[Mb-civic] Trillion-Dollar Gimmick - David S. Broder - Washington Post Op-Ed

[William Swiggard]

Trillion-Dollar Gimmick
Extending Bush's Tax Cuts Through Sleight of Hand

By David S. Broder
Sunday, February 19, 2006; B07

Back when the late John Mitchell was attorney general in the Nixon 
administration, he advised reporters, "Watch what we do, not what we say."

That advice certainly applies to the Bush administration as well. The 
latest bit of evidence to come to my attention is what you might think 
of as the Case of the Disappearing Trillion.

The tip-off arrived last week in an e-mail from the Center on Budget and 
Policy Priorities. It is a Washington research organization with a 
distinctly liberal point of view but a deserved reputation for accuracy 
in its figures.

In this case, the information the center cites was confirmed to me -- 
though with a very different interpretation -- by officials of the White 
House Office of Management and Budget. It involves the treatment in the 
budget of the Bush tax cuts passed by Congress in 2001 and 2003.

Those rate reductions, when enacted, had expiration dates of 2010, 
designed to keep their long-term costs within the limits set by the 
budget resolutions of which they were a part. The president is urging 
Congress to make those tax cuts permanent, but his proposal is 
controversial and has not yet passed.

This year, however, the budget the president submitted on Feb. 6 simply 
assumes that the tax cuts have been made permanent -- and thus includes 
them in the "baseline" for all future years.

The effect, according to the center's analysis, is that "legislation to 
make these tax cuts permanent will be scored as having no cost whatsoever."

In fact, this analysis says, "The administration's proposal, by changing 
the rules after the 2001 and 2003 tax cuts were enacted but before they 
are extended, would ensure that the cost of continuing the tax cuts in 
the years after the current sunset dates would never be counted. The 
costs in those years were not counted when the tax cuts were first 
enacted. . . . Now, the administration is proposing that the tax cuts 
for those years also be ignored when the tax cuts are extended. To fail 
ever to count the cost of the tax cuts in the years after the sunset 
dates . . . would represent one of the largest and most flagrant budget 
gimmicks in recent memory."

How large? The Congressional Budget Office scores the cost of making 
these tax cuts permanent at $1.6 trillion over the next decade. The 
administration's estimate is somewhat less -- $1.35 trillion.

But, the folks at the OMB told me, it's wrong to claim that they are 
hiding that cost. They told me to get out my copy of the budget, and 
they told me right where to look. And sure enough on Column 8, Line 11 
of Table S-7 on Page 324 of the green-bordered book, I found the very 
figure they had cited -- $1.35 trillion.

The heading on the chart of Effects of Proposals on Receipts reads: 
"Make Permanent Certain Tax Cuts Enacted in 2001 and 2003 (assumed in 
the baseline)." Those last four words conceal more than a trillion 
dollars worth of lost revenue.

But that is not all, my OMB friends argued. If you turn to a 396-page 
volume called Analytical Perspectives, as any conscientious citizen 
should do, on Page 215 and again on Page 360, you will also find 
acknowledgment of the change in the bookkeeping. The key passage says, 
without elaboration, that "the 2001 Act and 2003 Act provisions were not 
intended to be temporary, and not extending them in the baseline raises 
inappropriate procedural roadblocks to extending them at current rates."

That sentence must be parsed. The basis for saying those two tax cuts 
were "not intended to be temporary" is that when Bush recommended them 
to Congress, he said they should be permanent. But Congress put time 
limits on them -- which Bush now finds it inconvenient to acknowledge.

And those "inappropriate procedural roadblocks to extending them"? 
Translation: If you tell Congress the cost of making those tax cuts 
permanent, lawmakers might have second thoughts about doing it.

In fact, it turns out that Bush tried to get Congress to go along with 
this bookkeeping switch back in 2004, actually submitting legislation to 
authorize the change. The House refused to accept it. He put it back in 
his budget last year, with the same result. But this year he's back 
again, with more urgency, as he presses the case to make these tax cuts 
permanent.

Now that you know exactly how easy it is to find this all explained in 
the budget, I'm sure you are as reassured as I am about the candor of 
this administration.

http://www.washingtonpost.com/wp-dyn/content/article/2006/02/17/AR2006021701848.html
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