President Donald Trump’s top economist blasted the Congressional Budget Office on Tuesday, dismissing the scorekeeper’s recent projections that the Republican tax law would push America’s annual deficit over $1 trillion.
“Never believe the CBO. Very important: Never believe them,” Larry Kudlow, director of Trump’s National Economic Council, said during an interview on “Fox & Friends.” “They’re always wrong, especially with regard to tax cuts, which they never score properly.”
Trump reportedly watches “Fox & Friends” regularly and often reacts to the programming either via posts on Twitter or with proposals for action.
Kudlow’s remarks reflect the widespread belief in the Republican Party that the CBO has failed to adequately account for higher economic growth when estimating the tax law’s impact on the deficit. The CBO said the tax law will cut government revenue by $1.8 trillion over the next 10 years, or by $1.3 trillion when factoring in potentially higher growth spurred by the law.
Kudlow, a longtime television commentator who was tapped last month to lead the economic council, said CBO’s estimates of growth under the law should be much higher. He argued that the tax law will create far greater economic growth than most nonpartisan forecasters estimate.
While some in Congress and the White House have questioned CBO employees’ integrity or accused them of being partisan, Kudlow clarified that he meant his statement as a critique of their methodology – not their motives.
“The CBO people are professionals. This is not a personal attack,” Kudlow said. “But their record on tax cuts is not good.”
Several other nonpartisan studies, as well as Wall Street analysts, have also disputed Republicans’ contention that the tax law will pay for itself. The Joint Committee on Taxation (JTC), Congress’s official scorekeeper, estimated in December that the tax law would cost $1.4 trillion over 10 years, or about $1 trillion when accounting for the effects of potentially higher growth
The Tax Policy Center, economists at Moody’s Analytics and the Committee for a Responsible Federal Budget have all also projected at least a $1 trillion hit from the law. The right-leaning Tax Foundation said that the plan would cost the nation at least $1.47 trillion over 10 years, or $448 billion factoring in higher growth.
Congressional Republicans, as well as Trump’s team, also heavily criticized the CBO during the debate over the GOP health-care legislation.
“The CBO has consistently proven it cannot accurately predict how health-care legislation will impact insurance coverage,” the White House said at the time. “This history of inaccuracy, as demonstrated by its flawed report on coverage, premiums, and predicted deficit arising out of Obamacare, reminds us that its analysis must not be trusted blindly.”
(c) 2018, The Washington Post · Jeff Stein