As Senate Republicans work on the floor to pass a compromise budget resolution, fiscal watchdogs are warning that permanently extending President Donald Trump’s tax cuts will have dire consequences.
The Senate’s amendment to the House’s $4.5 trillion budget resolution would theoretically subtract $3.8 trillion from the price tag by adopting a current policy baseline, which treats renewing the 2017 Tax Cuts and Jobs Act as a continuation of current law rather than new policy.
The unconventional tactic would also allow the TCJA to become permanent since it puts the costs of extension at zero.
Senate Finance Committee Chairman Mike Crapo, R-Idaho, said a current policy baseline “more accurately reflects reality” because “[maintaining] existing tax rates and preventing a $4 trillion tax hike is not the same as $4 trillion in deficit spending.”
Proponents also argue that lower tax rates drive higher growth and therefore higher revenue that is not accounted for in budget projections
But budget watchdogs are calling the move a “gimmick” that will blow up the national debt.
The Committee for a Responsible Federal Budget has estimated the real cost of the Senate’s budget resolution is $5.8 trillion in new borrowing over the next ten years, more than double the amount of new debt the partially offset House resolution would accrue.
CRFB also predicts that the borrowing levels allowed by the current policy baseline would spike the debt to Gross Domestic Product ratio to 134% by 2034 and 211% by 2055.
President of CRFB Maya MacGuineas called the Senate’s budget resolution “a farce” that “should be a non-starter.”
“This budget – and the potential use of current policy to hide $3.8 trillion of tax cuts – makes a mockery out of the reconciliation process,” MacGuineas stated. “It isn’t really a budget – it’s a blueprint for miring us in even more debt.”
The Congressional Budget Office, which has also expressed concern over the use of the current policy baseline, has estimated the Senate’s plan would add at least $37 trillion to the national debt over the next 30 years. The national debt is currently over $36 trillion.
Besides its economic ramifications, the concurrent resolution would also set a dangerous precedent of fiscal irresponsibility, MacGuineas warned.
“Senators should think carefully about whether they want to dismantle long-standing budget rules and norms just to avoid finding some offsets,” she said. “This could completely undermine the reconciliation process and other budget enforcement, and could have consequences for years and decades to come.”
Reproduced with permission. Original here: Senate’s budget policy change sparks debate | National | thecentersquare.com
Help American Liberty PAC in our mission to elect conservatives and save our nation. Support – American Liberty PAC