In an attempt to prove that they are trying to avert the so-called “fiscal cliff” scheduled to occur at the end of the year, Congressional Republicans have floated a “compromise” on taxes: they’ve agreed to new revenue, so long as it comes from closing loopholes and “dynamic scoring” (i.e. revenue increases due to economic growth), not raising tax rates. The catch, of course, is that tax cuts in the past have not led to appreciable revenue growth.
President Obama — who has said that a budget deal should include $1.6 trillion in new revenue — rejected the GOP’s dynamic scoring canard yesterday, saying “What I will not do is to have a process that is vague, that says we’re going to sorta-kinda raise revenue through dynamic scoring or closing loopholes that have not been identified.” Sen. Chuck Schumer (D-NY) derided dynamic scoring as a “Rumpelstiltskin fairy tale.” And 13 more Democratic senators evidently share that sentiment:
A group of at least 13 Democratic senators, led by Jay Rockefeller of West Virginia and Tom Harkin of Iowa plan to send a letter to President Barack Obama laying out principles for a budget deal.
The letter calls on Obama to strike a deal on the fiscal cliff that has a 1-to-1 ratio of tax increases to spending cuts.
“These revenues must be real and not inflated by ‘fuzzy math’ like dynamic scoring,” the letter reads. “Any deal should end the Bush tax cuts for the wealthiest two percent of the population and close tax loopholes benefitting wealthy Americans and corporations. Furthermore any deal must include a one-to-one ratio of revenues to spending cuts.”
“Dynamic scoring in this context is an illusion — just a way to turn wishful thinking into numbers. It is not serious and should be taken off the table,” said MIT economist Simon Johnson.