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America can’t afford Trump’s tax cuts. So the GOP is playing pretend.

Richard E. Neal, a Democrat, represents Massachusetts’s 1st Congressional District in the U.S. House of Representatives and is ranking member of the Ways and Means Committee. He chaired the committee from 2019 to 2023.


There’s a little-noticed debate playing out in the halls of Congress — over how to measure the cost of tax policy. That might sound arcane and wonky, but its potential impact on our nation’s fiscal health cannot be overstated.
 

Republicans are looking to extend and expand upon the tax provisions enacted during the first Trump administration. Because of budgetary constraints, Republicans were required at the time to sunset many of the individual tax provisions at the end of this year. The government revenue that would be lost just by extending the original 2017 tax law, never mind any additions that President Donald Trump has promised — such as exempting tips, overtime pay and Social Security payments from tax — is astounding: in excess of $4 trillion over 10 years, according to estimates from the Congressional Budget Office.

Faced with sticker shock at this price tag, Republicans are contemplating requiring Congress’s official scorekeepers — the CBO and the Joint Committee on Taxation — to use what is known as a “current policy baseline” to measure the cost of extending their tax law. This means measuring the bill’s cost against a hypothetical world in which its deficit-increasing provisions have already been extended.

In simpler terms, it means pretending that extending the Trump tax law costs nothing.

To justify this, my colleagues on the other side of the aisle are using a simple logic: This tax law has been in place for eight years. To extend its provisions is not a “tax cut” for taxpayers who have been used to paying their taxes at this level for eight years. Therefore, we should not portray the new legislation as a new cut.

 

While this logic is tempting, it’s like telling the American people, if you paid for a family vacation for the last three years, there’s no need to budget for future vacations; they’re all free now! (There’s no shortage of other examples offered by budget experts.) Importantly, it also misunderstands the vital role that the CBO and the JCT play in the legislative process. Their role is not to tell members of Congress whether taxpayers experience a tax cut (though they certainly have the tools to do that). Rather, their role is to provide members with crucial information regarding the impact that legislation will have on our national debt.

To use the current policy baseline would obscure this information from the public. The official scorekeepers would be telling the nation that extending the Trump tax law would have zero impact on our national debt, and that’s plainly false. Many conservatives have attempted to justify this maneuver as creating parity between taxing and spending, but that mischaracterizes modern budget rules, as the former budget adviser to House Speaker Paul Ryan (R-Wisconsin) laid out.

It’s easy to see why using the current policy baseline is tempting to Republicans. Meeting Trump’s demands on tax policy will be costly. For those members who have spent a career touting fiscal responsibility, passing a tax bill that increases our national debt by $4 trillion, $5 trillion, or even as much as $10 trillion is not something they would relish taking back to voters. Holding a piece of paper with a zero on the bottom line could provide a modicum of cover.

Put another way: If political pressure is a significant force in restraining Congress’s instinct to increase deficits, removing that political pressure through budget trickery is a surefire way to ensure that future deficits will only be worse.

It is perhaps the prospect of this future budgetary gamesmanship, or simply a fidelity to honesty in accounting, that has led some of my Republican counterparts, such as Reps. David Schweikert (Arizona), Greg Murphy (North Carolina) and Chip Roy (Texas) to speak out against using current policy baselines. I hope their colleagues begin to listen.

 

Even if Republicans force the congressional scorekeepers to write a “zero” on a piece of paper, it doesn’t change the fact that trillions of dollars that would otherwise be paid into the U.S. Treasury will no longer be paid. It doesn’t change the fact that the United States will have to borrow more to meet our obligations. It won’t change the outlook for the bond markets, for interest rates or for our credit rating agencies. It will just be a number on a piece of paper that signifies nothing.

I’ve served on the Ways and Means Committee for 33 years. As Republicans prepare their tax bill, my Democratic colleagues and I welcome a robust and thoughtful debate. In a time of increasing partisanship, it is my hope that we can still argue about the scope and extent of all manner of tax policy in good faith and with good purpose.

But when it comes to measuring the cost of our proposals, let’s not cook the books.

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