The Emperor’s New Mini-Bill

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June 29, 2021 3:34 p.m.

This is an issue I first mentioned on Friday. While Senate Republicans are going full performance art drama about whether they can still support the proposal they already agreed to support, there’s another element of the drama in some ways just as interesting.

The bill – or rather outline proposal, there’s no bill – could not include any new taxes and had to be paid for. Republicans insisted on those conditions. The bill includes a number of “payfors” meant to accomplish this. But they are at least half phony. Some are more real than others. In some cases there’s legitimate debate about how much revenue they could yield – stepped up tax enforcement on the super wealthy is an example of that. But the core issue is that a lot of it is pretend. Now the Post has talked to experts about the list of payfors and it confirms in detail what was pretty clear in general: a mix of wishful thinking and hocum. In other words, the negotiation over the bipartisan mini-bill was largely a process of finding notional ‘payfors’ that Republicans could pretend were real.

Does this matter?

Well, it depends how you look at it. Many economists aligned with the Democratic party believe that it would actually be a plus in policy terms to finance more infrastructure with debt – so a positive good not just easier than raising taxes or finding things to cut.

Critically, if the payfors don’t pan out that doesn’t mean there’s less spending. It just sliding into debt financing. So while it’s good to be transparent about budgeting in general in many ways it’s really no skin off Democrats’ backs if these payfors don’t work out. The money still gets spent and it ends up being financed with debt, which most economists who Democrats listen to think is at least fine and maybe preferable.

For Republicans, it’s a little less clear. The truth is they don’t really care, as long as they get to pretend its paid for.

It’s a good illustration of how much hocum, both political and policy hocum, is bundled up into this exercise.

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