Republican
Speaker of the House John Boehner wields the gavel for the first time
after being re-elected as the Speaker of the House of Representatives at
the start of the 114th Congress on Jan. 6, 2015. Among the GOP's first
act was imposing a new rule on non-partisan agencies to institute new
prediction models that will be more favorable to trickle-down economic
policies. (Photo: Jim Bourg /Reuters) A seemingly arcane
rule change passed by the House of Representatives on Tuesday night
signals that a new wave of tax cuts for the wealthy and what has long
been criticized as "voodoo economics" will again be in vogue as the new
Republican-controlled Congress sets the agenda in the new session.
Along with a
host of other rules changes
that will govern procedural issues in the House over the next two
years, at issue here is a rule that will force both the Congressional
Budget Office (CBO) and the Congressional Joint Committe on Taxation
(JCT), the two nonpartisan groups tasked with scoring the economic
impacts of proposed legislation, to use projection models that include
what is called "dynamic scoring."
According to current lawmakers opposed to the change, the impact
could be devastating. That view is also shared by outside economists and
progressives who say that demanding the CBO to make expansive and
unsupported predictions about the possible macroeconomic implications of
new laws is akin to "cooking the books" and a proven failure when it
comes to obtaining accurate, unbiased analysis on behalf of the American
people.
Voicing objection ahead of the rule change on Tuesday, Rep. Chris Van Hollen (D-Maryland) and Rep. Louise Slaughter (D-NY)
wrote an op-ed in
Politico
in which they argued that recent decades have clearly shown that the
GOP's "trickle down" economic policies have failed. "But instead of
changing their approach to budgeting," the pair wrote, "Republicans want
to change the evidence." They continued:
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.
Though the Senate has yet to vote on new rules for its new session,
expectations are that it will impose matching rules on the CBO and the
tax committee. In a statement released just ahead of the rule change in
the House, Sen. Bernie Sanders (I-Vt.) called the move a dangerous
"gimmick" and vowed to fight the effort in the Senate.
"They call it ‘dynamic scoring.’ In fact, it’s a gimmick to help
justify more tax cuts for the wealthy and profitable corporations. It’s
what the first President Bush called voodoo economics—and he was right,"
Sanders said. "The purpose of dynamic scoring is to conceal—not
reveal—how Republican policies will affect the economy."
As former Secretary of Labor and professor of public policy at UC Berkeley Robert Reich
explained recently:
Dynamic scoring is the magical-mystery math Republicans
have been pushing since they came up with supply-side “trickle-down”
economics.
It’s based on the belief that cutting taxes unleashes
economic growth and thereby produces additional government revenue.
Supposedly the added revenue more than makes up for what’s lost when
Congress hands out the tax cuts.
Dynamic scoring would make it
easier to enact tax cuts for the wealthy and corporations, because the
tax cuts wouldn’t look as if they increased the budget deficit. [...]
Few economic theories have been as thoroughly tested in the real world as supply-side economics, and so notoriously failed.
In a
recent op-ed for the
New York Times
voicing his opposition to dynamic scoring, Edward D. Kleinbard, a law
professor at the University of Southern California and a former chief of
staff of the JCT, said the Republican Party's interest in the
controversial model "is not the result of a million-economist march on
Washington," but rather, "comes from political factions convinced that
tax cuts are the panacea for all economic ills." The GOP, he continued,
will "use dynamic scoring to justify a tax cut that, under conventional
score-keeping, loses revenue."
Sen. Sanders, however, says you don't need a new measuring stick to
show what happens when you cut taxes for the wealthy and powerful. "What
history shows," Sanders said, "is that when you give tax breaks to the
rich and large corporations, the rich get richer, corporate profits
climb and the federal deficit soars. In these difficult times, we need
realistic economic projections, not discredited theories, not voodoo
economics.”
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