The latest evaluation of the Senate’s tax bill Thursday is enough to end the Republican “fantasy of magical growth” in the economy, top Finance Committee Democrat Sen. Ron Wyden (OR) said.
Congress’s Joint Committee on Taxation, the official body tasked with estimating the tax bill’s impact, reported the Senate Republican’s tax bill would grow the economy by about 0.8 percent over 10 years, and still cost about $1 trillion.
That is a wildly lower growth number than what Republicans have been promising; Treasury Secretary Steve Mnuchin had said, “not only will this tax plan pay for itself, but it will pay down debt.” As Republicans hurtle toward a vote on the bill, the report massively undercuts the GOP’s argument for the bill.
But senate Republicans say they just don’t believe the analysis.
“I think it’s pretty clear they’re wrong,” Majority Whip Sen. John Cornyn (R-TX) said of the JCT score.
Cornyn said the tax bill would bring “at least” 3.2 percent annual GDP growth. Sam Greenberg, an analyst with the right-leaning Tax Foundation, calculated an annual 4 percent year-over-year GDP growth, which Trump has suggested would mean the economy was about 12.9 percent larger on average. The JCT score, which calculates economic growth over a decade, estimated the tax bill would grow the economy an average 0.8 percent in that time.
This is the first dynamic score of the tax bill, meaning it forecasts how the economy will react to the policy. Republicans are making the argument that huge corporate tax cuts will bring back jobs and investments and massively grow the economy — in other words, that tax cuts would pay for themselves. They have long called for this kind of scoring.
But now, with an estimate much less optimistic than what they’ve been selling to their constituents, they’re ignoring the numbers and going with intuition.
“It’s just a reference point — it’s not going to influence my decision on the bill,” Sen. Thom Tillis (R-NC) said.
Republicans have a habit of ignoring the not-so-rosy numbers
Having spent months selling a tax bill that would bring back historic levels of economic growth, Republicans were quick to push back against the JCT’s analysis of the tax bill.
A statement from the Republican-led Senate Finance Committee’s spokesperson, Julia Lawless, said the score couldn’t possibly be right because the bill isn’t in its final form.
“An analysis of tax provisions that do not reflect the final outcome of the evolving Senate tax bill — which will be amended on the floor this week — is incomplete,” Lawless said. “…the findings of JCT are curious and deserve further scrutiny.”
While it’s true that Republicans are still debating key parts of the bill in the final hours before the vote, the committee analyzed what Republicans approved in two Senate committees, and largely had the support of the majority of the Senate Republicans conference.
But Republicans have become accustomed to questioning the official analyses of their signature pieces of legislation. At the start of the year, when they the GOP was trying to repeal Obamacare, they repeatedly balked at the Congressional Budget Office’s scores of the Republicans health care bills, all of which projected millions of uninsured Americans.
Cornyn echoed similar talking points from the health care debate, saying he didn’t trust the JCT’s model for analysis:
“One thing you know is that they are always going to be wrong but you don’t know if they are going to be too high or too low,” he said. “But even their models, I don’t think, take into account the enormous influx of investment back into the United States and positive impact that will have on economic growth.”
Sen. James Lankford (R-OK), a deficit hawk who early on expressed concern about the tax bill’s impact on the deficit, also questioned the “assumptions” made in the analysis.
“I’m amazed that they would think that our growth is less than 1 percent in 10 years, that’s a little surprising,” Lankford said. “I have not seen anything that low as a growth estimate so I’m trying to go through and figure out their assumptions.”
Others were much more brash in their dismissals.
Sen. John Barrasso (R-WY), who first said he had not seen the JCT score, later seemed to recall it as something he didn’t need to pay attention to.
“Oh, that’s the one that doesn’t believe that there’s going to be economic growth? Yeah, I ignore that,” Barrasso said.