What will Republicans prioritize when they regain their government trifecta next month? A tax overhaul? Energy production? Border security?
Nope. The GOP’s first order of business: getting rid of math.
Make sense of the latest news and debates with our daily newsletter
The fractious Republican Party can agree on few things these days. But one of them is near-unanimous frustration with the pesky laws of arithmetic. That cutting future taxes would reduce future tax revenue, for instance, perpetually aggrieves them.
A large chunk of the 2017 Trump tax cuts expires next year, and extending these provisions will be extremely expensive. (That’s why Republicans scheduled them to sunset in the first place: to lower the price tag.) The Congressional Budget Office, the legislature’s official scorekeeper, estimates a full extension would add more than $4 trillion to the federal debt over the next decade.
That’s true even after considering any potential growth effects on the U.S. economy. It might also understate the full cost of GOP tax plans, since it doesn’t include Trump’s other pricey promises: slashing corporate taxes; eliminating taxes on Social Security, overtime and tips. Those would add trillions more in red ink — awkward for a party that fancies itself fiscally responsible.
Follow Catherine Rampell
Republicans’ solution: invent a New Math, Cold-War-style.
Incoming Senate Finance Committee Chair Mike Crapo (R-Idaho) says that since tax rates are currently low, extending these expiring rates another decade shouldn’t count as costing anything because it wouldn’t “feel” like a change. Crapo’s tax-writing counterpart in the House, Rep. Jason T. Smith (R-Missouri), agrees.
This is like saying even though your car lease is up this month, leasing another car should count as free because you got used to having a car. Alas, that is not how budgets work.
Elsewhere Crapo has said that Republicans haven’t paid for similar tax cuts before, so they sure as heck shouldn’t start now. Indeed, he opposed an earlier, fiscally responsible bipartisan deal to expand the child tax credit and certain business breaks because it was paid for.
The CBO’s current budget-scoring methods don’t support Crapo’s fiscal fantasies. But not to worry: House Republican leadership has also been scrounging around for dirt on the CBO, in an apparent attempt to preemptively discredit their ref.
This is hardly the only recent case of GOP legerdemath.
On “Meet the Press” last Sunday, Trump complained that the United States is allegedly “subsidizing Canada to the tune over $100 billion a year,” and “subsidizing Mexico for almost $300 billion.” He appeared to be referring to the size of our bilateral trade deficits with these countries.
Some problems with that: First, paying companies abroad for the products they sell you is not a “subsidy,” in the same way that paying your local supermarket for its bananas is not a “subsidy.” It’s a transaction. Does Trump expect Mexico to just give us avocados, free?
Second is a subtler, more sinister issue: the specific numbers Trump used.
Trump’s figures do not match the official statistics put out by the U.S. Census Bureau or the Office of the U.S. Trade Representative — they are much larger. This is probably because Trump and his MAGA allies have joined forces with some protectionist progressives in trying to change how trade figures are calculated to exaggerate the size of trade deficits. (The short explanation is: They want to stop counting goods that are first imported and then reexported as exports, without making a symmetric change for imports.) This change may sound small and technical but it would massively distort how we measure and understand economic changes — and is symptomatic of Trump’s habit of torturing the data until it confesses.
Nope. The GOP’s first order of business: getting rid of math.
Make sense of the latest news and debates with our daily newsletter
The fractious Republican Party can agree on few things these days. But one of them is near-unanimous frustration with the pesky laws of arithmetic. That cutting future taxes would reduce future tax revenue, for instance, perpetually aggrieves them.
A large chunk of the 2017 Trump tax cuts expires next year, and extending these provisions will be extremely expensive. (That’s why Republicans scheduled them to sunset in the first place: to lower the price tag.) The Congressional Budget Office, the legislature’s official scorekeeper, estimates a full extension would add more than $4 trillion to the federal debt over the next decade.
That’s true even after considering any potential growth effects on the U.S. economy. It might also understate the full cost of GOP tax plans, since it doesn’t include Trump’s other pricey promises: slashing corporate taxes; eliminating taxes on Social Security, overtime and tips. Those would add trillions more in red ink — awkward for a party that fancies itself fiscally responsible.
Follow Catherine Rampell
Republicans’ solution: invent a New Math, Cold-War-style.
Incoming Senate Finance Committee Chair Mike Crapo (R-Idaho) says that since tax rates are currently low, extending these expiring rates another decade shouldn’t count as costing anything because it wouldn’t “feel” like a change. Crapo’s tax-writing counterpart in the House, Rep. Jason T. Smith (R-Missouri), agrees.
This is like saying even though your car lease is up this month, leasing another car should count as free because you got used to having a car. Alas, that is not how budgets work.
Elsewhere Crapo has said that Republicans haven’t paid for similar tax cuts before, so they sure as heck shouldn’t start now. Indeed, he opposed an earlier, fiscally responsible bipartisan deal to expand the child tax credit and certain business breaks because it was paid for.
The CBO’s current budget-scoring methods don’t support Crapo’s fiscal fantasies. But not to worry: House Republican leadership has also been scrounging around for dirt on the CBO, in an apparent attempt to preemptively discredit their ref.
This is hardly the only recent case of GOP legerdemath.
On “Meet the Press” last Sunday, Trump complained that the United States is allegedly “subsidizing Canada to the tune over $100 billion a year,” and “subsidizing Mexico for almost $300 billion.” He appeared to be referring to the size of our bilateral trade deficits with these countries.
Some problems with that: First, paying companies abroad for the products they sell you is not a “subsidy,” in the same way that paying your local supermarket for its bananas is not a “subsidy.” It’s a transaction. Does Trump expect Mexico to just give us avocados, free?
Second is a subtler, more sinister issue: the specific numbers Trump used.
Trump’s figures do not match the official statistics put out by the U.S. Census Bureau or the Office of the U.S. Trade Representative — they are much larger. This is probably because Trump and his MAGA allies have joined forces with some protectionist progressives in trying to change how trade figures are calculated to exaggerate the size of trade deficits. (The short explanation is: They want to stop counting goods that are first imported and then reexported as exports, without making a symmetric change for imports.) This change may sound small and technical but it would massively distort how we measure and understand economic changes — and is symptomatic of Trump’s habit of torturing the data until it confesses.
