If I understand Jonathan Chait correctly, the Trump administration is acknowledging that their budget would result in two trillion fewer dollars being collected in revenues over the next decade. But they are insisting that two awesome things will happen. The first is that this actually won’t happen because greater economic growth will produce the revenue after all. And the second is that this greater economic growth will also allow them to balance the budget.
For Chait, this is a simple error of arithmetic. It’s an example of double counting. First they assume two trillion in extra revenue based on higher economic growth (to make up for lower tax rates/fees), and then they assume an extra two trillion a second time (to bring the budget into balance).
We’re all familiar with the claim that huge tax cuts will pay for themselves. Reagan claimed that, but it didn’t happen. George W. Bush claimed that, and it didn’t happen. Chait doesn’t think it will happen this time either.
It seems difficult to imagine how this administration could figure out how to design and pass a tax cut that could pay for itself when Ronald Reagan and George W. Bush failed to come anywhere close to doing so. If there is a group of economic minds with the special genius to accomplish this historically unprecedented feat, it is probably not the fiscal minds who just made a $2 trillion basic arithmetic error.
It’s possible that this is exactly what Chait describes, but it’s also possible that it’s a lie made necessary by the fact that the Republican Party just spent the last decade obsessing about the deficit and now has a large caucus of genuine deficit hawks, plus an army of supporters whose tolerance for pivot-on-a-dime hypocrisy isn’t as high as the tax-cutters might wish.
After all, once you’re committed to the lie that your tax cuts will unleash absurd levels of economic growth that no economist will predict, what’s one more lie about math?
More than 35 American economists surveyed last week [by the University of Chicago Booth School of Business] disagree with a basic element of President Trump’s proposed tax plan: whether it will pay for itself. In an unusual display of unity, 100 percent of participating economists rejected the idea this week that Trump’s plans to drastically lower taxes on corporations, business, and individuals will create enough economic growth to offset the lost federal revenue and avoid adding to the national debt.
I’m just trying to imagine the Trump administration making a half-truthful claim that their budget won’t do a damn thing about the budget deficit and that it is only designed to be budget neutral. If Congress were to pass a balanced budget amendment, the Trump budget would violate the law, but they don’t want to admit that. So, it’s not enough to falsely claim that their budget won’t make the deficit problem worse; they have to make the further claim that their budget will actually balance. With this much incentive to lie, I am not ready to credit them with an honest error of addition.
But, as has become the pattern, I don’t think the lies will be effective:
Sen. Lindsey Graham (R-S.C.) said Tuesday that President Trump’s first budget was “dead on arrival” and wouldn’t make it through Congress.
“It’s not going to happen,” said Graham, according to NBC News. “It would be a disaster.”
In itself, a rejection of Trump’s submitted budget wouldn’t be very big news. The Senate rejected Obama’s 2012 budget in a 99-0 vote and did the same to his 2015 budget by a 98-1 tally. The Republicans forced those votes to demonstrate that even Democrats weren’t on board with the president’s priorities. This time around, the Republicans are not prepared to make cuts to Medicaid, the State Department, and foreign aid that are as steep as what Trump proposes.
But, if it were ever to get down to it, they’d also object to its effect on the deficit.
Considering just how dead on arrival this budget is, it’s a wonder that the administration feels the need to make such risible claims about it. But, then, they hardly hoard their credibility, do they?