Republicans love smoke-and-mirrors budgeting. They're laying off thousands of workers chaotically even though salary costs are a tiny fraction of the federal budget. Elon Musk is pretending to save far more money than he really is. Now Senate Republicans are trying to hide the cost of extending the 2017 tax cuts using a new wheeze called the "current policy baseline."
This one is a pistol, but it's a little trickier than the others. Take a look at the chart below:
The cost of the 2017 tax bill has so far averaged a little over $200 billion per year (blue bars). So let's just take that as the new zero! If we do, the apparent cost of extending the tax cut goes down from $3.6 trillion to $1.8 trillion. That certainly makes things easier on everyone.
It's not real, of course. Suppose you're paying off $500 per month on your car. After five years it's done and you decide to buy a new car with the same payments. If you assume that $500 is your "baseline" then the new car costs nothing. It's an exciting thought.
But it ain't true. Call it anything you like, but that car is costing you $500 per month in actual money. If you don't account for that in your household budget you're going to be screwed pretty quickly.
It's the same for extending the 2017 tax bill. Whether you like it or not, it's going to cost about $3.6 trillion and it's going to swell the national debt by $3.6 trillion.
But Republicans don't want it to increase the national debt by $3.6 trillion. They're against debt, you see. But they're also deeply in favor of tax cuts for the rich. What to do?
Pretend and extend, my friends. Can they get away with it under Senate rules? Probably not, but it's worth a try. Stay tuned.
One of my dad's favorite sayings was "figures don't lie, but liars figure".
Trump has taught the Republicans one thing. Just lie! Regardless of litteraly anything else. It has always worked for Trump, why not the GOP?
Pretend and extend!
Not a problem--change the rules, or at least the parliamentarian.
What? They're still paying a salary to a parliamentarian?
touche
Yeah, I never understood why with all the other flouting going on, nobody talks about who the parliamentarian is or whether they (Trump or Johnson) could replace that individual if one party doesn't like their decisions.
Senate rules are what 51 senators say the senate rules are. They can get away with it.
51 senators may get away with it, but Mitch McConnell could do that all by himself, as well as defy & change his own rules, in the good old days.
It's okay, because as we all know, tax cuts pay for themselves!!
More to the point, after Republicans claimed that the 2017 tax cuts would pay for themselves, the official budget projections now show negative (dollar) impacts as far as the eye can see, and the **assumption** now is that the budget cuts will **never** have a positive impact on the deficit.
But I suppose there isn't any likelihood that anyone will admit that they were wrong.
That and "Reagan showed that deficits don't matter" will be engraved on the nation's tompstone.
correction, deficits don't matter for the Republicans...but if a Democrat is in the White House, then they are the only thing that matters.
This is great, because now you can make any bill you like budget neutral in two easy steps!
Say you have a bill you want to pass but it would cost $100B/year, or $1T over the 10 years budget window:
1- Add a tax increase of $200B/year that will go into effect 5 years from now. That makes the bill budget neutral.
2- The following year, pass a bill with "current policy" as baseline removing the tax increase. Since current policy doesn't have the tax increase, this is also budget neutral!
We should refrain from giving them ideas.
So I'll just go to the bank and explain to them that according to Republican math, that car loan I need to replace my old car won't actually cost anything! No need to run a credit check or anything!
It's important for Dems to be clear on this, and I like Kevin's pithy summary. "Pretend and extend."
Republicans want to pretend that the expiring bill isn't expiring, and is thus the current baseline. That's phony. This baseline is what happens if the new bill under consideration never happens. In this case, that means the previous Trump tax cuts expire and tax rates revert to what they were before that.
Insisting that the expiring tax cuts are the actual "baseline" is, in fact, pretending.
So, application to IRA, CHIPS, and other Biden-era legislation? I think it would be hard to avoid applying it completely, but they might decide that "current baseline" is averaged over a 10-year period to dilute the Biden-era cost calculation.
That's not nearly ambitious enough: They can pass a bill "expiring" those bills and use them to pay for tax cuts!
As long as they're at it, why not expire them all three or five times each? If they can write a bill to expire a tax cut that already has an expiration date, they could do this to infinity.