead of offering a responsible budget, they’re trying to cook the books.
Put best by Bruce Bartlett, a former economic advisor to President Reagan, dynamic scoring “is not about honest revenue-estimating. It’s about using smoke and mirrors to institutionalize Republican ideology into the budget process.”
This is a partisan, misleading attempt to tilt the playing field in favor of more trickle-down economic policies, and the public shouldn’t buy it.
If “dynamic scoring” becomes part of the official budget process, proponents of trickle-down tax cuts will have political cover to make drastic changes to the tax code that benefit the rich. Shifting to this model would institutionalize that bias, and in turn would undermine the integrity of budget scorekeeping, hurt our ability to maintain fiscal discipline and lead to more financial inequality.
Earlier this year, JCT performed a “dynamic” analysis of a GOP tax plan from the Ways and Means Committee. JCT’s models produced eight different results, which varied by a factor of more than ten. In touting the plan, of course, GOP lawmakers picked the outcome that cast the tax plan in the most positive light.
Congressman Paul Ryan, author of the House Republican budget which proposed nearly $6 trillion in tax cuts for an average windfall of at least $200,000 for millionaires per year, is the incoming chair of the Ways and Means Committee. We expect that any tax plan he may release will follow the same model as his budget—massive tax cuts for the rich—and by using dynamic scoring to cherry-pick the best economic projection, he will try to sell another trickle-down economic plan to the American people.
We’ve come a long way since the Great Recession—the private sector has created 11 million jobs, we have had 57 straight months of job growth and we have worked to reduce the federal deficit by nearly two-thirds since 2009.
We should not let smoke-and-mirrors budget gimmicks threaten our continuing economic recovery and progress on shrinking our nation’s budget deficit.
Congressman Chris Van Hollen of Maryland is the top Democrat on the House Budget Committee, and Congresswoman Louise Slaughter of New York is the top Democrat on the House Rules Committee. Originally published in Politico Magazine.