Congressional Budget Office, RIP

Sometimes you don't agree with something. That's fine. You state your grievances and maybe change it. Unless you're the House Republicans and Paul Ryan. Then you lie about your issues, and butcher the system we live under. That's where we're at today.

From Off the Charts Blog:

CBO and JCT already provide macroeconomic analyses of some proposed bills as a supplement to the official cost estimates they produce.  These analyses typically present a range of estimates of the legislation’s impact on the economy.

The new House rule, in contrast, asks for an official cost estimate that only reflects a single estimate of the bill’s supposed impact on the economy and the resulting revenue impact.  By incorporating additional revenue in the official cost estimate (as a result of an estimate of economic growth), this would enable lawmakers to write bills with deeper tax-rate cuts, or smaller offsetting curbs on tax breaks, than they otherwise could do.

The economic impact of even a well-designed tax reform plan is likely to be modest relative to the size of the U.S. economy.  But the estimates of revenue gains from the plan’s estimated dynamic effects could be large in the context of current fiscal debates.  Those estimates could also be highly dubious, depending on the models and assumptions used.

For example, JCT estimated that the tax reform plan that former Ways and Means Chairman Dave Camp produced last year could generate between $50 billion and $700 billion of additional revenue over the decade through faster economic growth (see chart), with the $700 billion estimate reflecting a series of very rosy assumptions — including the assumption that a future Congress will stabilize the debt as a share of gross domestic product (GDP) by approving large spending cuts that aren’t part of the Camp bill.  If highly optimistic economic and fiscal assumptions like these are included in official cost estimates but then fail to materialize, the result will be higher deficits and debt.  And as CBO, JCT, and other analysts have warned, tax cuts that ultimately expand deficits can slow economic growth, rather than increase it, because the higher deficits can create a drag on saving and investment.

To put this into simple terms, the House is ordering the Congressional Budget Office to assume that cutting taxes will always spur growth. Like it didn't for much of the 1980s, and it didn't under Dubbya. They will simply say it does, and we'll all have to accept it as gospel. We'll assume that rich people and corporations will take the tax cuts that Paul Ryan wants to give them, and re-invest them in hiring Americans, even though that makes absolutely zero economic sense for the rich people or corporations, and even though they haven't behaved that way before. We'll abandon a non-partisan model of budget projections and research, one that has angered Democrats and Republicans alike in the past, in favor of a completely politicized, voodoo economic model.

CBO, RIP.