“Dynamic Scoring Isn’t A Magical Tool”: Here’s How Conservatives Rig The Budget Game In Washington
When Republicans decided not to retain Doug Elmendorf as head of the Congressional Budget Office (CBO), Democrats became concerned that conservatives would try to rig the budget process. When the GOP required the CBO to use dynamic scoring for its legislative scores, Democrats became even more concerned. Those fears have proven overblown. The new CBO chair, whom Republicans announced last week, is Keith Hall, an economist at the Mercatus Center who was the commissioner of the Bureau of Labor Statistics under President Barack Obama. He’s a credible economist, not a partisan hack.
If you still want to see the budget gamed, though, look no further than the Tax Foundation’s score of Senators Marco Rubio and Mike Lee’s tax plan. The Foundation says that under a static scoring model, which doesn’t account for macroeconomic effects of the plan, the plan would cost the federal government $414 billion annually. That’s a huge amount of money. The government collects about $3 trillion a year in tax revenue, meaning the Rubio-Lee plan would be a 12.5 percent cut, a bold but unsurprising figure. Before Lee teamed up with Rubio, he released a first draft of his tax plan that reduced government revenue by an average of $240 billion a year. The new plan has even more tax cuts.
But when the Tax Foundation applies a dynamic scoring model to estimate the revenue effects of Rubio-Lee, the findings get downright wild. The Foundation projects that once the economy adjusts to the changes, it will grow enough to generate $508 billion (in 2015 dollars) in additional revenue each year. That would leave the American taxpayer with a cool $94 billion net annual gain.
To understand why this is so ridiculous, look at the Joint Committee on Taxation’s dynamic scoring estimates for the tax plan former Representative Dave Camp released last year. (The JCT produces revenue estimates for CBO.) The JCT used eight different dynamic scoring models and provided eight different estimates. “The increase in projected economic activity is projected to increase revenues relative to the conventional revenue estimate by $50 to $700 billion, depending on which modeling assumptions are used, over the 10-year budget period,” the report concluded. Now, $700 billion is nothing to sneer at, but that’s over a ten-year period. The Tax Foundation’s dynamic scoring model raised nearly that amount of additional revenue every single year.1
This is a slightly different comparison, because JCT’s numbers come from the 10-year period while the economy adjusted to the tax plan versus the Tax Foundation’s numbers, which are from after the economy full adjusted. The difference is still stark.
Once the Foundation releases the full report Monday, Rubio and Lee will surely cite the numbers ad nauseam to gin up favorable coverage and analyses of the proposal. The Tax Foundation is giving Rubio and Lee a major political boost by producing such a friendly score.
I’m sure the Foundation’s economists would disagree that they are doing the two senators a huge favor. They would say that the Rubio-Lee plan is far friendlier to economic growth than Camp’s plan was. Maybe they’re right. But it’s not that much friendlier. These numbers are far beyond any realistic estimate of Rubio-Lee’s macroeconomic effects. And it’s basically impossible to produce realistic estimates to start. “Theoretically dynamic scoring is the right thing to do,” Peter Orszag, who was director of CBO under President Barack Obama from 2007 to 2008, told me in January. “Just practically, it’s problematic. When you’re forced to pick one model, you’re pushing scientific knowledge beyond reality. You’re forcing the organization to pick one ‘true’ model when the economic science hasn’t produced a single model that works.”
Many conservative economists agree. Douglas Holtz-Eakin, a former CBO director, has frequently said that dynamic scoring isn’t a magical tool to make huge tax cuts look fiscally responsible. Greg Mankiw, who was the top economist for President George W. Bush from 2003 to 2005, recently wrote in the New York Times that while dynamic scoring is theoretically correct, “there are also good reasons to be wary of the endeavor.”
If Republicans had required that the CBO and the JCT use the Tax Foundation’s dynamic scoring model, it would have been a major problem. At least now the two parties accept the CBO’s score as legitimate. If they demand a bill to be deficit-neutral, the CBO is the final arbiter. That would all change if the Tax Foundation’s models were used. Of course, the actual likelihood of that happening was never clear. But if Republicans had required such changes, Democrats would never have trusted any score on any legislation—and rightfully so.
The two sides have enough trouble agreeing to pass anything today. It would be that much harder if they couldn’t even agree on the scores of legislation. You can understand why Democrats were so nervous as Republicans debated how to change the agencies.
1This is a slightly different comparison, because JCT’s numbers come from the 10-year period while the economy adjusted to the tax plan versus the Tax Foundation’s numbers, which are from after the economy full adjusted. The difference is still stark.
By: Danny Vinik, The New Republic, March 5, 2015
“The Bibi-Boehner Coalition”: Inviting The Leader Of Another Nation To Criticize Our Own President, And Netanyahu’s Decision To Accept
It was disconcerting to watch Congress cheer wildly as a foreign leader, the prime minister of one of America’s closest allies, trashed an American president’s foreign policy. It was equally strange that the Speaker of our House of Representatives interjected the United States Congress into an Israeli political campaign.
It fell to Isaac Herzog, Benjamin Netanyahu’s leading opponent in Israel’s March 17 election, to make the essential point: that Tuesday’s speech was “a very harsh wound to Israel-U.S. relations” and “will only widen the rift with Israel’s greatest ally and strategic partner.”
The rapturous greeting Congress bequeathed on Netanyahu for his attack on President Obama’s approach to negotiations with Iran no doubt created great footage for television ads back home and won him some votes at the right end of Israel’s electorate.
But Herzog’s observation stands: John Boehner’s unprecedented act of inviting the leader of another nation to criticize our own president, and Netanyahu’s decision to accept, threaten to damage the bipartisan and trans-ideological coalition that has always come together on behalf of Israel’s survival.
Netanyahu may have spoken the words, “We appreciate all that President Obama has done for Israel,” but the rest of his speech painted the president as foolish and on the verge of being duped on a nuclear deal by the mullahs in Tehran.
The Israeli leader reached for the most devastating metaphor available to him, the appeasement of the Nazis that led to the Holocaust. He urged the United States “not to sacrifice the future for the present” and “not to ignore aggression in the hopes of gaining an illusory peace.” This is what he was accusing Obama of doing. No wonder House Democratic Leader Nancy Pelosi described herself as “near tears” over Netanyahu’s “condescension toward our knowledge of the threat posed by Iran.”
Pelosi was on to something here because the differences between Obama and Netanyahu are not over whether the Iranian regime in its current form is trustworthy. Nobody believes it is. At stake is a balance of risks, a choice between two imperfect outcomes.
On one side is a deal that buys at least a decade in which Iran will not be able to produce a nuclear weapon and will be subjected to inspections and other limitations. On the other side is a decision to blow up the current negotiations because the guarantees of any likely accord would not be sufficiently airtight.
Yes, the emerging deal does carry the risk that down the road, Iran could get nuclear weapons. But failing to reach an agreement will not necessarily stop Tehran from going nuclear, and an end to negotiations would in no way ensure that the rest of the world would return to effective sanctions. Netanyahu’s rhetoric pointed toward his real goal, which is regime change, but how exactly could that happen without armed conflict?
Netanyahu evaded this by offering a thoroughly rosy scenario. “Now, if Iran threatens to walk away from the table — and this often happens in a Persian bazaar — call their bluff,” he said. “They’ll be back, because they need the deal a lot more than you do.” Really? If the Iranian regime is as horrible as Netanyahu says it is, why does he expect its leaders to be as flexible as if they were haggling over the price of a carpet?
The crux of the difference between Obama and Netanyahu is about a bet on the future. The Israeli prime minister argued that “the ideology of Iran’s revolutionary regime is deeply rooted in militant Islam, and that’s why this regime will always be an enemy of America.” He added, “I don’t believe that Iran’s radical regime will change for the better after this deal.”
Obama’s bet, by contrast, is that a deal opening up space and time provides the best chance we have of encouraging political evolution in Iran. Of course there is no guarantee of this, but it’s a reasonable assumption that ending the negotiations would set back the forces of change.
Skeptics of an agreement, Netanyahu included, can usefully push Obama to get the longest timeline and the toughest guarantees he can, and American negotiators can try to use the threat of opposition in Congress to strengthen the final terms.
But Netanyahu never gave a satisfactory answer to the most important question: What is the alternative? As for Netanyahu’s provocative and divisive intervention in American politics and Boehner’s meddling in Israel’s election, the voters of our friend and ally will render a judgment soon.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post; Featured Post, The National Memo, March 5, 2015
“Boehner’s Latest Humiliation”: Surrender; Government-By-Crisis Fails The GOP Again
Ever since Republicans first devised their ill-conceived plan to use funding for the Department of Homeland Security as a hostage in hopes of forcing President Obama to abandon his immigration policy, the gambit was doomed to eventual failure.
On Tuesday, the debacle reached its logical conclusion. Hours after Speaker John Boehner (R-OH) acknowledged defeat, the House of Representatives ended the game and passed a bill funding DHS through September, without preconditions. The bill passed the house 257 to 167, with just 75 Republicans joining the Democratic minority to keep the department open.
There was never any real doubt that this would be the outcome. Since the equally poorly-thought-out government shutdown of 2013, President Obama has made it clear that he will not give in to Republican attempts to use must-pass spending bills to blackmail him into dismantling his agenda. The Department of Homeland Security was always a poor target for a hostage, given its importance to national security — and the fact that shutting it down would do nothing to stop President Obama’s executive actions on immigration. And voters were always going to blame Republicans, not Democrats, for a crisis that the GOP created.
Still, House Republicans insisted on dragging the crisis out until the last second, and managed to undermine Speaker Boehner’s tenuous authority in the process. Yet again.
So will this latest humiliation convince Boehner and his caucus to rethink their strategy of government-by-crisis? It’s unlikely; if the “fiscal cliff,” the government shutdown, and repeated debt ceiling standoffs (among other House-made emergencies) didn’t change their course, there’s no reason to believe that the DHS near-shutdown will be different.
In related news, on Tuesday the Congressional Budget Office announced that the debt ceiling will have to be increased in October or November.
By: Henry Decker, The National Memo, March 3, 2015
“Congressional Dysfunction, The Serialized Tragicomedy”: Democrats Should Restrict Their Legislative Actions To Maximum Of Seven Days
The problem with modern-day politics, aside from everything, is that it lacks consistent excitement.
Sure, there are moments when debate over a major bill gets attention, but our interest fades once the bill passes and we drift back to more intriguing things, like reality television shows about dumb people.
Last week, however, lawmakers in the GOP-controlled Congress took a step that could turn American politics into must-see TV: They serialized democracy.
At issue was a bill to continue funding the Department of Homeland Security, the folks responsible for protecting our borders and keeping the country safe from terrorism. Most would agree it’s important to have that part of the government functioning, largely so it can do its “keeping the country safe from terrorism” thing.
After the requisite amount of harrumphing and whatnot, lawmakers could have just funded the department and moved on to other matters, allowing us to get bored and shift our attention to the myriad Kardashians we have to keep up with.
Instead, a wily group of Republicans decided the Homeland Security funding bill would be a great thing to use as leverage against President Barack Obama’s recent executive action on immigration, which is supposed to shield from deportation about 5 million immigrants who live in the U.S. illegally. The GOP lawmakers said they would only fund the Department of Homeland Security if the bill also rolled back Obama’s executive action, which they say is illegal and tyrannical and really hurt their feelings.
The problem is, Democrats won’t vote for a DHS funding bill that overrides the president’s immigration action, and even if they did, Obama would veto the whole thing. Also, the president’s attempt at immigration reform was recently suspended by a federal judge.
But legal limbo and the Sisyphean nature of legislatively doing away with Obama’s executive action would not deter these Republicans. They stuck to their guns, shot down short-term funding measures and — as the clock ticked to the deadline — finally agreed to give the Department of Homeland Security a week’s worth of additional money.
Several Republicans criticized their own party for being unable to reach agreement on a long-term bill that would keep the DHS running. And Democrats, naturally, had a field day.
Democratic Congressional Campaign Committee communications director Matt Thornton told Politico: “If this is a harbinger of things to come, the American public is in for a very long, painful and unproductive Congress.”
That’s one way to look at things. The other is that America is in for a long, gloriously dramatic and delightfully farcical new season of “Congress.”
With a one-week funding extension, Republicans gave us not just a dramatic cliffhanger — What happens when the homeland you love is no longer protected? — but the promise of another week of political intrigue.
Will Obama cave to the GOP’s pressure, take back his executive action and finally admit he’s a Kenyan-born radical transported through time to bring American society to its knees? Will House Speaker John Boehner rise from his office tanning bed, march to the congressional clubhouse where ultra-conservative lawmakers make forts out of stacks of money and shout, “SERIOUSLY, GUYS?!?”
This is not a failure to govern on the part of Republicans. It’s an ingenious way to methodically push the political narrative forward and keep Americans enthralled.
Perhaps the wildly popular public radio podcast Serial — which drew millions of online listeners by using an episodic format — gave lawmakers this idea. Wherever the concept came from, it’s gold.
Following the Republicans’ “short-term decisions equal long-term drama” lead, Democrats should now restrict their legislative actions to a maximum of seven days.
For example, rather than flatly vetoing the GOP’s Keystone XL pipeline bill, Obama should have issued a special one-week veto. That would have given us days of delicious bickering between legislators, oil companies and environmentalists. Why watch The Real Housewives of Beverly Hills when you could see The Real Final Supplemental Environmental Impact Statements for the Keystone XL Pipeline Project of the State Department?
Here’s the bottom line: Episodic politics would put plenty of butts on sofas and finally get Americans tuning in to what their government is doing or, in most cases, not doing.
What’s to lose? If the whole process is going to be ridiculous, it might as well be ridiculously good TV.
By: Rex Huppke, Columnist for the Chicago Tribune; The National Memo, March 3, 2015
“The Clinton Rules Are Back”: Big Holes In AP Report On Hillary’s ‘Homebrew’ Email System
Have you heard about that mysterious, vaguely sinister “homebrew” email server located in the Clinton family’s suburban New York home? That was yesterday’s big revelation by the Associated Press, repeated everywhere, evidently without further reporting or checking by outlets both here and abroad. The headline: “Clinton Ran Own Computer System for Her Official Emails.”
Now that’s a very hot story — but is it true? Several very large holes have now appeared in that tale – and the usually reliable AP seems to have quietly abandoned the most incriminating assertions in a rewritten version.
Today’s Daily Banter – an online publication I would recommend, by the way – carries a sharp post by Bob Cesca dismantling the AP story. As Cesca points out, the AP’s original lede indicated that Clinton was “physically running her own email” via a “computer server” located in “her family’s home” in Chappaqua, NY. But by the fourth graf, the AP story conceded: “It was not immediately clear exactly where Clinton ran that computer system.”
Moreover, Cesca reports, the AP seems to have misinterpreted the registration documents that formed the basis of its story – and the location of the Clinton email server is most likely to be found at Optimum Online, an Internet service provider owned by Cablevision in nearby Stamford, Connecticut. Not as sexy as that secretive basement setup in Chappaqua, but a lot more plausible. The Banter post names all the eager beavers, at outlets ranging from Gizmodo to Breitbart and the Washington Post, who broke out with indignant riffs on the AP’s “scoop.”
Cesca’s full post is well worth reading, and serves as fresh warning of what we ought to have learned from all the previous cycles of “Clinton scandal”: Withhold judgment until all the facts are available, and don’t immediately believe everything you read, even in news sources that normally appear trustworthy. The Clinton Rules are back — which in journalism means there are no rules at all.
By: Joe Conason, Editor in Chief, Editor’s Blog, The National Memo, March 5, 2015
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