If you’re looking for evidence that Republicans aren’t worried about actual federal deficits, look no further than their about-face on how to count the Super Committee’s budget savings.
The details are technical, but crucial, so bear with me.
At the very end of the debt limit fight, Republicans crowed that the Super Committee’s inherent design would make it difficult for the panel’s Democrats to insist on tax increases. Because of how the Congressional Budget Office typically scores legislation, they argued, any attempt to raise marginal tax rates from their current Bush-era levels would actually score as a big tax cut and thus a budget buster — a fact that would make it difficult for the Committee to hit its $1.2 trillion target.
The CBO defaults to what’s known as a “current law baseline.” It weighs how proposed legislation would impact the budget compared to what would happen if Congress does nothing. Well, if Congress does nothing, all the Bush tax cuts will expire automatically at the end of 2012, largely eliminating the country’s medium-term deficits. As a result, Democrats on the Super Committee have been unable (and perhaps unwilling) to insist that the Bush tax cuts for top earners expire — if the rest of those tax cuts become permanent, it scores as a huge tax cut.
For that very reason Republicans insisted to reporters that they’d hold the Super Committee to the current law baseline. I know. I was one of those reporters.
Fast forward three and a half months, Republicans now want to use the Super Committee report as a vehicle for making all the Bush tax cuts permanent. But compared to current law, that scores as an even bigger tax cut — it drops trillions of dollars in projected revenue off a cliff.
So to make the math work out, they want to revert to what’s known as a “current policy baseline.” Since the Bush tax cuts are in effect right now (i.e. they’re “current policy”), extending them forever is budget neutral compared to that baseline. The only difference, as far as deficits are concerned, is about $4 trillion over the next decade. But what’s $4 trillion between friends?
This isn’t about reducing deficits. It’s about getting what they want regardless of the actual state of the federal budget.
