TPMDC
Expert: The GOP Shadow Budget Might Not Even Eliminate Deficits
Rep. Paul Ryan (R-WI)
Share
Send to a friend!
House GOP's top budget guy Paul Ryan (R-WI) claims that his tax-cutting, Medicare and Social Security slashing fiscal roadmap would restore the federal budget to balance over a number of decades...and the non-partisan Congressional Budget Office has his back. But on close inspection, it turns out that CBO took much of its analytical lead from Ryan himself, dramatically skewing the numbers.
For their analysis Ryan provided CBO with a remarkable assumption: he asked CBO actuaries to assume that the major tax cuts he calls for won't create any change in federal revenue over the next two decades--at all.
Here's how they put it, in budget-ese: "As specified by your staff, for this analysis total federal tax revenues are assumed to equal those under [current fiscal policy]," the analysis reads.
There are just a couple major problems with that. According to Jim Horney, a tax expert at the Center on Budget and Policy Priorities, it doesn't account for the tremendous loss in revenues the government would experience if, as Ryan's plan calls for, the Bush tax cuts were extended and the Alternative Minimum Tax and estate tax were repealed.
"I haven't seen them explain why they think the tax proposals he includes in the Roadmap would result in [the revenues they project] when it looks like it would be considerably less than that," Horney told me today.
In 2008, the Tax Policy Center analyzed a similar GOP plan and determined it amounted to the biggest tax cut in history.
Whether Ryan was knowingly engaging in sleight-of-hand, or whether he was using an inaccurate supply side model to correlate tax cuts with increased revenue is unclear. But what is clear is that if CBO had based its analysis on an official accounting of the ways in which his proposed policy changes would impact revenue, they would have come to a different conclusion.
Horney says, "If you have revenue lower than assumed you would have a much much bigger buildup of deficits over the next couple of decades than they're assuming, and what you don't know is if the savings you get from cutting entitlements would bring you to balance later than expected," or if they'd get you there at all.
So it's a bit of bamboozlement. For his part, Horney doesn't place the onus for this entirely on Ryan. He says that CBO ought not be granting the Ryan plan its considerable imprimatur if it's not based on a complete analysis of the proposal.
"People see the CBO letter and most people assume that CBO had estimated the effect of these policy changes," Horney told me. "It's not a good idea for CBO to put out a letter that gives an overall estimate of the effects of a plan when...CBO has not estimated those policies."
Comments (43) | Join the Conversation!
Leave a comment
Follow us!
Most Popular
TPM Stories Now Surging on Digg.com
TPM Top News
© 2010 TPM Media LLC. All Rights Reserved.
lousgirl84
February 10, 2010 2:20 PM
There's that picture of Joseph Mengele's great great grandson.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
mans_best_friend
February 10, 2010 4:56 PM in reply to lousgirl84
Wow. I never noticed before, but you're right.
http://www.whale.to/b/0,,1587218_4,00.jpg
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
toshiaki
February 10, 2010 2:52 PM
So why doesn't a Dem ask the CBO to rescore it in a realitic fashion? We know the plan is full of holes.
John
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
ray reynolds
February 10, 2010 8:00 PM in reply to toshiaki
Full of shit you mean.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
toddincabo
February 10, 2010 8:46 PM in reply to ray reynolds
lying...rethug....shit
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
rbe1
February 11, 2010 3:58 AM in reply to toshiaki
Doesn't it strike you as strange that the people in the CBO are so dumb that they didn't think of this, and label their result with the obvious caveats ?
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Icon
February 22, 2010 4:10 PM in reply to rbe1
How dumb the CBO people are is irrelevant. They serve members of Congress data. If a member of Congress requests a forecast based on wholly unrealistic assumptions the idiot is the member of Congress, not the CBO.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
rlkinny
February 11, 2010 11:07 AM in reply to toshiaki
In economics, there's a theory called the Laffer Curve (no pun intended)-- http://en.wikipedia.org/wiki/Laffer_curve. It seems to be what the Republicans base their tax theories on. It "predicts" the effects on tax revenues as tax levels increase. Rather than being a straight line, it's a curve. So, that at 0% taxes and 100% taxes, the revenue is 0, and there's a magical mid-point that represents the percentage tax level that gives you the maximum tax revenue. If you're beyond the magical mid-point, increasing tax would actually REDUCE tax revenues (due to things like reduced corporate profits), but decreasing taxes would INCREASE tax revenue (due to things like increased taxable corporate profits). The Republicans believe in the Laffer curve (no pun, seriously). And, they believe that we're already beyond the magical mid-point -- which is probably the underlying assumption in how they asked the CBO to score this. Note: Paul Krugman and other economists have debunked the assumption that we're beyond the magical mid-point of the Laffer curve.
Having said all of this, I believe that:
1. The CBO should also score the Republican budget based on whatever is their standard set of assumptions of the relationship between tax level and revenue -- not just the Laffer curve assumptions made by the Republicans.
2. This whole line of thinking has me convinced that the era of across the board tax cuts or increases has got to go. I much prefer the approach of the Obama administration which is to use targeted tax increases/decreases to motivate the economy and generate tax revenue -- e.g. tax cuts/credits for the middle class and small businesses to motivate the economy, and tax increases for the rich to generate tax revenues where more disposable income for the rich won't really motivate the economy (just how many BMW's does one need?)
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Max Thrax
February 10, 2010 3:03 PM
I thought we were going to get a vote this week to get Republicans on record as to whether they support Ryan's social security proposals? Oh, I get it, once Dems SAY they're gonna do something, that means that that's the ONE THING THEY"RE NOT GONNA DO. Gotcha.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Viva!America!
February 10, 2010 3:26 PM in reply to Max Thrax
I thought DC was shut down.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Max Thrax
February 10, 2010 3:32 PM in reply to Viva!America!
Nope. Not Congress.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Redwood Rhiadra
February 10, 2010 4:45 PM in reply to Max Thrax
Um. Yes, Congress. They've been shut down all week.
"Despite all the issues that they are working on, Congress has been shut down by weather, instead of red tape, filibusters and obstruction. They were already scheduled to take off for President's Day week, but now there likely won't be any voting until February 22, according to Reuters."
http://www.associatedcontent.com/article/2687447/washington_snow_storm_further_shuts.html?cat=16
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
ohyeathatsright
February 10, 2010 3:05 PM
I don't get how a supposedly non-partisan CBO can release crap like this. Their obligation is to the American people; to evaluate based on the merits of what's presented and the current policy situation, not based on the artificial scenarios requested by the lawmakers. Shameful.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
toddincabo
February 10, 2010 8:49 PM in reply to ohyeathatsright
Yeah, I'd like to know what's up with that also.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
mans_best_friend
February 10, 2010 3:35 PM
Don't you all understand? Haven't you heard of the magic of supply-side economics (i.e. voodoo economics as GHWB called it during the 1980 Republican primary campaign)? Tax cuts INCREASE revenue. If they cut taxes to zero they'd be swimming in money.
Don't you all remember how tax revenues skyrocketed and deficits shrunk to zero after the Reagan and Bush tax cuts? Wait...nevermind.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
chimpale
February 10, 2010 4:14 PM in reply to mans_best_friend
I guess it's sort of like when Republicans cut off the oxygen supply to their brains, their brains get filled with ideas and they suddenly have these ingenius plans for fixing everything.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
mans_best_friend
February 10, 2010 4:53 PM in reply to chimpale
Except it's always THE SAME plan.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
toddincabo
February 10, 2010 8:51 PM in reply to chimpale
brains ?
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
etfmaven
February 10, 2010 4:58 PM
David Brooks is on NYT today saying the CBO scored Ryan's plan and it brings the deficit way down. So the BS is underway.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
lousgirl84
February 10, 2010 7:06 PM in reply to etfmaven
One would hope Brooks would be better than that but I guess not.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Marinus van der Lubbe
February 11, 2010 7:06 AM in reply to lousgirl84
Brooks is a shill and an ass. He has no journalistic integrity anymore.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
lousgirl84
February 11, 2010 11:03 AM in reply to Marinus van der Lubbe
Good morning Marinus. Enough snow for you? Proves global warming is a myth. Right? The idiots are having a field day with this.
What amazes me is that these people deny science when science has made most of our lives better and we applaud it for that but when it comes to believing 90% of the scientists that global warming or climate change is real, they reject it.
Its beyond comprehension.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Marinus van der Lubbe
February 11, 2010 11:34 AM in reply to lousgirl84
How in hell can you even start to have a conversation with people who share Jim Inhofe's dishonest intellect and ignorance?
Actually, snow stopped here, sun came out and melted it, but 50 mph winds make it a tad chilly. This SE corner of Virginia enjoys a better weather forecast than DC. xx
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
twirling fartknocker
February 10, 2010 6:36 PM
snake oil salesman
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Chris Weagel
February 10, 2010 6:42 PM
What a worthless little asshole this Ryan. He's an errand boy for the feudal lords that run this country, no doubt, but I bet he's never gone wanting for anything a day in his life and, after becoming the face of this madness, never will. They will pad his ass forever.
Also, I have no doubt that democrats in some form will "come around" to the wisdom of this plan. The overall goal is to reduce America to a feudal state. I invite Ryan and other free market heroes to visit Michigan and meet people who have worked all their lives and have nothing but Social Security and Medicare to count on as their great reward. That any of this is being discussed in this country is revolting.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
cwnidog
February 10, 2010 7:08 PM
What is Ryan talking about with this "it's not really a budget" stuff? It sounds like the standard Republican budget to me.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Joe
February 10, 2010 7:08 PM
We don;t have to worry about deficits! Sarah Palin says all we have to do is pray for divine intervention and then JC will just sprinkle a bunch of magic dust on DC and the big bad deficit will dissolve!
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
lousgirl84
February 10, 2010 7:32 PM in reply to Joe
Yeah, just call the creator and tell him to fix everything.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
rbe1
February 11, 2010 4:41 AM in reply to lousgirl84
Creationism at its best.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Backseatdriving
February 10, 2010 7:09 PM
Sure sounds like dynamic scoring, except that it's super-ultra-magic dynamic scoring. I thought CBO didn't even do dynamic scoring. What gives?
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
regular_joe
February 10, 2010 7:38 PM
Now if we can only get Ryan to assume that our cars don't burn any gas, the GOP can take credit for eliminating America's dependency on imported energy AND drastically reducing the creation of green house gases...
There is only a slight problem: like most of the GOP's "solutions" to America's problems, this one doesn't solve ANY problems. It's just another gimmick.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
MrSmith1
February 10, 2010 7:40 PM
For the love of God, why doesn't some Democrat loudly call him out on this? Please?! Come on, just one shout of "You LIE!" would do.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
slb
February 10, 2010 10:14 PM in reply to MrSmith1
I shout that to my television set quite often!
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
chthonic
February 10, 2010 8:33 PM
Well, you know it's not surprising. Right?
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Thelonious Funk
February 10, 2010 9:03 PM
Say what you want about a budget that leaves behind those most in need so that the rich may be wealthier, those blue eyes of Congressman Ryan stare into the soul of my heart like daggers
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
bibimimi
February 10, 2010 11:54 PM
http://www.getridofthings.com/
Sadly, there is no entry in this site for ridding us of lying opportunist Republicans.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
chitowner
February 11, 2010 2:47 AM
Sounds like the CBO better put out a disclaimer quick on this crappy proposal. Else we have yet another piece of Republican propaganda for the media to echo as legit - with CBO imprimatur. Great.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
rbe1
February 11, 2010 3:57 AM
No, Congress is shut down because Reid can't get 60 votes to force a vote on a sense of the Senate resolution to force the snow to stop.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
masanf
February 11, 2010 5:34 AM
It is pathetic how the left is now trying to turn a budget proposal from one guy into the "GOP budget". What a transparent bunch of bullshit. Since all the left wing blogs are pushing it, this talking point must have been discussed on journolist.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Bruce Webb
February 11, 2010 8:52 AM in reply to masanf
Speaking to no one in particular.
Ryan is Ranking Member of the House Budget Committee and so the guy charged with writing the Republican budget.
It it looks like a duck, sounds like a duck, and walks like a duck it doesn't require some huge fricking conspiracy to have people say 'duck'.
Whistling past the troll bridge.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
CaliforniaMike
February 12, 2010 9:55 PM
One big problem with all this is that the Republicans have figured out an amazing way to frame the debate. Vouchers for Medicare and private accounts for Social Security are horrible ideas, but they can say they're giving people control over their own lives and Democrats are trying to decide for them.
How do you succeed when you have to tell people they really don't have enough knowledge to run their own retirement accounts?
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
patmcgrowen
February 12, 2010 11:14 PM
I'm beginning to think if the "majority" of the American people actually buy this BS, Canada is looking better and better all the time. I'm really tired of trying to convince people that these neo-Conmen are only out for their own money filled pockets and couldn't care less about the average American. If these idiots take control of the government again, I will be moving. They love to say Love or Leave It, I know which side I'm on. Let the fools crash and burn and I will enjoy watching it from a safe distance.
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?
Sarah Miller
May 31, 2010 9:02 AM
It is possible to get rid of almost anything. But somethings are always tough and literally impossible to overcome.
For rest visit: http://www.getridofstuffs.com/
Reply | Flag Abuse
Are you sure this comment violates TPM's Terms of Service?