In scoring his budget proposal, Ryan told CBO to ASSUME IT ACHIEVES IT'S REVENUE/SPENDING GOALS!
... IN OTHER words the CBO was told, score my budget pretending it works as I predict! What lawmakers ordinarily do is ASK CBO to ascertain IF the proposed legislation will actually produce the revenues or savings that are expected!
(all emphases are my own_JohnW)
http://taxvox.taxpolicycenter.org/2012/03/27/ryan-would-shift-the-fiscal-burden-to-low-and-middle-income-households/
The budget proposal House Budget Committee Chairman Paul Ryan (R-WI) released last week is, essentially, an effort to have low- and middle-class households bear the entire burden of closing the fiscal gap and bear the costs of financing an additional tax cut for high income households.
The Tax Policy Center (which I co-direct) analyzed the revenue policies as proposed by Rep. Ryan. We simulated the effects of repealing the AMT and reducing ordinary income tax rates to 10 and 25 percent. These proposals would cost about $3.2 trillion over ten years, on top of the $0.3 trillion lost from repealing taxes enacted to pay for Affordable Care Act, the $1.1 trillion lost from his desired reduction in the corporate tax rate, and the $5.4 trillion lost from first extending the Bush-Obama tax cuts (which he also supports). By 2022, the tax policies he has specified would lower federal revenues to just 15.8 percent of GDP. Talk about digging yourself a hole.
Ryan claims he can fill this hole by eliminating tax breaks, which he correctly identifies as spending through the tax code. At first glance, this sounds like a step in the right direction: broaden the base and lower rates. Yet, like many recent proposals, the devil is in the details. Ryan never specifies which specific tax expenditures he would cut.
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[FONT SIZE="3"]Lastly, it is worth highlighting that Ryan is gaming the system in creating budget estimates. His budget proposal is too vague to be scored, so he simply told the Congressional Budget Office to determine the effect of his budget proposal [FONT COLOR="RED"]**assuming** the proposal achieves its stated goals for spending and revenues[/FONT]. This is not the same as the usual approach which involves asking CBO to determine whether the proposal actually achieves its stated goals.[FONT COLOR="RED"] Instead, Ryan dictates the assumptions he wants and walks away with a seemingly favorable CBO report.[/FONT] This is smoke and mirrors. Ryan may not be the only politician to use the system this way, but that doesnt make his actions any more forthright or reveal anything informative about this plan.[/FONT]
Turbineguy
(37,342 posts)It fits right in with using an economic theory based on fiction.
applegrove
(118,683 posts)saras
(6,670 posts)Igel
(35,320 posts)It used to have a freer hand, but still was restricted in a lot of ways.
In evaluating tax hikes/cuts it had to assume that the effect wasn't "dynamic." Increasing taxes wouldn't affect behavior; increasing taxes wouldn't affect behavior. Even if one of the reasons for the tax was to affect behavior.
In looking at the recent health care act it was told to assume that the efficiencies projected would happen; that any tax increase/decrease in the law would happen. If Congress predicted in the law that they'd save $X then that's what they'd say.
Usually the CBO does as it's told. It's taken, however, to publicly stating that it's limited by these assumptions and that they expressly take no stance on the validity of the assumptions.
It's reasonable, on the one hand, to let the CBO consider anything it wants to. After all, laws can be intended to do all sorts of things and simply be irrational and counterfactual in their claims and methods. However, taking into account other facts or possibilities isn't a science. You can't include every plausible scenario and somebody in the CBO would have to choose. The CBO has no official bias; individuals might. Even if they don't, there can be a perceived bias.
So it's still not unreasonable, on the other hand, to tie the CBO's hands. This makes every score potentially a what-if game, played with an impartial actor. It reduces the usefulness of the CBO scoring, to be sure. But at least it gives a nice what-if game without the kinds of shenanigans played with the CBO's scoring of the Obama stimulus: For each effect there was a range. X number of jobs saved/created up through Y jobs saved or created. Depending on your source, you'd only hear part of the range once--"X to Y jobs saved or created"--then you'd hear the low-end or the high-end numbers quoted in isolation as though they were the only true numbers of importance.
It doesn't matter how they score a proposal, as long as people seriously consider the results in the light of the assumptions made with due regard to the methodology used.
annabanana
(52,791 posts)Flatpicker
(894 posts)Like most Republicans I know.
They won't let facts stand in the way of getting what they want.
Mysfyt
(50 posts)but you say this in the article:
"so he simply told the Congressional Budget Office to determine the effect of his budget proposal **assuming** the proposal achieves its stated goals for spending and revenues."
sorry to be a pain but do you have a source for that text? where is that quote from exactly.
i dont question you i just like to source all the facts i read.
Bill USA
(6,436 posts)<all emphases are my own>
http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-20-Ryan_Specified_Paths_2.pdf
The Long-Term Budgetary Impact of Paths for Federal Revenues and Spending [font color="red"]Specified by Chairman Ryan[/font]
At the request of the Chairman of the House Budget Committee, Congressman Paul Ryan, the Congressional Budget Office (CBO) has calculated the long-term budgetary impact of paths for federal revenues and spending [font color="red"]specified by the Chairman and his staff[/font]. The calculations presented here represent CBOs assessment of how the specified paths would alter the trajectories of federal debt, revenues, spending, and economic output relative to the trajectories under two scenarios that CBO has analyzed previously. [font color="red" size="3"]Those calculations do not represent a cost estimate for legislation or an analysis of the effects of any given policies. In particular, CBO has not considered whether the specified paths are consistent with the policy proposals or budget figures released today by Chairman Ryan as part of his proposed budget resolution.[/font]
The amounts of revenues and spending to be used in these calculations for 2012 through 2022 [font color="red"]were provided by Chairman Ryan and his staff.[/font] The amounts for 2023 through 2050 were calculated by CBO on the basis of growth rates, percentages of gross domestic product (GDP),[font color="red"] or other formulas specified by Chairman Ryan and his staff[/font]. For all years, the Chairman specified that there would be no spending for subsidies to purchase health insurance through new exchanges established under the Affordable Care Act. CBO calculates that, under the specified paths, federal revenues and spending would evolve as follows:
Mysfyt
(50 posts)i wasnt sure where to start in that report.
it seems to me that all these 'budgets' are unreasonable and are just being offered as lip service to the public to advance their own agendas...or those of their handlers.
thanks again for the info