For some time now, liberal writers have warned that a full GOP takeover of Congress will lead to a return of “voodoo” economics. The basic idea is that Republicans might use their clout to prevail upon budget scorekeepers to use “dynamic scoring,” which takes into account the macro-economic payoff in revenues in judging the impact of a tax proposal.
After dropping hints in this direction, Rep. Paul Ryan, the new chairman of the House Ways and Means Committee, has now basically confirmed that this is the game plan.
Ryan’s goal is to slash high end taxes and to balance the budget in 10 years. He says he’ll make up the lost revenues by closing some loopholes, but “dynamic scoring” is also a crucial piece of this puzzle. Liberals warn that “dynamic scoring” should only be used in limited ways, because its accuracy is very uncertain, but conservatives like it because it allows them to claim tax cuts will produce more revenue from economic growth, reducing the need for the hard choices required to make up that revenue in the plan itself.
Paul Krugman recently explained that this supply-side economics claim — that “cutting taxes on high incomes would lead to spectacular economic growth, so that tax cuts would pay for themselves” — goes back 35 years, and a Republican takeover of Congress might infuse the same old “voodoo into supposedly neutral analysis.” Or, as Jonathan Cohn put it, instituting dynamic scoring would basically be an “attempt to rig the budget game” to “make Republican-supported tax cuts seem a lot less costly.”
Ryan’s confirmation comes at the end of this interview with Lori Montgomery:
Ryan has said it would be easier to hit that target if the Congressional Budget Office used a process called “dynamic scoring” to measure broad effects on the economy when judging tax legislation. While CBO already uses dynamic scoring on a limited basis, Ryan said Wednesday he will have additional recommendations in the new Congress “for making sure we take these things into consideration.”
The key here is Ryan’s vow to “make sure” that dynamic scoring is used. And if this moves forward, it will provoke a fight with Democrats that will reignite the argument over Republican economic doctrine. In a preview of how Dems will frame their side of the argument, a senior House Democratic aide tells me:
“At a time when Republicans are trying to rebrand themselves, highlight their concern about middle class economic anxiety and show they have a poverty agenda, they are doubling down on an economic philosophy that has dominated their agenda for 30 years. Decades after the Reagan tax cuts, they are doubling down on trickle down economics. At a time when the deficit has been halved, Republicans are ready to blow it up again to pay for huge tax cuts, while masking over what they are doing.”
* OBAMA PLAN WILL SHIELD FOUR MILLION FROM DEPORTATION: The New York Times has new details on what Obama will announce tonight. The basics:
* The administration will extend temporary deportation relief and work permits to up to 3.3 million parents of children who are U.S. Citizens or legal residents.
* The plan will also protect an additional 700,000 people by expanding Deferred Action for Childhood Arrivals, which protects those brought here illegally as children. Previously, only those 30 and below were eligible; the new plan will lift that age cap.
* It appears the plan is unlikely to include parents of DACA recipients. The administration should be pressed to explain the legal and moral rationale for this.
That leaves over six million people still eligible for deportation, and Congress has only provided enough funding to deport only a small fraction of even those remaining millions, a fact that is central to the argument for why this is legal.
* OBAMA FACES BIG CHALLENGE IN SELLING ACTION: The new NBC/WSJ poll finds that only 38 percent of Americans supports the coming action, while 48 percent oppose it. Note this additional finding:
Who do you want to see the lead role in setting policy for the country — Barack Obama or the Congress?
Despite broad support for a path to citizenship (which the poll also shows), public skepticism about unilateral action could be fueled by Obama’s unpopularity. That’s why Dems will likely stress accountability for the undocumented in making their argument.
* A NOTE ON OBAMA’S FLIP-FLOP: Critics have rightly argued Obama previously said he had very limited executive authority to act on deportations. The New York Times has a good editorial spelling out why he does have expansive authority and supplying the key context for Obama’s shift:
It has been the immigration system’s retreat from sanity, of course, that made Mr. Obama’s new plan necessary. Years were wasted, and countless families broken, while Mr. Obama clung to a futile strategy of luring Republicans toward a legislative deal. He has been his own worst enemy — over the years he stressed his executive impotence, telling advocates that he could not change the system on his own. This may have suited his legislative strategy, but it was not true. It’s good that Mr. Obama has finally turned the page.
* IS OBAMA REALLY FLOUTING ‘POLITICAL NORMS’? It has been widely argued that even if this executive action is legal, it will set a precedent for future GOP presidents to decline to enforce the law in other areas. Brian Beutler has a good piece taking apart that argument:
[This] just goes to show how normal Obama’s supposed norm violating executive action really is. Republican presidents can, and will again, avoid enforcing environmental regulations. If Republicans identified a serious legal basis for selectively enforcing the estate tax, they could go ahead and do it. It would infuriate liberals just as weak environmental enforcement infuriates liberals. And it would be incumbent on the norms police to show that the discretion that exists in immigration law also exists in tax law. But it wouldn’t add up to a new method of politics.
Right. What’s more, in the case of immigration law, the president actually does have the authority to do this. The question of whether this sets a precedent for other areas is: Does the law give the president that authority in other areas?
* A BIG VICTORY FOR IMMIGRATION ADVOCATES? HuffPo puts Obama’s executive action in context, noting it would represent a victory immigration advocates have sought for many years and could represent a stepping stone to more reforms in the future. Frank Sharry of America’s Voice:
“If the president’s executive action comports with press reports that some 5 million immigrants will be able to come forward and live in freedom and with dignity, it will be the biggest win for immigrants and their allies in 25 years. And if we are successful in fighting off Republican attempts to kill it in the crib, it will be a turning point for our movement.”
That success is anything but assured, and GOP success in rolling it back would be disastrous for the Democratic Party, underscoring the stakes in the fight to come.
* AND THE QUOTE OF THE DAY, DEPORTATION DERANGEMENT EDITION: It comes courtesy of Senator Tom Coburn:
“The country’s going to go nuts, because they’re going to see it as a move outside the authority of the president, and it’s going to be a very serious situation. You’re going to see — hopefully not — but you could see instances of anarchy…You could see violence.”
Huh. Well, if executive action to shield people from deportations poses this dire a threat, Republicans should be willing to threaten to shut down the government to block it, right?