The Budget Trick That Will Be Used to Sell Trumpcare
WHY YOU SHOULD CARE
Because the battle over Trumpcare (or Ryancare) rests on the numbers.
By Daniel Malloy
As buzz phrases go, it sounds a lot more like a descriptor of some March Madness powerhouse than, say, a macroeconomic doctrine. But you’ll be hearing this one well into the spring, as Republicans battle over the perception of its health care plan. Some say the process could even reshape how Washington goes about its budgeting. What is this magical tool?
The phrase means accounting for the broad economic ramifications of legislation. Conservatives say using dynamic scoring better reflects reality. Liberals say dynamic scoring is designed just to make taxes looks better than they should.
The Congressional Budget Office, a nonpartisan referee on the fiscal implications of pending bills, holds outsized sway on the outcome of major bills. When it comes to tax cuts, conservatives have long accused the CBO of playing checkers when it should be playing chess: They say it calculates the fall in revenue, but doesn’t account for the stimulus and tax revenue the cuts will eventually provide. Ignoring the broader effects of tax cuts, conservative think tank American Enterprise Institute scholar Kevin Hassett told Congress in 2015, is “to deny the value of economic analysis whatsoever.”
To many liberals, such predictions are guesswork at best and sophistry at worst. Tax cuts under George W. Bush, for instance, were followed by rising deficits. Even though other factors (9/11, for starters) played a role, the early 2000s offer a real-world case against tax cuts paying for themselves.
Nonetheless, when Republicans seized both chambers of Congress in 2015, they put new rules on the CBO and the Joint Committee on Taxation requiring that estimates for major bills include dynamic scoring. Republicans such as House Budget Committee chairman Tom Price called it common sense; a key Democrat, Michigan Rep. Sander Levin, called it “voodoo economics.” Now Price is the secretary of Health and Human Services, who is pushing hard for an Obamacare replacement with a lot riding on the numbers.
Why do the figures matter? In a spin-happy town, the CBO scores have long carried weight for their lack of bias. But that reputation stands on shaky ground. Even though the CBO’s chief is a Republican appointee with a conservative background, the Trump administration and others tried to undermine his report on the Obamacare replacement before it was even released by pointing to the CBO’s misses on the original Obamacare. (Its forecast for the health care exchanges was off by millions, in part because it expected more employers to drop health insurance.)
So if you don’t trust the CBO, who should you trust? Conservative organizations have long promoted their own scores. Harry Stein, fiscal policy director for the liberal Center for American Progress think tank, predicted the administration would push friendlier estimates to rebut the CBO. “Dynamic scoring is one more way they’re going to be opening up the factual questions for taxes to more alternative facts and falsehoods and economic simulations that don’t resemble reality,” he says.
The CBO did deliver its much-dissected verdict Monday on the American Health Care Act, which it claimed would reduce the budget deficit by $337 billion over 10 years, while 24 million fewer people would have health insurance — in part because they wouldn’t be forced to buy it anymore. But this was not a “dynamic” score. With the bill whizzing through the House, the CBO said it did not have enough time to crunch the bill’s “macroeconomic effects.”