The Absurd Budgetary Math Of The GOP’s Sacred Cows

The CBO has just published a new version of Rosy Scenario, which is a wonder to behold. Its updated long-term budget projections presume that:

• There is no recession for the next ten years, although we have had one on average every six years since 1954;

• The Inflation Genie is stuffed back into the 2.0% bottle within two years, again with no recession in 2023-2024 to help it along;

• The weighted average cost of interest on the massive Federal debt never rises above 3.2% as far as the eye can see, albeit at this very moment all UST rates from 3-month bills to 30-year bonds are trading at yields above that level; and,

• For the piece de resistance, the revenue projections incorporate Donald Trump’s hidden $235 billion per annum “outyear” Federal tax increase, which is assumed to be fully implemented by 2027.

The first three of these are pretty standard head-in-the-sand fare of the kind that make CBO’s budget projections a running farce. But the massive Trump tax increase is in a class of budget chicanery all by itself.

To wit, the Trump/GOP tax cut was alleged to cost “only” $1.6 trillion over 10 years, but it was hideously front-loaded to mesh exactly with the Donald’s 2020 re-election campaign. Accordingly, the revenue loss peaked at $257 billion in FY 2020, which figure shrinks to just $20 billion in 2027.

That is to say, compared to the election year hall pass, individual income taxes will be $202 billion higher in 2027 and business levies will be $35 billion higher. That’s what happens, of course, when you craft a “tax cut” statute in which all the cuts are written in disappearing ink and expire after 2025.

What we actually have, of course, is another iteration of the 2012 “fiscal cliff”. Back then it was the Bush tax cuts which were set to expire, but election year politics made no never mind. Obama and his pro-little guy administration gladly signed a permanent extension into law, and that was that. The GOP sponsors of this politically devious “fiscal cliff” didn’t even need to draw much political blood.

So they did it again in 2017, whether the Donald got the joke or not. And in the 2024 general election campaign you can bet your bottom dollar that Sleepy Joe or his surrogate will pull an Obama and pledge to save the public from a massive tax increase—one that its GOP authors will be yelping in full war paint against.