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“A-Dynamic Scoring”: Republicans Don’t Like The CBO, Except For When They Do

Rep. Tom Price (R-Ga.) has no shortage of charts, bullet points and studies to back up the GOP’s tax strategy, all of which he laid out Tuesday afternoon before a room of reporters. But, perhaps most prominently, Price wielded numbers from the Congressional Budget Office to make the case for extending all the Bush tax cuts permanently, as the House is poised to vote on this week.

“As the Congressional Budget Office has said, the growth rate if these [tax hikes] go into effect is 0.5 percent,” Price told reporters. “If we’re able to keep the rates the same, the growth rate is 4.4 percent.”

It’s not surprising that a legislator would rely on numbers from the CBO, given the office’s long-standing reputation as a non-partisan, independent scorekeeper. But in the next breath, Price dismissed another major finding from the very same number crunchers.

When asked how the GOP would make up for the huge increase in the deficit that would result from making the Bush tax cuts permanent—which the CBO estimates will reduce revenues by $4.6 trillion—Price flatly denied that the numbers were valid. “We don’t believe that keeping tax rates as they are right now costs money,” he said. Instead, he explained, preserving all of the Bush tax cuts would spur tremendous economic growth that would quickly fill the deficit gap. “What happens when the economy grows, is the federal government actually gets more tax revenue.”

So how is it possible to tell which CBO numbers to trust? I asked Price, pointing out the discrepancy. “The CBO is constrained by rules, in some instances,” he explained. “Sometimes the rules allow them to have more accurate information, in others they don’t.” When it comes to analyzing tax revenue, the CBO must follow the guidance of the 1974 Budget Act, which Republicans like Price believe is flawed. Instead, they’ve long advocated for what’s known as “dynamic scoring” to account for the revenue impact of the economic growth they believe that tax cuts will accelerate.

Why, then, were the 1974 rules for scoring taxes imposed in the first place? Were people just misinformed? Price shrugged, pointing out that Republicans on the Budget committee have tried to change the rules 10 separate times.

In fact, the Bush administration tried using the GOP’s preferred dynamic scoring method to look at the very same Bush tax cuts in 2006. But the results disappointed conservatives: There wasn’t the strong correlation between growth and tax cuts they had expected, and there were far lower levels of growth attributed to the tax cuts than Republicans had claimed, particularly when they weren’t offset by other budget cuts. Even Doug Holtz-Eakin, then a GOP-appointed CBO director, didn’t clamor for more dynamic scoring thereafter.

But that hasn’t stopped Republicans from using the logic of dynamic scoring to make the case for tax cuts that aren’t offset by anything else, as they’re proposing once more. It’s a position that everyone from Tom Price to Mitt Romney has embraced, whatever CBO says to the contrary.

 

By: Suzy Khimm, The Washington Post, August 1, 2012

August 2, 2012 Posted by | Deficits | , , , , , , , , | Leave a comment

“An Ill-Conceived Strategy”: Romney Needed A Foreign Policy Vision Before Going Abroad

Travel abroad for a presidential candidate during the height of campaign season is designed to demonstrate foreign policy wherewithal and a chance to sharpen the candidate’s “presidential” voice.

This strategy strikes me as a mistake in general for prospective presidential candidates. Yet, this strategy is especially problematic absent a distinct foreign policy vision. Traveling abroad gets the candidate outside of the intense focus of the domestic media, allows the campaign to control the story for a few days, and allows for fundraising opportunities. But, these visits are no substitute for definitive foreign policy convictions and a concrete plan of action on the world stage. Instead of making isolated comments in particular countries without a unifying theme, presidential campaigns should describe to international leaders and the American (and world) public how they would handle a crisis, develop trade ties, punish violations of international norms or laws, the threshold for foreign conflicts, and under what conditions they would engage in diplomacy (or not). Foreign policy is, after all, one of the few direct avenues of presidential power where they are less likely to witness resistance from Congress or the public. It is also the issue where most of the president’s time is spent, whether they want it that way or not.

Even without the misinterpretations, missteps, gaffes committed by former Gov. Mitt Romney and the Romney campaign staff, the trip abroad was ill-conceived. The Romney campaign needs to focus their attention and hone a consistent foreign policy message before road testing it.

In contrast, in 2008 as a candidate, then Sen. Barack Obama visited Germany with an agenda: demonstrate that the United States would be, during an Obama administration, an active and cooperative partner in world affairs. Although isolated, the candidate had a goal that went beyond simply reaffirming relations. In a speech in Tiergarten Park, he promoted a new orientation of American international life, putatively as distinct from the Bush administration.

The old saw in politics is that there are no votes in foreign policy. But, given conflicts on two foreign soils, hundreds of thousands of troops stationed overseas, questions about moral uses of military technology, international threats from hostile neighbors, battles over copyright piracy, and the constant threat of terrorism, presidential candidates should make foreign policy an important component of their electoral strategy. Here, words need to speak louder than images.

 

By: Brandon Rottinghaus, Washington Whispers Debate Club, U. S. News and World Report, August 1, 2012

August 2, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“What Was Our Republican Leadership Thinking?”: Pretending To Care, The GOP Has A Decision To Make

Republicans Sens. John McCain, Kelly Ayotte, and Lindsey Graham kicked off the first in a series of public events yesterday, intended to highlight the apparent dangers of deep, automatic defense cuts due at the end of the year. The first event was in Ayotte’s home state of New Hampshire, where the lawmakers spoke at BAE Systems, which stands to lose thousands of jobs from reduced government spending.

At the event, McCain said:

“This was generated by Congress, and the president has a legitimate point when he says, ‘Well, Congress is the one that came up with this cockamamie idea, and so,’ as he said the other day, ‘let them wiggle out of it.’ Well, I understand that logic and there’s something to it.”

Yes, actually, there is. In fact, Graham told reporters yesterday, “What was our Republican leadership thinking when they agreed to the concept of sequestration?”

I’ve been wondering the same thing. McCain, Ayotte, and Graham are traveling from swing state to swing state, railing against the proposed defense cuts, which many Republicans blame on President Obama. But as the tour continues, is it too much to ask that the political world remember that these cuts were the GOP’s idea?

As we’ve discussed, as part of last year’s debt-ceiling deal, policymakers accepted over $1 trillion in cuts that would be implemented if the so-called supercommittee failed. Democrats weren’t completely willing to roll over — they wanted to create an incentive for Republicans to work in good faith.

Republicans agreed: if the committee failed, the GOP would accept defense cuts and Dems would accept non-defense domestic cuts. The committee, of course, flopped when GOP members refused to compromise, which put us on the clock for the automatic reductions that Republicans contributed to the very process they insisted upon.

So why blame Obama? He’s not the one who came up with the debt-ceiling crisis; he’s not the one who recommended the defense cuts; and he’s not the one who refused to compromise during the supercommittee talks.

Indeed, the larger question now is what Republicans prioritize more: defense spending or tax breaks.

Greg Sargent had a good item on this yesterday.

Republicans such as John McCain and Lindsey Graham have been touring swing states to highlight the looming sequester cuts to defense spending that are set to be triggered by the deficit supercommittee’s failure. They have said such cuts will be devastating to our national security, and have blamed Obama and Dems for the imminent threat.

At the same time, House Republicans will vote this week against the Democratic plan to extend tax cuts on all income over $250,000, because it doesn’t extend the cuts on all levels, including income higher than that.

So here’s the question: If the looming sequester cuts are such a threat to national security, why doesn’t that undermine Republican leverage in the discussions over what to do about the tax cuts?

Right. The looming, automatic cuts are inching closer to reality because Republicans refuse to consider some tax increases as a solution to the debt problem they sometimes pretend to care about. If GOP officials accepted new tax revenue, a deal could come together and these large defense cuts would simply be taken off the table.

But Republicans, at least for now, won’t budge — they want a larger agreement that would eliminate the need for deep Pentagon cuts and they want a deal that doesn’t require any increases on any one at any time.

McCain, among others, pushed the argument yesterday that it’s up to Obama to “lead” by bringing policymakers together and working out a solution. That sounds nice, but it’s foolish — the president has tried this repeatedly, but Republicans won’t compromise. Indeed, even now, McCain is urging Obama to work towards a compromise while McCain’s party simultaneously says it won’t compromise.

And so it’s the GOP that has a decision to make. While they decide, if they could stop blaming the White House for the Republicans’ own idea, it’d make the conversation a lot less ridiculous.

 

By: Steve Benen, The Maddow Blog, August 1, 2012

August 2, 2012 Posted by | Debt Ceiling | , , , , , , , , | Leave a comment

“Congratulations Republicans”: There Is Actual GOP Voter Fraud In Arizona

When Republican officials nationwide launched an aggressive voter-suppression campaign in advance of the 2012 elections, they did so under the dubious auspices of “voter fraud.” The tactics are necessary, the GOP said, not to rig elections, but to protect the integrity of the process.

The problem, of course, is that actual, real-world voter fraud is exceptionally rare, as even most proponents of voter-suppression efforts are willing to admit. But I’m curious: why is it that when legitimate examples come to light, they always seem to come from one party?

A Pinal County supervisor candidate has withdrawn from the race in the wake of voter-fraud allegations involving a former companion who, records show, has continued to vote by absentee ballot in the five years since her death.

John Enright, 66, had been seeking the Republican nomination for county supervisor of District 5, an area that includes Apache Junction and Gold Canyon.

Enright ended his candidacy last week, but his written statement failed to explain why he allegedly has been voting by absentee ballot for his former girlfriend.

It’s also worth noting that voter-ID laws — the preferred Republican method of cracking down on fraud — wouldn’t have prevented the kind of scheme Enright allegedly used in Arizona.

The news comes on the heels of Republican Charlie White, the former Indiana secretary of state, who was convicted earlier this year of several felonies, including voter fraud. (His crimes also wouldn’t have been prevented by voter-ID laws.)

So, congratulations Republicans, we now have some actual examples of genuine voter fraud. Whether the GOP tries to use these examples to justify voter-ID laws is up to them.

 

By: Steve Benen, The Maddow Blog, August 1, 2012

August 2, 2012 Posted by | Voter Fraud | , , , , , , , , | 1 Comment

“Implausible Assumptions”: Mitt Romney’s Tax Promises Are Mathematically Impossible

The sub-campaign to define Mitt Romney’s tenure at Bain Capital, as I never tire of pointing out, is merely about softening up the Republican nominee for the major fight of the campaign: Obama’s charge that his economic program is merely a retread of the Bush-era program of tax cuts for the rich. Over several months, Romney has laid the groundwork for his own defense. He has promised that his tax plan will not cut taxes for the rich (below the levels established under Bush). Recall that Romney’s old campaign line about how he wasn’t concerned about the very poor was also packaged with a supposedly parallel line about not being concerned about the very rich — neither group would receive any particular targeted benefit from his program.

Romney’s plan has been to hold together these promises by shrouding his tax and budget plans in a veil of secrecy. Romney has promised to reduce tax rates across the board by 20 percent, which would offer huge tax cuts for the rich. But he has promised to close unspecified deductions in the tax code so as to offset the cost, and leave the rich paying the same effective tax rate. Indeed, Romney has boasted about his strategy, noting that its lack of detail means it “can’t be scored,” and thus Obama can’t prove that his plan really would cut taxes for the rich.

But oh yes, he can.

The Brookings Institution and the Tax Policy Center today released a study of Romney’s proposals, insofar as they are known. The finding was simple. Romney’s promises, it found, are mathematically impossible. The amount of revenue available from tax deductions for the rich is smaller than the amount of revenue lost by cutting tax rates for the rich. Even if Romney sincerely scoured the tax code and wiped out every last tax break for the rich that he hasn’t promised to preserve (he has promised to keep in place tax incentives for saving, like the capital gains tax break), the rich will pay lower rates and a lower share of the tax burden.

It’s worth noting that the study embraces implausibly friendly assumptions as to how Romney would go about this. It assumes he would ruthlessly purge the tax code of breaks for the rich, even highly popular ones like the charitable deduction. It further assumes that, in order to wring every last penny out of the rich, Romney would cut off all deductions immediately for every dollar in income over $200,000 a year. (In reality, nobody would create a tax code that meant going from $200,000 a year to $200,001 would jack up your taxes by thousands of dollars — you would ramp up the tax deduction phase-in, which would reduce taxes for the rich even more. But the paper bends over backwards to grant Romney this implausible assumption.)

What’s more, the paper assumes that Romney’s plan would increase economic growth, meaning it wouldn’t have to find dollar-for-dollar replacements for all its lost income. To measure this cheerful scenario, the paper adopts a model created by Greg Mankiw — who is, of course, a Bush administration veteran and one of Romney’s main economic advisers.

Piling implausibly optimistic assumption upon implausibly optimistic assumption, the paper nonetheless concludes that Romney will cut taxes for the rich. That means it would result in some combination of higher taxes for the middle class or higher deficits. If you take Romney at his word that he would hold tax revenue steady at its current levels, then he would be implementing a significant shift in the tax burden from the rich to the middle class. 95% of all taxpayers would pay more taxes, in order to finance a tax cut for the most affluent.

And remember, this is assuming the most favorable possible case for Romney. Under more realistic assumptions — that he won’t close every single penny in tax deductions benefitting the rich, and that his plan won’t spur economic growth to the degree a Republican like Mankiw hopes it would — then the transfer from the non-rich to the rich would be even higher. All of which shows why, despite the constant drumbeat of conservative pleas for him to unveil more policy specifics, Romney is going to keep his proposals as vague as possible.

By: Jonathan Chait, Daily Intel, August 1, 2012

August 2, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

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