House Republicans have destroyed the Congressional Budget Office's credibility
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[url]http://www.nytimes.com/2015/01/07/business/house-republicans-change-rules-on-calculating-economic-impact-of-bills.html[/url]
[quote]
WASHINGTON — After the drama of electing a new speaker of the House and the changing of control in the Senate, the House on Tuesday approved an obscure but significant rule change requiring the economic effects of legislation to be included in a bill’s official cost to the Treasury.
The [URL="http://budget.house.gov/macroeconomicscoring/the-need-for-macroeconomic-analysis.htm"]change on “dynamic scoring”[/URL] — ardently sought since the 1990s by Republicans — could ease passage of major tax cuts by showing that their impact on economic growth would substantially reduce their cost to the Treasury. The move is widely seen as a way for Republican leaders to set ground rules for an ambitious overhaul of the entire United States tax code.
“We’re saying, ‘If you think a piece of legislation is going to have a big effect on the economy, then include that effect in the official cost estimate,’ ” said Representative Tom Price, Republican of Georgia, the new chairman of the House Budget Committee. “So if you think a bill is going to help or hurt the economy, then tell us how much.”
Democrats blasted the change as “voodoo economics,” a “gamble” and “tax fraud.” Opponents said the rule change would invite politicized scorekeeping, further tilt policy to benefit the rich, and expand the budget deficit. Shaun Donovan, the White House budget director, implored the House not to “upend the level playing field that has existed for decades” and “call into question the accuracy, consistency and fairness” of congressional budget estimates. [/quote]
This piece has an excellent example of precisely why this is a massive problem:
[url]http://nymag.com/daily/intelligencer/2015/01/congresss-first-act-was-to-declare-war-on-math.html[/url]
[quote]
The old methods CBO used to measure legislation would account for changes in behavior that a new law might create. (Say, higher cigarette taxes would lead to less smoking.) They did not attempt to measure legislation’s impact on the economy as a whole. This is because the two parties disagree completely over what policies make the economy grow faster. Democrats, for instance, believe that tax rates on the rich have little effect on economic growth, but that investing in public infrastructure or education has a lot. Republicans believe the opposite. Congress voted yesterday to require the CBO’s measurement of the budgetary cost of legislation to incorporate assumptions about how it will affect economic growth. Specifically, the GOP's assumptions.
To understand the stakes of the disagreement, consider the following. In 2012, President Obama was threatening to block any extension of the Bush tax cuts for the highest earners, and he made this promise a key point of differentiation between himself and Mitt Romney. The Congressional Budget Office[URL="http://www.reuters.com/article/2012/11/08/us-usa-fiscal-cbo-idUSBRE8A71D020121108?feedType=RSS&feedName=politicsNews&utm_source=dlvr.it&utm_medium=twitter&dlvrit=574655"] predicted[/URL] that the expiration of these tax cuts would have only minor, short-term effects on the economy. Conservatives made far more dire assessments. A[URL="http://waysandmeans.house.gov/uploadedfiles/ey_study_long-run_macroeconomic_impact_of_increasing_tax_rates_on_high_income_taxpayers_in_2013__2012_07_16_final.pdf"] study[/URL] commissioned by pro-business organizations predicted that ending the Bush tax cuts for the rich would cost hundreds of thousands of jobs and reduce economic productivity. “This report shows the president's small business tax hike threatens hundreds of thousands of jobs, and will lead to even less economic growth, less investment and lower wages for American workers,”[URL="http://news.yahoo.com/blogs/the-ticket/study-says-obama-tax-proposals-could-cost-700-145037841.html"] warned[/URL] John Boehner. “These tax increases will have painful impacts on the economy and job creation,” insisted the[URL="http://www.heritage.org/research/reports/2012/06/delaying-obamacare-tax-increases-key-part-of-stopping-taxmageddon"] Heritage Foundation[/URL]. These predictions were the perfectly predictable expression of the conservative worldview, which deems tax rates on “job creators” to be the overriding factor in the success or failure of the economy.
Almost nothing that has happened in the two years since has made that conservative argument look good. In February 2013 — just after the Bush tax cuts on the highest earners expired — the[URL="http://www.cbo.gov/sites/default/files/43907-BudgetOutlook.pdf"] Congressional Budget Office[/URL] published a forecast for the budget and the economy over the next several years. The CBO forecast that the unemployment rate would fall to 7.6 percent by the end of 2014. If the conservative analysis was correct, and higher tax rates on job creators were depressing job growth, we might expect the unemployment rate today to be higher than the CBO forecast. Instead it is much lower. Unemployment fell below 6 percent by the third quarter of last year. Indeed, the economy appears to be accelerating into a phase of more rapid growth just at the time conservatives predicted that higher taxes would have the opposite effect. This development has not given Republicans even the slightest pause.
“Dynamic scoring” allows the Republican majority to impose its own ideological terms on the process of scoring legislation. Many credible economic forecasters would argue that debt-financed tax cuts actually reduce economic growth, and thereby cost the government more, not less, than their static cost. (For instance, a[URL="http://www.brookings.edu/%7E/media/research/files/papers/2014/09/09%20effects%20income%20tax%20changes%20economic%20growth%20gale%20samwick/09_effects_income_tax_changes_economic_growth_gale_samwick.pdf"] paper by the Brookings Institution[/URL] concludes that the Bush tax cuts slightly reduced economic growth, because the negative impact of higher debt outweighed the positive incentive impact of lower rates.)[/quote]
Basically, this means we can't cite CBO numbers anymore, because conservative economic ideology is now baked into the rules for how they calculate the cost of bills. Also, they immediately fired the well-respected current CBO director (who did a great job of continuing their apolitical tradition) so they can replace him with a Republican crony and further spin the numbers their way. So, yeah, the CBO's numbers are now no more credible than The Heritage Foundation. Right-wing economic OPINION will now be counted as fact when calculating the cost of legislation.
Arcane, but important. The next time you see "The $50 billion Senate bill..." in the news, you might not be able to trust that number. Especially in reference to tax cuts. The primary purpose of the change is to make tax cuts look less expensive and more beneficial than they actually are.
Adding that to the list of reasons why republicans are retarded
the storm has just begun
I swear, if Americans elect a Republican president in 2016, I'm moving as far away from America as I can get and still have interior plumbing.
Because shit like this will just continue to pile up unimpeded if they do.
Welp, were fucked, thanks republicans for destroying my respect for you.
[QUOTE=ZakkShock;46879593]Adding that to the list of reasons why republicans are retarded[/QUOTE]
This is actually remarkably brilliant, if you're trying to get expensive stuff passed without damaging your reputation of being against big government spending.
It's evil and manipulative, sure, but you have to give them props for figuring out how to write unbridled deception into the tax code.
[QUOTE=woolio1;46879682]This is actually remarkably brilliant, if you're trying to get expensive stuff passed without damaging your reputation of being against big government spending.
It's evil and manipulative, sure, but you have to give them props for figuring out how to write unbridled deception into the tax code.[/QUOTE]
I'm not giving them props for abusing a system that's already broken.
Man what a great start to 2015. Not even a week in and already shit's going to hell.
[QUOTE=woolio1;46879682]This is actually remarkably brilliant, if you're trying to get expensive stuff passed without damaging your reputation of being against big government spending.
It's evil and manipulative, sure, but you have to give them props for figuring out how to write unbridled deception into the tax code.[/QUOTE]
Sure, they've had 25 years to spell it correctly
Ah yes what a great time to be alive, 2015 will be terrible
This is of course assuming they had any credibility to begin with. I don't know anyone that trusts the US Government at their word even if they're only saying they'll have their senators eat at the in-house snack bar that day.
[QUOTE=TestECull;46879878]This is of course assuming they had any credibility to begin with. I don't know anyone that trusts the US Government at their word even if they're only saying they'll have their senators eat at the in-house snack bar that day.[/QUOTE]
The CBO (until now) is an extremely credible and professional organization, and was one of the few offices left in DC that both sides generally respected.
Except, I guess their reality-based analysis wasn't biased enough for the GOP.
[QUOTE=Used Car Salesman;46879907]
Except, I guess their reality-based analysis wasn't biased enough for the GOP.[/QUOTE]
Reality has a well known liberal bias.
[QUOTE=Raidyr;46880065]Reality has a well known liberal bias.[/QUOTE]
Reality sold its soul to the liberal agenda
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