A key analysis of the Senate Republican tax plan released late Thursday afternoon threw a wrench into the GOP leadership’s rush to pass tax reform this week. In response, Republican lawmakers are choosing to simply ignore the report’s findings.
Just as the Senate was about to vote on Thursday on whether to advance their tax plan, the non-partisan Joint Committee on Taxation released a troubling report. The JCT report found that the $1.4 trillion dollar tax plan would generate around $400 billion dollars worth of growth, leaving the total net cost of the plan to be $1 trillion dollars — completely eviscerating any notion that the plan would pay for itself, a key White House talking point.
“We think we can pay for the entire tax cut through growth over the cycle,” said Chief White Economic Adviser Gary Cohn told CNBC in September.
In reality, according to the JCT, the plan won’t even make up for a third of what it costs and increase GDP by 0.8 percent over the next decade.
In the face of such bleak numbers, rather than sending the legislation back to committee to keep working on it, Republicans have decided to brush aside the analysis. Multiple Republicans are now saying the JCT’s findings can’t be trusted because the report underestimates the economic growth lawmakers are confident will result from tax reform.
Sen. Susan Collins (R-ME) — who was instrumental in voting against multiple attempts at repealing the Affordable Care Act this summer, in large part because she believed the data from the Congressional Budget Office (CBO) finding it would leave millions uninsured — now says she’s now skeptical of this kind of impact analysis.
Julia Lawless, a spokeswoman for the Senate Finance Committee, called the JCT’s analysis “incomplete,” adding that the JCT’s findings “are curious and deserve further scrutiny.”
No tax plan has ever paid for itself, so it’s unclear why this one, which centers around a gigantic tax cut for corporations, would be any different.
And on top of that, the JCT is not exactly a partisan source hostile to Republicans’ policymaking agenda. It’s a committee composed of three Senate Republicans, three House Republicans, two House Democrats, and two Senate Democrats — in other words, a GOP-controlled body.
The JCT’s impact assessment is some of the only information lawmakers have to go on as they contemplate the policy consequences of this legislation. It’s also worth noting that Congress doesn’t even have the official analysis of the tax plan from its own Treasury Department. As a result, a Treasury watchdog group is opening an investigation as to why the analysis was never made public.
The criticism that the committee’s analysis of the tax bill isn’t fully complete does a have bit of truth to it. But that is the fault of GOP senators, who were making last-minute decisions on the fly last night on the Senate floor, playing fast and loose with a trillion and a half dollars. In order to get the votes they need to pass the tax bill, the GOP added a number of provisions without figuring out how they would be paid for.
Sen. Susan Collins (R-ME) was won over by a $10,000 property tax deduction in the tax bill, for example. This comes with a hefty price tag — including a property tax deduction would make the Senate bill $100 billion more expensive over the next decade, and McConnell only has about $80 billion worth of flexibility.
Sens. Steve Daines (R-MT) and Ron Johnson (R-WI) also got what they asked for, a higher deductible rate for pass-through business owners of 23 percent (up from 17.4 percent) — but again, we have no idea how exactly this will be funded.
The Senate resumes in the early afternoon and potentially will vote on the tax plan as early as later today. Cornyn has indicated he believes they have the votes to pass it.
This is the second recent instance of reckless lawmaking, forgoing regular order, and dismissing valid analyses about a huge piece of legislation’s impact — just weeks after Congress attempted to rush through an Obamacare repeal bill in the same manner.