Republicans have a problem. The party of fiscal discipline and a balanced budget really, really wants to pass a tax cut for the rich that will blow up the deficit. Unfortunately, Senate PAYGO rules don’t allow this,1 and Democrats can filibuster any attempt to change those rules.
But there’s a metaphysical issue embedded here: how can you know—really know—that a bill will increase the deficit? That’s like seeing into the future! What godlike intelligence could possibly do that? It’s impossible!
Nonetheless, in our fallen state this task has been given to the Congressional Budget Office. And they have an annoying tendency to produce results that Republicans don’t like. So Trump’s budget chief, Mick Mulvaney, is making the case that we should get rid of the CBO entirely:
“I would do my own studies here at OMB…And other folks would do their studies from the outside. And those would come with their natural biases. The Heritage Foundation comes in and says it’s going to cost a lot. Brookings comes in or the Center for American Progress says the benefits would be great.“
….Asked what would happen in a scenario in which, say, a Democratic administration says a bill costs $500 billion and Heritage Foundation puts out a report saying the same bill would cost trillions, Mulvaney responded, “Then they would do it and if it works, they would get re-elected and if it doesn’t, they don’t. And that was the way it worked before the Congressional Budget Office.”
In other words, there would be no rules at all. You’d just do whatever you wanted, and if you get reelected it must mean you were right. This is a fascinating ontological approach to budget estimation.
But what’s more fascinating is Mulvaney’s pretense that what he’s really upset about is the CBO’s score of the Republican health care bill:
Mulvaney was particularly critical of the CBO’s recent estimate that the House-passed healthcare bill would result in 23 million fewer people with health insurance. He argued that the CBO’s model assumed that the mandate requiring individuals obtain coverage has a lot more influence on people’s decisions than it does in real life.
“Did you see the methodology on that 23 million people getting kicked off their health insurance?” he said. “You recognize of course that they assume that people voluntarily get off of Medicaid? That’s just not defensible. It’s almost as if they went into it and said, ‘Okay, we need this score to look bad. How do we do it?'”
But CBO’s most recent estimate says the health care bill will reduce the deficit by about $100 billion. Mulvaney has no beef with this, nor any reason to be upset about the estimate of 23 million people losing insurance, since that’s the very thing that reduces costs enough to make the bill compliant with PAYGO rules. So why is Mulvaney kvetching about this?
In fact, Mulvaney doesn’t care a fig about AHCA. He’s just preparing the ground for an assault on the CBO when it comes time to score his cherished tax bill. A few years back Republicans finally badgered the CBO into accounting for the “dynamic” effects of tax cuts, but they’ve never been satisfied with CBO’s refusal to use the most fanciful dynamic models, which assume that tax cuts pay for themselves entirely. And CBO is obstinate about this even with a Republican in charge! What to do?
Answer: Get rid of the CBO. But Democrats would filibuster any attempt to do that. So what is Mulvaney up to? Just this: it turns out that the Senate Budget Committee isn’t actually required to use CBO estimates. They always have in the past, but that’s a custom, not a rule. They have the authority to make their own estimates, and all it takes to make them stick is a majority vote in the committee.2
Mulvaney is basically trying to start up a campaign to put some spine into the SBC’s Republican members to ignore the CBO and simply score the tax bill using a model that will pronounce it deficit-neutral. That’s what this is all about.
1The House has no PAYGO rules for tax cuts.
2There are also Byrd Rule problems with the tax cut bill, but Republicans already think they might have a way around those.