Wednesday, July 26, 2006

And how do you plan to pay for it?

Finally someone in the Treasury Dept asks the question that any good salesman will ask sooner rather than later. The naturally mendacious Republicans always called the Democrats "tax and spend", but at least they had the money in hand when they spent. Our Dear Embattled Fratboy has always had someone bail him out and never understood the concept of paying for what he took. And in a report from the Treasury Dept it seems that no one else did either, until now.
The Congressional Budget Office and Congress's Joint Committee on Taxation provide dynamic analyses of how changes in tax policy are likely to affect the economy but do not use "scoring," which estimates the effects of tax changes on the governments tax receipts.

Earlier this year, Bush's budget proposed creating a Treasury Division on Dynamic Analysis to refine its approach, saying, "It is envisioned that dynamic analysis eventually would evolve into dynamic scoring."

The Treasury report released yesterday relieved "a lot of fears that dynamic scoring would lead to the view that cutting taxes raises revenue," said Jason Furman, a senior fellow at the liberal Center on Budget and Policy Priorities. Rather, the report "pours a huge bucket of cold water on the exaggerated claims that tax cuts transform the economy and pay for themselves."

On the contrary, Furman said, the Treasury's estimates suggest that, under the best long-run scenario, the tax cuts' boost to tax payments would offset less than 10 percent of their initial cost.

The Treasury report highlights Bush's call for both permanent tax cuts and "spending restraint."

But government spending has increased sharply during the Bush administration, said Leonard E. Burman, director of the Urban Institute's and the Brookings Institution's joint Tax Policy Center. He faulted the White House for deferring discussion of the types of big spending cuts that would be required to finance the tax cuts.

"All of the hard questions are swept under the rug," said Burman, a Treasury official in the Clinton administration. "We've increased spending and cut taxes, which is politically a very effective strategy. But in the long run, the effect on the economy is a disaster."
In the good old days, we called folks who couldn't pay their debts, deadbeats. Now we call them Republicans.

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