Category: Money

Republicans search for proof their tax plans will pay for themselves

Republicans search for proof their tax plans will pay for themselves

The New York Times
By Jim Tankersley
Image courtesy of Tom Brenner/The New York Times

Republican leaders keep insisting that their plans to cut taxes by $1.5 trillion over the next decade will not add to the national debt — yet economic analyses of the Senate and House proposals keep predicting that the plans will do just that.

The disconnect is prompting House and Senate Republican leaders and the Trump administration to hunt down — and promote — more optimistic forecasts, even if they exclude large parts of the tax bills from their analyses or assume growth-boosting features that are not, in fact, in the bills.

Republican leaders have said the tax cuts they are planning will essentially pay for themselves. Lawmakers gave themselves, via their 2018 budget resolution, space for $1.5 trillion in revenue losses from tax cuts, but they have promised those losses will be offset by increased economic growth spurred by the tax overhaul. Finding a model that supports the ambitious economic growth projections is critical to their ability to pass a tax cut along party lines.

The House and Senate bills have been introduced and amended at a rapid clip, and economists are only now beginning to plug their details into sophisticated models that predict how much additional growth the cuts might produce. So far, every so-called dynamic analysis that scrutinizes the full details of the bills and factors in economic growth finds that those plans would add at least $500 billion and as much as $1.7 trillion to the deficit.

In an interview on Friday, Senator Mitch McConnell of Kentucky, the majority leader, said that “we’re confident that the $1.5 trillion gap would be filled” by economic growth. Mr. McConnell said the tax bill would add 0.4 percentage points to annual economic growth, though he did not cite a specific analysis suggesting that assertion. “So we believe this is a responsible budget and a responsible tax reform,” he said.

Speaker Paul D. Ryan of Wisconsin insisted last week that the House bill would not add to the deficit, even after an analysis by the independent Tax Foundation, which uses a model that tends to find large growth effects from tax cuts, found that the bill would add $1 trillion to deficits over a decade.

“We believe that we’re going to be fine on that,” Mr. Ryan said. “We believe that when you look at other analysis, whether it’s going to be Treasury or the rest, that we’re right there in the sweet spot, with economic growth that gives us more revenue with where we need to be.”

Ivanka Inc.

Ivanka Inc.

The Washington Post
By Matea Gold, Drew Harwell, and Simon Denyer
Image courtesy of Matt McClain/The Washington Post

On Inauguration Day, President Trump stood in front of the U.S. Capitol and vowed that his “America First” agenda would bring jobs back to the United States.

“We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs,” he declared, adding: “We will follow two simple rules — buy American and hire American.”

Looking on from the front of the stage was Trump’s daughter Ivanka, the celebrity and fashion entrepreneur who would soon join him in the White House.

The first daughter’s cause would be improving the lives of working women, a theme she had developed at her clothing line. She also brought a direct link to the global economy the president was railing against — a connection that was playing out at that very moment on the Pacific coast.

As the Trumps stood on stage, a hulking container ship called the OOCL Ho Chi Minh City was pulling into the harbor of Long Beach, Calif., carrying around 500 pounds of foreign-made Ivanka Trump spandex-knit blouses.

Another 10 ships hauling Ivanka Trump-branded shoes, cardigans and leather handbags bound for the United States were floating in the north Pacific and Atlantic oceans and off the coasts of Malta, Malaysia, Japan, South Korea and Yemen.

Those global journeys — along with millions of pounds of Ivanka Trump products imported into the United States in more than 2,000 shipments since 2010 — illustrate how her business practices collide with some of the key principles she and her father have championed in the White House.

The OMG moment at a congressional budget hearing you should care about but don’t — yet

From The Washington Post — Written by Jonathan Capehart — Image courtesy of AP Photo/Jacquelyn Martin

Mick Mulvaney, director of the White House’s Office of Management and Budget, said out loud on Wednesday what some feared back in March someone from the Trump administration would say. America is running headlong toward default.

This all went down at a House Budget Committee hearing. Surely an otherwise humdrum affair as dry as the towel section at Macy’s. But a question from Todd Rokita (R-Ind.), vice chairman of the Budget Committee, gave Mulvaney the opportunity to provide that much-needed element of OMG.

Rokita: Does the administration have a preferred legislative approach to the debt-limit issue? For example, a specific amount or a specific time period? Secondly, how soon do you think you need to act?

Mulvaney: Very briefly, the answer to your first question is no, we do not have a final stated policy yet. I can tell you that I met about an hour yesterday with [Treasury] Secretary [Steven] Mnuchin to discuss this exact topic. … Secondly, regarding the timing, my understanding is that the receipts, currently, are coming in a little bit slower than expected and you may soon hear from Mr. Mnuchin regarding a change in the date.